EXCLUSIVE: Access to innovative medicines in the UK could be stifled under the government's current proposals for value based pricing, warns strategic consulting firm A.T. Kearney.
A more pragmatic approach to assessing the value of drugs is crucial if patient access to innovative and life-saving medicines is to be protected, the group argues in its response to the government's consultation on the pricing proposals.
Under plans for VBP - which is to replace the current Pharmaceutical Price Regulation Scheme when it expires in 2014 - branded medicines will be assigned different 'weightings' according to their benefits, which implies the introduction of a price thresholds for certain products.
According to the government, a system under which the NHS pays for medicines based on their benefits will help equalise access throughout the country and remove the postcode lottery of care, as well as incentivise research, drive innovation and give the NHS better value for money.
However, while VBP is supposedly geared up to increasing patient access to innovation, the structure envisaged by the government may actually have the opposite affect, warns Michael Thomas, principal at A.T. Kearney.
For one, pricing transparency under the scheme could really be an issue for pharmaceutical companies. Many countries – representing around 25% of global demand – use the UK as a reference for their own prices, and so any agreement lowering the list price of a drug over here could affect sales elsewhere in the world.
Delayed launches?
Consequently, products may be launched much later in the UK market or even not at all, which goes against the government's stated objective of boosting access to new medicines.
Also, pharma companies may be discouraged from investing in particular areas if prices are deemed insufficient as a result of VBP, even through new drugs might be of huge benefit to society in these areas, it argues.
According to the firm, the QALY principle should form part of the basis of "a structured and evidence-based discussion on willingness to pay, rather than a rigid formula-driven approach", and there must be least some scope for negotiation so that pharmas "are free to make deals without compromising their global pricing positions, in the event that a VBP approach is unable to achieve agreement", it says.
"At the moment, the mechanisms required to support patient access to affordable medicines have been completely omitted from the government's proposals on VBP," said to Jonathan Plimley, a Manager at AT Kearney.
A value-based price does not automatically mean better access and uptake, he notes, and warns that, "without clear clinical guidance, surety of funding and a commitment to quality prescribing, there will be a return to a postcode lottery for many patients".
Other responses
Elsewhere, patient group Myeloma UK has welcomed the government's move towards VBP, but also voices several concerns with the current proposals.
Chief executive Eric Low said it is crucial that the Department of Health "gets the details of value-based pricing right so as not to miss the many opportunities it offers", but stressed that the current consultation "overlooks several critical details and makes a number of assumptions about what the NHS should be paying for without a proper evidence base".
In addition, the group says there must be strong incentives for the local uptake of new medicines in the NHS in the absence of mandatory NICE guidance, as "without such incentives for local payers, value-based pricing will not improve the availability of new drugs".
Crucially, the new pricing mechanisms must be harmonious with medicines assessment processes in the devolved regions, a factor which has not been addressed in the consultation, it argues.
The NHS Confederation has warned that the proposals for VBP "could increase the NHS drugs bill without improving the effectiveness of treatments patients receive", as new medicines "could still represent poor value for money when compared to other treatments such as early detection, surgery and radiotherapy which can be more effective investments".
The plans are also "unlikely to incentivise innovation in the production of new treatments for patients, as the government intends", it says, arguing that the money the NHS shells out on medicines is not “of a sufficient scale to affect the behaviour of a sector populated by multinational organisations with annual turnovers of tens of billions of dollars”.
In addition, it suggests that the National Institute for Health and Clinical Excellence be given responsibility to develop a ‘value-based’ pricing methodology, based on robust clinical and economic evidence.
The government's consultation on VBP closes today.
Want to know more? PharmaTimes is holding special meeting on VBP on 19th April at the Dorchester Hotel. Speakers include Professor Karl Claxton, York University, Michael Thomas, Principal at A.T. Kearney, and Paul Catchpole, Value & Access Director at the ABPI. For more information please email Jill Payne at jill@pharmatimes.com.
