Earlier this year, drugmakers were stunned by a report from the Office of Fair Trading which claimed that the National Health Service is paying way over the odds for branded pharmaceuticals, and called for a radical reform of Pharmaceutical Price Regulation Scheme “to deliver better value for money from NHS drug spend and to focus business investment on drugs that have the greatest benefits for patients.”
Specifically, the OFT recommends that the current 'profit cap and price cut' scheme - where companies are free to set their own prices “within very broad profit constraints” - be replaced with “a patient-focused value-based pricing scheme, in which the prices the NHS pays for medicines reflects the therapeutic benefits they bring to patients”.
This would enable the NHS to obtain greater value for money from its existing drug spend, explained the OFT, which estimates that it would release £500 million that could be used more effectively, “giving patients better access to medicines and other treatments which they may currently be denied.”
But Staunton claims it doesn’t make any sense to review the PPRS, which is costly in itself, because the $500 million worth of savings could be achieved by mechanisms already in place, namely better care better value indicators.
Spreading best practice
BCBV indicators, launched by the NHS Institute for Innovation and Improvement in October 2006, “aim to spread best practice across the NHS in England” by identifying potential areas for improvement in Service efficiency. There are 15 such indicators in place, but currently just one relates to prescriptions, increasing low-cost statin prescribing. Others include reducing staff sickness and increasing day case surgery rates.
Once an indicator has been determined, all primary care trusts are put in order of performance with regard to the particular issue, and the level the top 25% are achieving is the target benchmark. All PCTs are then put in a league table and the potential savings if those under the benchmark hit the target is calculated.
Currently, there are a further 37 proposed indicators, which, together, could garner savings of £2.2 billion, Staunton claimed. These include potential generic savings, increasing the use of low-cost proton pump inhibitors, and the use of aspirin as a percentage of antiplatelet therapy, which Staunton believes will all come into play in January. Glitazones for diabetes, antidepressants and combi-inhalers for asthma could also be included by the end of next year, he predicted.
The government’s is currently considering the OFT’s proposals for the PPRS, but Staunton insists this seems a “no brainer”, because savings of at least £500 million, as targeted in the OFT report, could be achieved via the BCBV indicators. It would be very expensive to change the PPRS, he said, adding that the Department of Health has said no to the OFT before and NICE is already over-worked.
However, in an interim response to the proposals, the government said it agreed with the OFT that better mechanisms are needed in order to deliver medicines at fair prices and value to the NHS, patients and taxpayers, and it also accepts that further improvements are needed in the uptake of cost-effective drugs.