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Not in favour

Although the ECJ has ruled that incentive schemes are not illegal, EMIG remains concerned about their potential impact on patient health

A figure holding a red 'X' symbolThe European Court of Justice (ECJ) ruled last month that financial incentive schemes implemented by national public health authorities in order to reduce public health spending are not illegal, leading many in the industry to question the decision on the basis of patient safety.

The case was taken to the ECJ after the Association of the British Pharmaceutical Industry (ABPI) and the Medicines and Healthcare products Regulatory Agency (MHRA) failed to agree on whether prescribing incentive schemes operated by Primary Care Trusts (PCTs) in the NHS — which see physicians rewarded for switching patients to cheaper generic medicines and/or for introducing new patients to cheaper drugs in the same therapeutic class — are unlawful under European law.

Industry response
The ECJ's ruling has caused much debate. Many in the industry believe the practice is contradictory to commitments to act in the interests of patient care, independent of financial considerations. Ironically, the industry has been pilloried for years for encouraging doctors to use particular medicines, yet it now seems acceptable for the NHS to pay doctors to use the cheapest ones. If the NHS genuinely wants the patient to receive the most appropriate medicine, then surely that should be the doctor's choice, made without untoward influence.

EMIG members have told me that 'the conflicts of interest are obvious' when considering prescribing incentive schemes. One member company stated: "We are not opposed to prescribing guidelines, but we are opposed to prescribing incentives. The prescription being made for incentives means that the decision is made on issues other than clinical reasons. This is not putting the patient at the centre of the care."

Moreover, this ruling comes at a time when the Department of Health (DH) is considering proposals to implement automatic generic substitution in England — something that EMIG has opposed from the outset on the grounds of patient safety. Now, with the ECJ's ruling, we question even further how relevant these proposals are. Further regulation would create additional red tape and bureaucracy at a national level and would be detrimental and burdensome for the pharmaceutical industry as a whole.

EMIG has always said that the introduction of automatic generic substitution would have a negative impact on patients, prescribers, pharmacists and industry in the UK. Since its proposed introduction by the ABPI as part of the 2009 Pharmaceutical Price Regulation Scheme (PPRS) settlement, EMIG has opposed the introduction of automatic generic substitution because our members believe it will expose patients, who are currently prescribed branded products for specific reasons or conditions, to unnecessary additional risks for little or no clinical benefit. We are also concerned that it will not realise savings to the NHS as forecast by the department, as most branded prescribing (17 per cent of the total) is intentional on the part of the clinician.

Additionally, and of most concern to our members, we are worried that the policy will diminish incremental innovation — that is, product alterations that improve a product's acceptability to patients and therefore boost compliance. Generic substitution will increase the NHS medicines bill by eliminating any incentive for continued development of older, lower-priced medicines.

Evidence presented to us by our members shows that many innovations currently underway would not have been undertaken if this policy was in place and many planned innovations are currently on hold pending the outcome of the Department's consultation. Should the policy be implemented in full, we believe it has the potential to increase inappropriately fast uptake of newer, more expensive and less well proven New Chemical Entities (NCEs), which would enter the market without any existing branded competition — something that would hit small and medium sized companies hardest.

EMIG's recommendations
In this context, EMIG will be proposing either transparency on all prescribing incentive scheme proposals and full engagement with the industry on their introduction, or an end to any plans for the introduction of automatic generic substitution. There is no need for both.

Additionally, NICE is now looking at the possibility of appraising Roche's Avastin to treat wet age-related macular degeneration (AMD), despite the drug not being licensed for this indication. This stems from the fact that the drug has a very similar mode of action to Lucentis (indicated for wet age-related macular degeneration), but is significantly cheaper, making it a particularly attractive proposition for a cash-strapped NHS.

How does this incentivise or reward pharmaceutical innovation? The industry is engaging with the NHS to assist with increasing efficiency and cost reduction, yet the Government is chipping away at its very foundations.

Cost-benefit and value for money are essential at a time of economic hardship, but it may cost patients and the tax-payers more in the long term if we confuse cost with value.

Leslie Galloway
The Author

Leslie Galloway is chairman of the Ethical Medicines Industry Group (EMIG)

To comment on this article, email

25th June 2010


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