Over 20 life sciences leaders from companies supplying the NHS with essential medicines have united to warn against the ‘radical plans’ to change the statutory scheme for branded medicines.
The pharmaceutical industry believes that the changes to the medicines scheme are ‘unworkable’ and could be highly damaging to UK life sciences and NHS patient access to medicines if implemented.
One of several pricing mechanisms that control the NHS’s spending on branded medicines, the statutory scheme requires companies to pay back a percentage of their NHS-branded medicines sales to the Department of Health and Social Care (DHSC) above an arbitrary growth cap.
Additionally, an agreement between the UK government and a minority of companies, the voluntary scheme (VPAS), is due to end in December 2023.
Without a new VPAS deal agreed upon, all sales of branded medicines will fall subject to the statutory scheme.
One of the main concerns for life sciences companies is the government’s continuation of an arbitrary growth cap on the UK branded medicines market.
The cap has led to revenue setbacks in the UK, with an increase from 5% to 27% in three years.
According to a report by the National Economic Research Associates (NERA) Economic Consulting, the government gave no justification for implementing the level of the cap.
Similarly, the WPI Strategy reported that the continued increase would negatively affect the UK’s economic growth.
The DHSC has also proposed a new Life Cycle Adjustment (LCA) to maintain the total revenue raised through sales clawbacks by reducing rates paid by newer medicines and imposing higher rates of up to 40% on medicines older than 12 years.
The industry believes that the LCA will cause instability in the UK market and will place a considerable regulatory burden on companies.
The industry has specifically called for exemptions from the negative impacts of pricing and supply of medicines in the UK for newer medicines, blood and plasma-derived products, vaccines and centrally procured medicines.
Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry (ABPI), has urged the government “to slow down and take another look at these proposals”.
He added: “We need a pragmatic solution where industry and government can properly share the risks and rewards of innovation.”