Biotech threatened by UK drug pricing changes, says BIA

Plans by the UK to adopt a new pricing scheme for branded medicines threaten to undermine the viability of the country’s biotech sector, according to the BioIndustry Association (BIA).

The switch from the current Pharmaceutical Price Regulation Scheme (PPRS) to a system of value-based pricing (VBP) is due to take place next year, and in June the Department of Health (DH) started a consultation on the controversial proposals.

The BIA – in its first public statement on the plans – says the transfer to VBP would “damage the UK biotech ecosystem” by undermining the attractiveness of the sector for investors.

The DH confirmed in June that the UK’s National Institute for Health and Care Excellence (NICE) would operate at the heart of VBP, making its usual judgments on the cost-effectiveness of new products but expanding this out to include assessments of other factors, including broader societal benefits, although the specifics of this remain vague.

The proposals envisage a price adjustment on sales of branded drugs to the NHS of between 10 and 20 per cent, along with the introduction of an exemption for smaller companies that have UK NHS sales of branded medicines below £5m a year.

Industry is concerned that the vagueness of the evaluation criteria could make it easy for the government to mandate sweeping pricing reductions for new and innovative products that will be hard to challenge.

“If the life sciences sector is to be an engine of growth for the UK economy then it is vital that companies are rewarded for their innovation in their home market,” said the BIA’s chief executive Steve Bates.

“It is harder to sell innovative UK medicines around the globe if they are not purchased by the NHS,” he added.

The BIA adds its voice to concerns already raised by the Association of the British Pharmaceutical Industry (ABPI), which has criticised the plans in the past and is currently in negotiations with the DH over how VBP will work in practice.

In its response to the proposals, the BIA stresses that a poor reimbursement framework “undermines basic and translational R&D”, adding that proposals are at odds with the “positive actions and interventions taken forward under [the UK’s] Strategy for UK Life Sciences”.

For example, the UK government has been applauded of late for introducing a number of stimulus initiatives such as the Biomedical Catalyst Funds to help small companies commercialise their R&D and £600m to improve the infrastructure for scientific research announced during last year’s autumn budget.

“The proposals risk the UK ceasing to be an attractive global launch market for new treatments,” says the BIA, pointing out that the branded medicines industry has contributed £3bn to savings in the NHS since 2009, and that the proportion of the NHS budget spent on medicines continues to fall.

“It is these new, innovative drugs that have made a significant difference in outcomes in cancer and heart disease and continue to deliver sustainable efficiencies’ for the NHS,” says Bates.

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