UK set for new flexible drug pricing, says Johnson
pharmafile | November 14, 2008 | News story | Sales and Marketing |Â Â NHS, parÂ
The government is working with the pharma industry on new 'flexible pricing' arrangements, even though revisions to the existing PPRS pricing scheme have yet to be finalised.
Health secretary Alan Johnson says he wants a new emphasis on 'value-based pricing' and increased "risk-sharing" from the industry on new medicines.
These two elements would seem inherently linked to the government's current negotiations, but Johnson denied they have delayed the ongoing PPRS discussions, which he still expects to be finalised in early 2009.
The health secretary outlined his flexible pricing plans at the same time as lifting the ban on NHS top-up payments, saying both were part of a bigger plan to make more medicines available to patients on the NHS.
He said: "I can confirm today that I am working with the pharmaceutical industry on new flexible pricing arrangements that will increase patients access to new drugs."
Johnson repeated calls for more 'risk-sharing' agreements between the industry and government, whereby a company would refund the cost of a drug to the NHS if a patient fails to respond to it.
Detail on the new plans was scarce and Johnson promised they would be fleshed out later, adding: "These arrangements will include enabling drug companies to supply drugs to the NHS at lower prices, with the option of higher prices if the value is proven at a later date."
Pricing tensions
The current PPRS talks have sparked tension between industry and ministers from the outset, when the government chose to terminate the previous pricing contract nearly three years early.
They have also been more complicated than in previous years. This is partly down to a major element of the new scheme that guarantees the NHS immediate cost savings when drugs go off patent.
The 'value-based pricing' alluded to by Johnson was first proposed by the Office of Fair Trading in 2007 as a replacement model for the PPRS. The proposal did not receive a warm welcome from the industry at the time and it is likely to provide further ground for contention.
Nevertheless industry association the ABPI said both it and the government are keen to finalise a deal. Its director-general Dr Richard Barker told Pharmafocus: "I can assure you, both sides now want these negotiations to be finished as quickly as possible."
But the government has already prolonged the process by calling for extra consultation on the issue of off-patent branded drugs, and this part of the new agreement will miss the January deadline.
The ABPI said it has been ready to complete the entire agreement, but a spokesperson denied tensions between government and the industry were running high.
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