PPRS: thumbs-down from pharma
pharmafile | November 7, 2013 | News story | Sales and Marketing | ABPI, NHS, PPRS, Pfizer, VBP
A missed opportunity for patients, which creates financial problems for smaller companies while stifling life science investment – these are just a few of the reactions from pharma to yesterday’s five-year UK government drug pricing agreement.
The existing PPRS pricing scheme is to remain in essence intact, but there is a limit now on how much the NHS drugs bill can grow until the next agreement is set in 2018.
The much-vaunted Value-Based Pricing (VBP), set to be in place by 1 January, appears to have been quietly shelved, and NICE will decide how to implement certain value-based assessments into its appraisal of a new drug’s cost-effectiveness – although this is still largely up in the air.
For the next two years pharma is expected to underwrite any increase on the currrent NHS drugs bill, with growth then capped at 1.8%, 1.8% and 1.9% for the remaining three years.
This has not impressed Pfizer, which says the NHS’s medicines budget is already under control.
“The government’s overriding focus on managing costs and its failure to see medicines as a longer term investment is a short term and damaging approach for all those concerned, but most notably for UK patients,” the company said in a statement.
It believes ‘too many’ new medicines are being rejected by NICE and argues that pharma has provided the NHS with £7 billion over the last decade via price cuts and patent expiries.
“Government must take action to fix the UK system and ensure that innovative new medicines get to the patients who need them,” said Jonathan Emms, UK managing director of Pfizer.
“NICE must be given a new mandate, one that makes it a beacon for innovation, helping to deliver the government’s ambitions and benefiting patients, the NHS and the UK economy,” he added.
While the ABPI agreed the new PPRS deal with the Department of Health, chief executive Stephen Whitehead acknowledged that problems are likely to arise for smaller drug companies.
Those with an NHS turnover of between £5 million and £25 million per year will be the hardest hit as the government refused to fund exemptions for manufacturers with these levels of revenue, although they will do for those earning under £5 million per year.
“We are disappointed,” Whitehead said. “Companies in this category will find this extremely tough, and we need the government to work to ensure the UK is attractive to smaller companies.”
The major problem is that the new arrangements will put off investors, insists BioIndustry Association (BIA) chief executive Steve Bates.
“The BIA has repeatedly warned that the government’s pricing proposals for pharmaceuticals put at risk future investment in the UK R&D base, as the perception of the UK as a market for innovative products has an important bearing on the global investment decisions of multinational biopharmaceutical companies,” he said.
“So it is extremely disappointing to see that the Department of Health believes there is no reason to expect that changes in UK prices would significantly affect the UK’s attractiveness as a location for R&D,” Bates added.
The government is also demonstrating a lack of joined-up thinking, the BIA suggests.
The price cap on the branded medicines bill represents a big change from previous PPRS deals and will have a negative impact on industry investment here “which is contrary to the government’s stated industrial and life science strategies”, Bates concluded.
Adam Hill
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