Paul Catchpole outlines how the new medicines pricing and access scheme will improve patient outcomes, maintain affordability, and support innovation.
Following a year-long negotiation, the new pricing scheme for medicines was agreed on 5 December 2018 between the Department of Health and Social Care (DHSC) and the Association of the British Pharmaceutical Industry (ABPI).The new scheme will last for 5 years, from 2019 to 2023.
Although it is the successor to the Pharmaceutical Price Regulation Scheme (PPRS), it has a new name: the Voluntary Scheme for Branded Medicines Pricing and Access 2019 (VPAS).1 While PPRS was a convenient acronym, which served us well for 60 years, the new name is more informative and confirms that the scheme is:
- voluntary not statutory
- covers branded medicines, not generics
- covers medicines access policy, as well as pricing.
For the first time, NHS England was a party to the negotiations and is therefore tied into the agreement alongside the ABPI and DHSC. An agreed set of commitments will be worked on together, which is very positive as far as industry is concerned.
For the first time, NHS England was a party to the negotiations and is therefore tied into the agreement
The new scheme has three main objectives (see Figure 1):
- to improve patient outcomes by improving access for the most clinically and cost-effective medicines
- to maintain affordability of UK medicines spend, and provide predictability for all parties
- to support innovation in the pharmaceutical industry, and deliver a net benefit to the UK economy.
Figure 1: Overarching objectives for the new scheme were agreed by Government and industry
Planning and horizon scanning
All parties agreed that more planning was needed to support the introduction of new technologies and medicines, so the new agreement contains a package of measures around enhanced horizon scanning. This was first initiated two PPRS schemes ago, with the introduction of UK PharmaScan—the single national repository for all new medicines and significant indications. This now needs to be more complete and up-to-date, and to provide more comprehensive forward planning information—a commitment that industry will need to make. On the other side, NHS England needs to use the information better and more comprehensively to support planning for the introduction of new medicines where more complex patient pathway changes or service redesign are required.
NICE will remain central to streamlining horizon scanning in terms of managing the process.
There is a real opportunity for more of the steps that are currently done in sequence, to be done together in parallel. For example, the introduction of chimeric antigen receptor T-cell (CAR-T) therapy demonstrated how this new enhanced horizon scanning process could work. For CAR-T, pharmaceutical companies and NHS England started planning early, so that when the treatments were licensed, they could be made available quickly.
NICE process changes
In terms of streamlining routes to market and value assessment processes, it has been agreed that all new medicines and significant indications will now have the option for an appropriate NICE appraisal. This is very important: unless there’s a clear rationale for not doing so, all new medicines will now go through the NICE process. This will help take the pressure off some of the other evaluation methods in the system, such as the emerging Regional Medicines Optimisation Committee (RMOC) process, and the NHS England Clinical Priorities Advisory Group (CPAG) specialised commissioning process.
… all new medicines and significant indications will now have the option for an appropriate NICE appraisal
It has also been agreed that appraisal timelines for oncology and non‑oncology medicines will now be fully aligned. This is an important point of equity and means it should be possible to shave up to 6 months off non-oncology evaluations.
The cost-effectiveness threshold used by NICE will be maintained for the duration of the scheme. It has been agreed that the value assessment process, in terms of how new medicines are assessed, will be looked at by NICE in 2019/2020. There will be a methods review both for the technology appraisal process, and following on from that, for the highly specialised technology appraisal process.
New commercial framework
There will be significant changes around the processes of commercial discussions between companies and NHS England and the new scheme contains a commitment to develop a new framework, called the Commercial Framework. This will be a document that NHS England owns, and that ABPI, industry, and other stakeholders will contribute to. This Commercial Framework will be used to set out how the new processes will work, and how the whole commercial environment will be brought together in a coherent way. This means that existing commercial flexibilities offered by NHS England will evolve, leading to more efficient working, and innovative commercial access arrangements to support medicines through the NICE process. These may also address further specific challenges around uptake and affordability.
Current arrangements around patient access schemes will be carried forward. In addition, more enhanced confidential commercial arrangements will be agreed with NHS England in specified circumstances. There is a need to simplify some of the language and context, and the Commercial Framework will help with this.
There is a commitment to share commercial agreements that are put in place with England across the devolved nations. The aim of this is to try and expedite early discussions with stakeholders in the devolved nations, so that appropriate and commensurate commercial arrangements can be put in place in those devolved nations too, to speed up patient access.
