VBP will be ‘unfair’: report
pharmafile | May 8, 2013 | News story | Medical Communications, Research and Development, Sales and Marketing | 2020health, ABPI, NHS, VBP
A new report on value-based pricing (VBP) concludes that the new system will be unfair to patients and says the government should allow pharma to fix its own prices for drugs.
Think tank 2020health’s paper ‘Value-based pricing: the wrong medicine for the nation?’ – which was not sponsored by pharma – will be music to the ears of the ABPI.
VBP is due to become the means by which new drugs are priced and assessed for NHS use from January 2014, replacing the voluntary Pharmaceutical Price Regulation Scheme (PPRS), which limits pharma’s profits.
The government says VBP will take into account the value of a drug for patients and to society, and encourage a focus on developing drugs addressing areas of significant unmet need.
The new system is likely to offer lower rewards to drugs which only offer limited additional benefits to existing treatments.
The ABPI, which is in negotiations with the government over how VBP will look, has long argued that the new system will stifle innovation because it will not reward the industry sufficiently in order to allow the R&D of new medicines.
2020health’s report, which has been written in an attempt to crystallise the concerns patients might have if and when VBP is introduced, goes further, saying that the loss of patient access schemes – currently negotiated between NICE and individual companies – will reduce patients’ access to medicines rather than increase it.
It also warns that the public could see the pricing of medicines made into a political issue because of perceived government interference, and that people are well aware that ‘value’ is a subjective term rather than one which can be given a finite number.
It adds: “Patients would have valid concerns about fairness” and points out that “patients know that value alone cannot determine drug prices because commercial competition imposes a ceiling”.
People would also soon realise that VBP “cannot easily be applied to the most important medical breakthroughs” and that there are difficulties in pricing drugs which are used to treat various conditions.
The report’s main author, Barbara Arzymanow, says: “The public have been told that politicians are staying out of the NHS, so this change could seem like hypocritical interference.”
She went on: “Patients could mistake value-based pricing for a commitment to make more medicines available, which is not the case. One product can have many uses and dosage regimes which are of different ‘value’ to different people. Pricing of medicines can be improved, but not through this entirely new scheme.”
Instead, 2020health recommends that the government should:
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Continue to allow pharma companies to fix their own prices for individual drugs: new controls would operate at the higher level of the entire cost of each company’s drugs to the NHS – something which PPRS achieves by a profit cap but which could be done by ceilings on revenue or trading margin, for example.
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Get firms to enable NHS access to their products except in extreme cases by adjusting prices appropriately – for instance, by lowering the price of older drugs by enough to accommodate high enough prices for new products.
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Provide a fair financial return to all companies – taking into account the broader need to control government spending, the benefit to the UK economy from high-tech investment and the desirability of R&D – to ensure that medicine continues to advance.
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Incentivise pharma to look at rarer diseases by offering a bonus for drugs treating less common conditions.
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Encourage more patient access schemes to help make drugs available to patients on the NHS at a cost that the drug industry would otherwise find unacceptably low.
Adam Hill
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