The reform is much more than a simple endorsement of value-based pricing (VBP). What the government intends is to abandon one of the most venerable structures for P&R in Europe, the Pharmaceutical Price Regulation Scheme (PPRS), which was introduced more than a half century ago and, as negotiated at five-year intervals, stands as a symbol of close policy coordination between politicians, the health bureaucracy, and industry. In its place looks to be a far more hierarchical arrangement in which industry will basically function as price takers in a process administered exclusively through the Department of Health.
One reason why the changes have attracted less attention than they deserve is the larger debate over reform of the NHS, which is being reorganized under a bill now making its way through Parliament. Ironically, the NHS reforms promise more autonomy to local physicians in funding patient care and introduce more private sector competition in service delivery—just as the demise of the PPRS removes what is left of pricing freedom in medicines, in favor of outright controls. And although the NHS reform is expected to cut $8 billion in costs to the $160 billion system by 2015, none of the savings are pledged to improving access to medicines.Speak softly, industry
ABPI Director Stephen Whitehead's support for VBP—"it provides significant opportunity to both improve patient outcomes and stimulate the development of new and innovative medicines of the future"—did feature prominently in the government's press releases. But the language is highly nuanced and accompanied by a number of important caveats; like many other aspects of the debate on access and pricing in Europe, the way the industry speaks in public can be open to interpretation.
It is also true that there is little consensus on exactly what the government intends to do, and—more importantly—how and to what effect the new regime will be implemented. The discussion itself has been exhaustive to the point where all parties think they have heard back at least some of what they have said. VBP has been on the reform docket since 2007 and the Conservative coalition government formally presented it as a replacement to the PPRS in 2010.