Value-based pricing no ‘magic bullet’ – ABPI
pharmafile | November 16, 2010 | News story | Sales and Marketing | ABPI, Dr Richard Barker, NHS drug sales, PPRS, UK medicines pricing, value-based pricing
UK pharma association the ABPI has warned that the government’s planned value-based pricing system for medicines will not necessarily save the NHS money.
Speaking at the Wellards health conference, ABPI director general Richard Barker said: “There is this unrealistic belief in the government’s mind that the result is that prices will fall, but I don’t think we know, actually.
“Value based pricing is thoroughly logical, but not a magic bullet,” Barker added.
Barker was responding to the official news that NICE’s HTA role will be downgraded and is set to be replaced by value-based pricing (VBP) in 2014.
VBP will also replace the current PPRS pricing system, set to expire in 2013, which caps the profit pharma can make from NHS sales at 29.4 per cent.
VBP will be used to assess an individual drug’s cost-effectiveness after it has been put on the market, a system known as ex post. This will allow pharma to charge any price they would like for their drugs, removing the current restrictions.
According to the Health Service Journal, a drug would be reviewed once it had been in on the market for a predetermined period, when its therapeutic benefit would be compared with competitors and its cost-effectiveness calculated.
Health minister Lord Howe told Pharmfocus last month that its cost-effectiveness criteria would encompass a new definition of ‘value’, to be agreed upon by pharma, patients and clinicians, to which VBP will adhere.
Depending on the outcome, either the NHS or the pharma industry would then be reimbursed for the difference.
The Department of Health told the HSJ that details of how VBP would work in the UK are “still being drawn up”, with a consultation document on the plans due out in December.
Ben Adams
Related Content
The November 2020 issue of Pharmafocus is available to read free online now!
The latest monthly edition of Pharmafocus is available to read for free online now!
UK life sciences industry does not want no-deal Brexit, says ABPI Chief
Prime Minister Boris Johnson’s sudden change of position that the UK is now expecting a …
ABPI Chief Executive Mike Thompson to retire by the end of 2019
The Association of the British Pharmaceutical Industry (ABPI) has announced that its Chief Executive Mike …
