Is That VBP on the Horizon, or a Mirage?

May 01, 2013

Julian Upton
The news in late March this year that NICE will be responsible for the "full value assessment" of medicines under the United Kingdom's proposed new value-based pricing (VBP) system came after growing concerns that the government has remained worryingly unclear—and is betraying a lack of confidence—about how VBP will ­actually work.

VBP is set to launch when the United Kingdom's existing Pharmaceutical Price Regulation Scheme (PPRS) expires in January 2014. The PPRS, established over 55 years ago, is a voluntary agreement between the UK government and the pharma industry that controls the profits made by pharma companies from selling branded drugs to the National Health Service (NHS), but allows them to set their own prices within the constraints of the profit cap. It aims to serve both industry and NHS procurement policy, while allowing patients access to the best medicines. The flaws of the system have come into sharper focus in recent years; as well as suffering under the weight of—in the words of Mike Birtwistle of MHP Health Mandate—the "inherent conflict between the role of purchaser and champion," (August 24, 2011) there is the fact that the PPRS does not focus its price cuts on drugs that are deemed to deliver less "value." The new system aims to address this by setting prices that reflect the value of the drugs to society.

But, despite VBP in the United Kingdom being talked about as far back as 2007 (and formally presented in 2010 by the current coalition government as a replacement for the PPRS), by the beginning of this year critics were still accusing the government of failing to make any progress on it.

In January, MPs on a House of Commons Health Select Committee declared that it was "unacceptable that the arrangements for VBP have still not been settled and that those who will have to work with those arrangements are still unclear about what [it] will mean in practice." The committees called for a decision on VBP to be taken "no later than the end of March." This call was honored—but only just.

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