UK's new pricing scheme means greater commercial flexibly for innovative drugs, says DHSC official

by Thomas Meek
LONDON, 26 Apr (APM) - The UK will "bend over backwards" to provide access to drugs that offer the greatest value to patients and the National Health Service (NHS), according to one of the architects of the country's new pricing scheme.
The voluntary scheme for branded medicines pricing and access, which launched at the start of the year, offers far greater commercial flexibility than its predecessor, the pharmaceutical pricing regulation scheme (PPRS), said Robert Ketell, deputy director, medicines pricing at the Department of Health and Social Care (DHSC) on Thursday.
This is important as many companies told the DHSC they were "frustrated" with the "rigid rules" of the PPRS, which was in place from 2014 to the end of 2018, Ketell told the audience at an event hosted by Westminster Health Forum in London.
The PPRS did allow companies to use a confidential patient access scheme to provide a discount to the list price of a product to help support a recommendation from health technology assessment (HTA) bodies NICE and the Scottish Medicines Consortium (SMC), but this was not enough for industry, said Ketell.
"That scheme did not necessarily provide flexibility to deal with some of the uncertainty with challenges that companies have when bringing a new product to market," he said.
This includes the possibility of coming up with new commercial solutions to address uncertainties on the long-term effect of a treatment, uncertainties around patient populations or uncertainties around the required dose of a drug.
"There is a commitment in the scheme that NHS England is supportive for greater commercial flexibility to allow these uncertainties to be addressed in dialogue with NHS England," he said.
"And there is a huge amount of additional capability and capacity within NHS England compared to say two or three years ago in order to have those conversations with companies and allow these products to have a commercial solution significantly earlier than they otherwise would have."
He added that there is a "clear steer" in the scheme that this greater flexibility will be offered to companies that offer the best value proposition for the NHS.
"In a sense, what that means, is the NHS is willing to bend over backwards for things that offer the greatest health benefit per pound, the greater amount of health outcomes, the greatest bang for buck."
Explaining how this could work in practice, he said he had heard from companies that said they found it difficult to make complex commercial arrangements in a confidential way as any new model, such as dose capping, would be published publicly in a NICE recommendation.
To support companies which want to work on new commercial models, Ketell said the DHSC and NHS will set up a small project team that works with them on how best to address uncertainties in data.
He added that the new scheme does not mean there will be a "watering down" of the government's commitment to ensure that products that have a supportive NICE recommendation are subject to funding and made available on the NHS if they fall within the accepted threshold of £20,000-£30,000 per QALY.
"The difference here is that we know that with the last scheme, we heard feedback from companies saying that simply being able to get to £20,000, £30,000 per QALY for list price or with a simple discount was not sufficient. They needed more commercial flexibility on a confidential basis to enable us to address some of the uncertainties in products."


The new scheme also includes more incentives to drive the adoption and uptake of new products once a commercial agreement has been made, said Ketell.
These mainly relate to the payments that companies have to make to the DHSC to be on the scheme. Scheme members make payments to the DHSC of a percentage of their net sales of certain health service medicines.
That percentage is derived from the difference between allowed growth and forecast growth in sales to the NHS of branded medicines during the five years of the voluntary scheme, which is due to be renewed for 2024. The percentage payment for the first year is 9.6%.
However, new active substances are exempt from this percentage payment for 36 months on a rolling basis from date of license, backdated to January 2018, to encourage launch soon after licensing, said David Watson, director of pricing at the Association of the British Pharmaceutical Industry (ABPI), who was speaking at the same conference.
There is also an enhanced 'taper'. This means that for companies with sales between £5 million and £25 million, the first £5 million of sales is excluded from the percentage payment for those companies.
Other financial aspects of the voluntary scheme, with around 90% of companies with products in the UK are signed up to, include an allowed growth rate for pharma spending of 2% each year. Any growth more than this will be covered by industry.
The scheme retains freedom to set list pricing on new active substances and subsequent line extensions, said Watson.



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