VBP: a fait accompli or room for manoeuvre?
pharmafile | April 18, 2011 | Feature | Sales and Marketing | value-based pricing
The pharma industry is seeking a compromise on the UK’s proposed value- based pricing, which promises to revolutionise the country’s medicines pricing.
Proposed by health secretary Andrew Lansley, value-based pricing (VBP) would create a direct link between a drug’s price and its value to patients, and is set to be introduced in 2014.
Industry association the ABPI now enters preliminary negotiations with the Department of Health following a consultation in which many stakeholder groups shared their thoughts on the plans.
For its part, the industry is worried the VBP system will allow the government to force lower prices on its medicines, and yet fail to deliver on the promise of better access to effective treatments.
The ABPI has now put forward a compromise plan which would see VBP introduced only on new drugs, with existing treatments still subject to the current PPRS system.
VBP: an opportunity for greater access?
In contrast to the ABPI, the charity Rarer Cancers Forum, wholeheartedly support the plan and believe it will make oncology treatments more widely available.
It says allowing older drugs to be assessed under VBP is a unique opportunity, that could see drugs not recommended by NICE made routinely available on the NHS.
Chief executive of the Rarer Cancers Forum Andrew Wilson was guarded about discussing individual drugs, but added that there was a case for testing VBP on medicines licenced before 2014.
Wilson said this was because there will be more evidence available on a drug’s long-term benefits, meaning it was more likely to hit VBP’s criteria on valuing drugs.
Overall Wilson welcomed the new system, saying the concept of value-based pricing ‘was sound’ and believed it was a progressive policy by the government. He added that the current PPRS pricing system in conjunction with NICE “has not worked for cancer patients”, and is one of the main reasons why he is giving his backing to VBP.
The NHS Confederation, which represents health service managers, reached a very different conclusion. It has issued a highly critical appraisal of the plans, and says they could in fact raise spending on drugs and distort NHS priorities.
The diversity of opinion about the highly complex proposals suggest the plans could yet undergo serious revision – much like the parallel discussions around the even more controversial ‘Liberating the NHS’ reforms.
Healthminister Lord Howe will play a key role in thrashing out an agreement, and spoke to Pharmafocus as the VBP consultation drew to a close.
Asked about recent remarks made by Lilly chief executive John Lechleiter, who said he was afraid the VBP plans were a ‘fait accompli’, Lord Howe said there was still much to discuss.
“I think that is a complete misreading of the situation, because we haven’t even begun the discussion yet,” he said.
“We have got the best part of three years to figure out how a VBP system would work – I see the next few months as an opportunity to have a real dialogue with the pharmaceutical industry, the medical profession and patients, and all interested parties, in broad terms, as to how VBP would work.
‘‘What are the ingredients for defining value, how should they be measured, who should do it. All these things we need to talk through.”
Lord Howe conceded that VBP was an ambition of the government, but reassured that talks would play a crucial role.
“It is very much down to discussion and in the end negotiation with the pharmaceutical industry as to how this will look.”
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