NHS :: Bioscience responds to Oft report on NHS Pharmaceutical Price Regulation Scheme

The Office of Fair Trading (OFT) market study has today recommended a fundamental reform of the drug pricing system in the UK, which would see the current profit and price controls replaced with a value-based approach to pricing.

The BioIndustry Association (BIA) has long championed the need to support innovation and the interests of smaller, emerging bioscience companies which have not been adequately supported by the current pricing system. The OFT report has recognised that the scheme could be improved to take account of the requirements of smaller companies, such as through increasing R&D allowances.

Aisling Burnand, Chief Executive of the BIA, said:

“The BIA fully supports the principle of focusing investment on drugs that have the greatest benefits for patients, and reallocating funds to more cost-effective products.”

“The OFT has recognised that the current system disadvantages growth of smaller emerging bioscience companies. Its recommendations are clearly attempting to redress this and reward innovation, and broadly speaking we are supportive of this.”

“Clearly, the fact that there may be more incentives for innovative companies and reallocation of funds to more innovative medicines is positive, but the manner of implementation and the methodology used for calculating cost effectiveness and value will be critical.”

“Of the proposed approaches to pricing, we fully support the incremental changes to existing instruments, and believe that the ex post approach deserves further consideration, although detail will be key. We would need much more detail on ex ante value-based pricing before coming to a consensus view. One of our concerns in either case is whether this would place a significant extra burden on smaller companies for additional clinical trial data generation. Additionally, the impact of ex ante on speed of launch would need further examination.”

“The impact of such radical change to an established system must be properly assessed and not rushed into, as the consequences for UK patients and the UKeconomy could be far-reaching. The OFT’s theoretical vision now needs to be developed to understand how it would work in practice. Any new system would also need to be adequately resourced to avoid adding unnecessary delays to the release of products for patients.”

“If there is to be a wholesale change to the drug pricing system it needs to be fundamentally much more transparent. The calculations used by NICE and others to evaluate cost effectiveness must be open to scrutiny, and appeals must happen in a timely manner.”

“We must remember that still far too many medicines have been demonstrated cost effective by NICE, but are not widely used by the NHS. In order to make sure that these medicines reach patients, there needs to be a holistic approach as to how we move forward. If not, we risk making the system worse not better.”

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