International drugmakers are currently putting decisions about whether to invest in the UK on hold, while they await the outcome of ongoing government/industry discussions on a renegotiated Pharmaceutical Price Regulation Scheme, industry leaders have warned.

This uncertainty has created a “black cloud” which is hanging over the UK in terms of investment prospects, Nigel Brooksby, managing director of Sanofi-Aventis UK, told delegates attending The Economist’s annual pharmaceutical conference in London yesterday. He added that the industry had been “genuinely shocked and surprised” and saw “no logic” in the Department of Health’s announcement early last August that it would be re-negotiating the current PPRS, even though the current five-year agreement had only been in place for two-and-a-half years and included a 7% across-the-board price cut.

The Department’s announcement was made the same day that the government called for drug pricing arrangements between companies and the National Health Service to be updated, in its interim response to the Office of Fair Trading’s conclusion that the PPRS, in its present form, was “no longer fit for purpose”.

The government wants to have the PPRS renegotiations completed by the summer, said Richard Barker, director-general of the Association of the British Pharmaceutical Industry. He declined to give any details about the progress of the negotiations, but warned that they represent a potential “fork in the road” in terms of the industry’s relationship with government. For pharmaceuticals more than almost any other industry, the quality of this relationship “is a critical determinant of the outcome, for patients, for the country’s economic prosperity”, he said, but the industry was now facing “an unprecedented challenge in the form of an unscheduled renegotiation of a deal we thought would last to the end of 2009”.

Innovation is the key to prosperity, said Brooksby, and he urged government and regulators to “take a more responsible stance” in encouraging advances by developing a regulatory framework which takes account of scientific developments. “We must establish a value for innovation”, he said.

Economic assessment
Dr Barker also called for new ways of building into clinical trials the evaluations needed by economic assessors such as the National Institute for Health and Clinical Excellence. Patients are being denied new medicines, either because public and political pressures on the regulators knock out promising new treatments, or because “once hundreds of millions are spent on gaining a licence, an unbalanced Quality of Life Years (QALY)-driven health technology assessment process torpedoes the new therapy before it leaves the harbour”, he said, adding: “there must be a better way”.

The Office of Health Economics’ new Commission on NHS Outcomes, Performance and Productivity is due to report next month on how the NHS can implement the measurement of patient outcomes on a disease-by-disease basis in order to improve its performance, instead of its current “incorrect” method of measuring productivity by dividing activities by costs, said Dr Barker, and he hoped this initiative will set a new direction in helping to understand how much health gain the NHS achieves for patients.