ABPI outlines vision for drug pricing reform
pharmafile | August 3, 2012 | News story | Sales and Marketing | ABPI, NICE, PPRS, VBP, Whitehead, value-based pricing
The ABPI has set out what it wants to see from the new drug pricing system in the UK.
Negotiations on Value-Based Pricing (VBP) will begin in September, and the ABPI has released a joint statement with the Department of Health on what it would like to see from the reforms.
There has already been some agreement on certain issues, including allowing the new system to be renegotiated after five years and allowing VBP to be based alongside the voluntary PPRS system, which has been in place since 1957.
The government’s current plan will see VBP come into place on 1 January 2014, and will replace the 55-year old PPRS pricing system, which allows pharma to set its own prices and then have its treatments assessed by NICE.
This looks set to change in 18 months’ time, with the new VBP system seeing the government setting prices for new treatments based on how it values a drug.
Value in this context includes whether a drug can ease the burden of illness, has a societal benefit and/or is a step change in innovation.
As part of this proposal, NICE’s role in issuing guidance to the NHS will be downgraded.
In a statement the ABPI said that it had already reached an agreement with the government that any new system would operate for five years from 2014, and would then be renegotiated as it currently is with the PPRS scheme.
It said that the government also wants to have VBP work alongside a renewed PPRS scheme.
The ABPI were clear on the thorny issue of the government setting prices at launch – they don’t want it.
In its proposal, it said VBP should allow pharma companies to be free to propose a price for a new medicine at launch – this would remove a major element in the government’s reforms if accepted, making any changes largely impotent.
The ABPI said it also expects the VBP plans to be part of a UK-wide scheme, and potentially be incorporated in the health policies of Wales, Scotland and Northern Ireland, and not just England.
It recognises, however, that these devolved administrations have their own policies regarding drug pricing, so it said it would be important to ensure close working with these countries to enable a ‘co-ordinated and coherent approach’.
It also said that NICE’s role should remain in tact, and ensure that its HTA recommendations are rapidly and consistently implemented across England.
Cancer Drugs Fund
VBP is planned to be rolled out in a progressive way from 2014, and will only apply to new medicines coming into the UK market from 1 January.
But the ABPI said that there could be some scope to allow a small number of existing medicines to be assessed under VBP, and suggests that some of those currently being funded under the Cancer Drugs Fund could be included.
The CDF injects an extra £200 million for oncology medicines that have not been assessed by NICE, or have been rejected for funding by the NHS.
The two most commonly funded drugs have consistently been Roche’s Avastin and Merck Serono’s Erbitux – these could be the biggest winners if the government accepts the ABPI’s proposals.
Just yesterday the ABPI’s chief executive Stephen Whitehead said that VBP ‘could stifle innovation’ and was concerned that it would not adequately reward pharma for its R&D investments.
The ABPI would like the PPRS to broadly remain, whilst updating what value means, predominately to allow more drugs to enter into the UK.
Ben Adams
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