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Leela Barham is a freelance health economist and policy expert. She has published in peer-reviewed journals and presented at national and international conferences. She has provided advice to the Department of Health and Social Care on policy on pricing of branded medicines to inform the negotiation of a successor to the UK’s Pharmaceutical Price Regulation Scheme (PPRS), the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS), as well as worked with patient groups, the NHS, pharmaceutical companies and many others internationally on the economics of healthcare and pharmaceuticals. Contact Leela on firstname.lastname@example.org
Tensions are becoming clear within industry as it faces what might yet be the toughest negotiations on pricing with the UK government. Leela Barham reports.
Tensions are becoming clear within industry as it faces what might yet be the toughest negotiations on pricing with the UK government.
The Association of the British Pharmaceutical Industry (ABPI) has taken a bold step in legally challenging the National Institute for Health and Care Excellence (NICE) on the introduction of a budget impact test and changes to the decision-making on highly specialized technologies (HSTs).
The ABPI has said that the proposals to introduce negotiation when cost-effective drugs cost more than £20 million ($26m) in any of the first three financial years post launch have the “potential to cause significant delays for patients.” The ABPI is also challenging plans for a cost-effectiveness threshold for highly specialized technologies (HSTs) (ultra-orphans).
It has become evident that not of those represented by the ABPI necessarily agree with the stance the Board as a collective has taken. The Telegraph has suggested that one of the main differences between those in favour and those against legal action is their homeland. A headline on the ABPI JR on the 15 July 2017 said “Foreign drug giants behind challenge to NHS rationing.” They report that British board members – GSK and AstraZeneca – see legal action as unconstructive and aggressive.
It’s also not clear that those representing industry though different industry associations agree either including the BioIndustry Association (BIA) and the Ethical Medicines Industry Group (EMIG).
The ABPI represents more than 80 per cent of all branded medicines used by the NHS, yet that is a fall from the over 90 per cent at the time that the 2014 PPRS was finalized.
The pharmaceutical industry is diverse and it would seem inevitable that there will be differences in opinion on practically every issue that the industry faces. There in lies the value of industry associations which will try - although may have varying levels of success - in identifying what might be attractive to nearly all their member companies and using that as the basis for lobbying.
The trouble is however that the differences within industry can be used against them. For example, a bug-bear for many in industry is just where the £1.87 billion ($2.44bn) companies have paid back to the Department of Health to date have gone. Although they have gone into the NHS, once there it seems impossible to know what has happened after that. The exception is Scotland, where there is a new medicines fund that uses PPRS money. The concern amongst many in industry is that despite providing the NHS assurance on overall spend – at least for drugs under the PPRS - and paying well over a billion, there is still not the hoped for boost in uptake. Add to that the concern that changes like additional negotiation might slow access.
The ABPI and Government did try to tackle the issue of how to use PPRS money to more clearly support uptake of innovative medicines. Yet it proved to be too hard despite exploration of approaches such as capped budget at CCG level. The Secretary of State, Jeremy Hunt, pointed out in Jult 2016 that industry did not have a unified position about what they wanted. The bottom line was that he was unable to make the case within Government. He couldn’t convince others about finding a mechanism at local level in the NHS that would allow all commissioners to take advantage of the effective cap in the 2014 PPRS.
The ABPI is the other side to Government when it comes to negotiating the PPRS. They represent companies that supply more than 80 per cent of all branded medicines. That gives them a strong mandate, but equally it also places a moral responsibility on them to look beyond their membership since how the UK regulates pricing – and given the way that the PPRS has evolved – access, it matters industry wide.
Getting a consensus across industry may prove an elusive task, but one that may be worth it to present a unified front as big ticket issues including a successor to the PPRS and how to get the best of Brexit are on the table. The ABPI has described the negotiations for the 2014 scheme as “the most complex pricing negotiations ever experienced”, but so far it looks like negotiating a successor could be even harder given differences in opinion within industry.