UK pharma faces rising costs from value-based pricing
pharmafile | December 3, 2010 | News story | Sales and Marketing | Eli Lilly, VBP, lilly, value-based pricing
The government’s planned introduction of a value-based pricing system in the UK could increase costs and bureaucracy for the industry, according to one pharma company.
Lilly met with the Department of Health in July to voice its concern over the reforms, which it also said could delay the introduction of new drugs in the UK, according to minutes of the meeting obtained by The Daily Telegraph.
Lilly UK’s director of corporate affairs Rick Ascroft, who attended the meeting, confirmed to the newspaper that ministers were told their reforms could have the opposite affect to that intended.
He said: “Just by having a price negotiation it could lead to delays in access versus the current approach.
“While the goal of the system is to improve access, at least up front it may actually do the opposite.”
The government plans to replace the current PPRS pricing scheme with a value-based pricing (VBP) scheme – under which drug prices will be set according to the value medicines provide – in 2014.
The radical reform was contained in its White Paper Equity and Excellence: Liberating the NHS, which also outlined structural shifts in the way NHS budgets are handled, with control of 80% of funds passing to GP consortia.
The reforms aim to improve patient access to effective drugs and provide the NHS with value for money on its medicines spending, but there is uncertainty on their impact on the pharma industry.
Health economist Alan Maynard says he expects the industry will have to undertake an expensive reorientation of its marketing efforts.
“I imagine they are pulling their hair out over the idea of marketing to GP consortia,” he told Bloomberg.
Meanwhile, speaking at the Wellards health conference in November, ABPI director general Richard Barker said: “Value-based pricing is thoroughly logical, but not a magic bullet,” and warned that this system would not necessarily bring drug prices down.
Ben Adams
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