Perhaps it was too good to be true. A value-based approach to pricing branded medicines that would increase access and improve outcomes, but also control costs….and stimulate innovation by keeping companies happy. Such was the proposal released by the UK Department of Health in late 2010.
Briefly, the idea was to introduce a range of maximum price thresholds reflecting the different values medicines offer. These thresholds would be determined by various factors, including an evaluation of unmet need, the availability of alternatives, the degree of therapeutic innovation, as well as calculations tied to broader societal benefits and savings.
Seems sensible, doesn’t it?
Except it now looks as if VBP may not happen at all. The UK coalition government is struggling hard to get its wider package of structural health reforms approved by Parliament – reforms that would, among other things, increase doctors’ power to commission and buy drugs, and allow more private care provision. Now VBP isn’t part of that Health Care Reform Bill. But it’s linked, politically, if not legally.
The UK industry association, the ABPI, has an official line: “The Government has said it will be part of the negotiation on the new pricing scheme that starts sometime this year.”
But it doesn’t specify which pricing scheme. The current five-year Pharmaceutical Pricing Regulation Scheme (the existing system, designed to allow free-ish pricing but with caps on drug company profits) runs out at the end of 2013. Thus, something will have to be negotiated this year. In the current environment that’s more likely to be PPRS 2013 not VBP.
Going against VBP is the fact that, for all industry’s show of shoulder-rubbing with government, it’s tough to agree upon the details of what will doubtless prove a complex system. There will be thresholds, criteria, variables and calculations to settle on — and that’s in addition to decisions tied to how–and to what degree–bodies such as cost-effectiveness watchdog NICE (the National Institute of Health and Clinical Excellence) should play a role. Sorting this out will take time –and yet there has been little sign of progress so far.
Thus, we suspect the unofficial ABPI line — “we don’t care if VBP is dumped” – may prove the more accurate one. If this press release from a few days ago supporting the “ongoing, voluntary” PPRS set-up is anything to go by, industry has decided it prefers to stick with the devil it knows. After all, it seems by now almost certain that NICE, the most significant brake on higher drug prices in the UK, is here to stay whatever happens.
thanks to flickrer John H Wright for the image