UK pharma industry hits out at plans to rework statutory payment scheme

More than 20 companies working alongside the UK’s National Health Service (NHS) have condemned plans to rework the country’s statutory safety scheme for branded medicines, calling it “unworkable”.

A proposed review of the 2023 scheme to control the cost of branded health service medicines from the UK’s Department of Health and Social Care (DHSC), has drawn criticism from many pharmaceutical companies that are part of the industry body Association of the British Pharmaceutical Industry (ABPI).

Critics of the review have said that altering the laws on branded medicines could reduce patient access to medicines, harm UK clinical research, and undermine investment in UK life sciences.

The majority of the criticism focuses on a proposed continuation of a cap on growth in the UK branded medicines market, a cap mechanism that members of ABPI condemn. At present, both the Statutory Scheme and the Voluntary Scheme (VPAS) require only some companies to pay back a percentage of their NHS-branded medicines sales each year to the DHSC. The government is currently in ongoing negotiations to reach a Voluntary Scheme agreement before the end of 2023. In the absence of a new deal after the current one expires, ABPI says all branded medicine sales may be subject to VPAS.

Another controversy lies around a new mechanism called the Life Cycle Adjustment (LCA), which aims to maintain the total revenue raised through sales clawbacks, but reduce rates paid by newer medicines.  This would be done by imposing clawback rates of up to 40% on medicines older than 12 years. The higher rates would be paid on products judged by DHSC to be in “uncompetitive markets” using competition as a form of measurement.

Richard Torbett, chief executive of ABPI, said : “We urge the government to slow down and take another look at these proposals before they press ahead and do real and lasting damage to the UK’s reputation as a global leader for life sciences.

“What all businesses crave is predictability. This allows companies to manage risks and invest with confidence. Yet these unpredictable capped pricing schemes have done the opposite, running hard against the government’s ambition to make the UK a global life science leader and a key driver of UK economic growth.”

In the same announcement, Laura Steele, president and general manager at Lilly UK & Northern Europe, said: “The life sciences industry of patient care, medicines research and medical discovery cannot be the jewel in the UK’s economic crown without urgent government action.”