What Does the UK's "New" Government Mean for the Industry?

The dust is starting to settle after what turned out to be, contrary to the expectations of many, a majority win by the Conservative Party in the UK’s 2015 General Election. The Conservatives have managed to shake off the need to compromise to get into government this time around as last time they had to work in coalition government with the Liberal Democrats. Not that that will be avoided in this term either, as potential backbench rebellion within the party, coupled with a slim majority, could require Prime Minister David Cameron to work with others in parliament to get big-ticket legislation through. But just what does a Conservative government mean for industry?

Europe

On Europe, the Conservatives had a nuanced message in their campaign for re-election; not an outright rejection of being in Europe, but rather a stance that saw them promising a referendum on staying or going, but only after David Cameron has a chance to push for reform. So the question is whether Cameron will be able to get a better deal for the UK, and whether that is enough to stop the public voting to leave the European Union (EU) in a 2017 referendum.

Knowing whether being in or out would be good or bad for industry is a tough call. For industry, Europe is still very fragmented even with the EU. A single market in many other areas, but as health is a national competency, companies have to navigate a myriad number of requirements from several agencies when setting price and getting reimbursed. With some big European countries, like Italy and Spain, running decentralised health care systems, even getting a product to patients there, means getting to grips with more than one payer.

Plus, some of the European rules that you might have hoped would have helped both patients and industry to get timely access to medicines don’t always seem to work; the European Transparency Directive is an example. This sets out a target timeline for concluding price and reimbursement processes, yet these timelines aren’t always met.

There are on-going efforts though to improve things with respect to health technology assessment (HTA) in Europe. This is primarily through EUnetHTA-a collaboration between member states agencies and the European Commission. The UK getting out of Europe probably won’t mean losing out on the benefits of a (limited) degree of consensus around HTA. If you’re sceptical, the fruits of these efforts won’t be borne out for industry anytime soon anyway.  What it might mean is the National Institute for Health and Care Excellence (NICE) no longer being in EUnetHTA. Whether that’s a good or bad thing is down to your view of NICE. Worth noting that NICE wasn’t part of the original EUnetHTA project in any case, but over time there is more than a passing similarity to the NICE approach in some of the EUnetHTA’s outputs, particularly the guideline on health economic evaluation. Even if NICE was no longer part of EUnetHTA, their stamp would still be left. The UK leaving Europe might also mean losing a UK seat at the table under the HTA Network, a network of Ministries across Europe, set up under the European Directive for cross border health care.

Plus, not being part of Europe would mean UK based scientists and clinicians might lose out on EU funding that can indirectly contribute to the success of the commercial industry.

Scotland

Closer to home, the Conservatives will face an interesting time trying to govern the "United" Kingdom when 56 out of 59 seats for Scottish MP’s are now held by the Scottish National Party (SNP). The Scottish voters have, by virtue of the first past the post system operated in the UK, turned Scotland yellow. This result is despite a ‘no’ vote when the Scottish public were asked if they wanted to be independent in September 2014.

For industry, Scotland has always been very different. A closer knit community, a separate HTA agency-the Scottish Medicines Consortium (SMC)-and a desire to develop a Scottish model of value when England was talking about Value Based Pricing (VBP). All this, even before the surge in influence of the SNP that the election results have brought about.

What this change in political make-up might mean for industry is further pressure, already felt through the Scottish Committee for Sport and Health inquiry into VBP, for Scotland to have it’s voice heard in agreeing the next Pharmaceutical Price Regulation Scheme (PPRS). Health and social affairs were already marked down for further discussion between the UK and Scottish Governments in any case, as one of the recommendations from the 2014 Smith Commission on further devolution of powers to the Scottish government. The PPRS agreement-between the Department of Health (DH), on behalf of all the UK’s governments, with the Association of the British Pharmaceutical Industry (ABPI), on behalf of industry-has traditionally been a bi-lateral agreement covering indirect price regulation and increasingly issues on access to medicines. A multi-lateral negotiation would undoubtedly change the dynamic.

Industry

For industry much should stay the same, particular with the Secretary of State for Health, Jeremy Hunt, staying in post. That might be good news for some; it means all the effort going in behind the scenes for reviews such as the Accelerated Access Review (AAR) and the Review on Antimicrobial Resistance won’t be cast aside just because they weren’t set up under someone else’s reign. Both of these are not yet complete; AAR could well report before the end of the year including changes for to speed up access to medicines, but the final AMR report will be published sometime next year.

A Conservative government should also further cement the government commitment to the five-year PPRS, due to end in 2018. Afterall, since it’s bringing in millions, it’s an attractive deal. The tricky thing is whether it’s still such a good deal for those companies who are members.  Add to that the potential of more players at the negotiating table and the next couple of years could shape up to a tough negotiation ahead for industry, even if the Prime Minister and the Secretary of State have stayed the same.

Leela Barham is an independent health economist. You can access her website here and contact her at leels@btinternet.com