Drug pricing was put under more scrutiny than ever last year after US company Turing Pharmaceuticals bought the 62-year old drug daraprim and raised the price from $13.50 to $750 in the country, resulting in international backlash. It was also the second year of the new PPRS scheme, where pharma companies underwrite all medicines expenditure by the NHS over agreed levels.
Urgent action needed on PPRS
In 2015, the implications of the PPRS started to hit home. In principle, it should remove barriers to the uptake of innovative new medicines and give patients the care and treatment they need. Yet, as it currently stands, the PPRS is failing to deliver new, innovative, cost-effective medicines to patients.
The core principle – that industry payments should directly drive medicines’ uptake and access across all disease areas equally – is not being met. This is wholly wrong and unacceptable. In contrast, the overspend in specialist care, coupled with a mindset of cost containment and a general lack of understanding about the PPRS in primary care, has led to unwarranted prescribing variations.
There must be a way to find the right balance; urgent action is needed to develop a workable solution that directly links PPRS payments and the uptake of new innovative medicines locally. The DH needs to take the lead here for patients. Additionally, CCGs need to recognise the significant contribution made by the industry and encourage greater use of innovative new medicines in all care settings.
Professor Klaus Dugi, medical director and managing director, Boehringer Ingelheim UK and Ireland
£4 billion but no benefit?
Is the pricing of pharmaceuticals a science, a dark art or the practice of ‘whatever the market will bear’? A poll amongst the public and payors would support the latter, and with some justification.
Pricing is an issue that will continue to grow, fuelled by the transparency agenda. It will grow, in part because of the behaviour of the few but also because we have a customer (the NHS) that is strapped for cash. We then become a convenient distraction for governments to blame for providing highly priced medicines that offer marginal benefit.
We will pay around £4 billion to the Department of Health by the end of this PPRS but the NHS tells us it feels no benefit. There is clearly a fault in the way the scheme is negotiated.
We will never be able to understand every company’s pricing strategy, except in blatant cases such as Turing, so it makes sense to address the three current big issues – the cost of medicines to payers, their affordability to the NHS, and how addressing these together can open the door to innovation.
Leslie Galloway, chairman, Ethical Medicines Industry Group
Pressure on pricing continues
This year we’ve seen people question the business model for pharma; put another way, how do you square a limited drugs budget with the continual scientific improvements and rising cost of drugs?
The impact of the pricing debate has been very real, changing sentiments towards drug development companies and reducing the appetite for funding, with a negative effect on market values. Yet, the fact remains that the cost of drug development has never been higher; it is frequently said that bringing a new drug to market costs $1 billion, but this is seriously out-dated – it’s over $2 billion today, factoring in the cost of the drugs that don’t make it. However, those who pay for drugs are newly emboldened and are going to push back harder on pricing than ever before.
Neil Murray, chief executive, Redx Pharma
