Tuesday, April 16, 2024

Agreement Reached for UK’s Voluntary Scheme for Branded Medicines Pricing and Access

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After months of negotiations, a significant milestone has been achieved in the development of a successor to the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS), a system designed to control the growth of spending on medicines in the UK. Termed a “landmark” agreement by the Association of the British Pharmaceutical Industry (ABPI), this new deal is projected to save the NHS £14 billion ($17.5 billion) over five years by managing medicine costs and enhancing access to novel treatments.

Key Features of the New VPAG Scheme

Similar to its predecessor, the Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG) sets an annual cap on the total permitted sales value of branded medicines to the NHS, with any sales exceeding the cap subject to a levy payable to the government. Scheduled to run from the end of 2023 until December 31, 2028, the new scheme’s highlights include doubling the annual growth rate for sales of branded medicines, increasing from 2% in 2024 to 4% by 2027, with a novel mechanism to encourage lower industry payment rates for more innovative branded medicines. Unlike the previous scheme, the new one lacks a fixed rebate rate, which peaked at 26.5% last year. Additionally, it treats older and newer medicines differently, assigning different rates for their sales to the NHS.

Older medicines will incur an additional top-up rate of up to 25% on top of the base rate of 10%, although this can decrease for products with significant price reductions. The ABPI predicts that payment rates for younger medicines will start declining, from 19.5% in the last quarter of 2024 to 7.2% in 2028, roughly aligning with pre-COVID-19 levels. The surge in demand for medicines during the pandemic contributed to the recent rise in VPAS rebates. The cost savings anticipated under the new scheme are approximately double those achieved by VPAS, which returned around £7 billion over its five-year duration. Medicines account for the second-highest share of NHS spending, valued at £19.2 billion in England in 2022/23.

Medicines Pricing and Access

The agreement also includes an additional £400 million investment from the life sciences industry, aimed at accelerating clinical trials, manufacturing, and health technology assessment agencies, fostering economic growth, collaboration, and innovation in the UK’s life sciences sector. Previously, the ABPI had warned that without action to reduce rebate rates on branded medicine sales, the UK risked losing £1.9 billion in R&D spending in 2028, with a cumulative loss of £5.7 billion between 2024 and 2028.

Enhanced Commitments in the Voluntary Scheme for Branded Medicines Pricing and Access

The deal further commits to piloting advanced therapy medicinal products (ATMPs), such as personalized cancer therapies and one-shot gene therapies, to ensure swift patient access. It also promotes a data-driven approach to NHS medicine usage and the creation of a support program to encourage the use of post-treatment patient-support technologies.

Robert Kettell, NHS England’s director of medicines negotiation and managed access, remarked, “This five-year agreement will enable NHS England to build on our track record of securing innovative, life-changing treatments for millions of patients across the country at a fair price for taxpayers.” He emphasized the importance of rapid access to cutting-edge medicines and incentivizing medical research.

ABPI chief executive Richard Torbett described the deal as a “challenging agreement” that recognizes the role of innovative medicines and vaccines while offering vital support to patients and the NHS. He added that allowing the sector to grow faster than under the previous scheme should enhance the UK’s international competitiveness over time.


Resource: Pharmaphorum, November 20, 2023

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