All parties aspire to see greater uptake of the most clinically- and cost-effective medicines that provide significant health gain (see Box 1). A range of measures have been agreed to support this, by improving the measurement of medicines uptake, strengthening uptake targets, and sharing better information about uptake (see Box 2).
All parties aspire to see greater uptake of the most clinically- and cost-effective medicines that provide significant health gain
It has also been agreed that there will be a focus on trying to drive uptake for some groups of medicines to levels considered to be among the best in the world. These will be identified from the top five health gain categories. Health gain will need to be clearly defined as this can mean different things to different people and how the top five highest health gain categories are decided will be an important matter of debate, particularly in the context of NHS England’s commissioning role in specialised services, where it’s not necessarily about treating the maximum numbers of patients, but smaller cohorts of patients.
Box 1: Commitments to improve uptake for the most clinically- and cost-effective medicines
- An upper quartile target for the five highest health gain categories during the first half of the scheme
- Continued development of the Innovation Scorecard and other uptake measurement tools to provide a more comprehensive approach to tracking uptake
- NHS England will proactively provide tailored implementation support to ensure uptake of the medicines that offer the strongest value propositions
- Continued discussions on the development of the data infrastructure to enable improved information collection and generation of real world evidence, including on an indication-specific basis where appropriate
- Earlier commercial engagement for the most transformative and best value products to ensure faster commercial agreement for companies willing to work with the NHS and price responsibly.
Box 2: Summary of market access commitments in the new voluntary scheme
- Development of enhanced horizon scanning processes
- Improved early engagement and better planning for the most transformative and high value medicines
- NHS England account management approach
- All new medicines and significant indications will have an appropriate NICE appraisal, unless there is a clear rationale for not doing so
- Alignment of oncology and non-oncology appraisal timings
- Mandatory funding for all NICE approved medicines (reduced need for reliance on NHS England specialised commissioning process, RMOC evaluations and local assessments)
- Maintenance of the baseline cost-effectiveness threshold
- Value assessment methods to be considered through NICE TA and HST methods reviews in 2019/20
- Development of a clear process for integrated commercial discussions with NHS England and NICE
- Additional commercial flexibilities available for higher value products
- Commitment to sharing confidential prices across devolved nations; option to align devolved nations’ commercial arrangements where comparable
- Greater transparency on expected tenders
- Commitments to improve uptake including bespoke uptake support for the products with the strongest value propositions.
RMOC=Regional Medicines Optimisation Committee; TA=technology appraisal; HST=highly specialised technologies
Affordability and industry payments
In terms of the financial and operating aspects of the scheme, it has been agreed to continue with another capped medicines bill arrangement. For the last 5 years, all expenditure on the medicines bill over agreed levels has been paid back by the industry to Government. Over the course of the 2014 scheme, industry paid back £2.8 billion, which was more than £1 million a day coming back into the system.2 A similar arrangement has been agreed for the next 5 years, with growth levels now capped at 2% per year. The method for calculating the payments and the measured spend has also been significantly strengthened to make the arrangements more robust.
Overall, the scheme remains pro‑innovative, and supportive for small companies. Companies with annual sales of scheme products of less than £5m will be exempt from payments. In addition, there will be a taper, where companies with sales of scheme products up to £25 million, will also benefit from not paying on the first £5 million of these sales.
In 2019, the first year of the scheme, industry will be paying back £930 million into the system.2
Freedom to set list prices for new active substances and subsequent line extensions will be maintained. In addition, New Active Substances (NAS) will be exempt from payment for 36 months on a rolling basis from their date of licence, backdated to January 2018, to encourage launch soon after licensing.
Transitioning to the new system
Work has now started on implementation of all of the key commitments agreed in the scheme.
For the moment, existing processes for access to medicines will remain in place (including Patient Access Schemes, Cancer Drugs Fund, Budget Impact Test [BIT], Commercial Access Agreements, Managed Access Agreements, etc.) while the commitments agreed in the new scheme are worked up into operational arrangements:
- NICE increases capacity (by around April 2020) to facilitate all new medicines and significant indications having an appropriate appraisal
- NHS England works with NICE and ABPI to develop and publish the new Commercial Framework
- NICE BIT Review, NICE TA and HST Methods Reviews to progress during 2019 and 2020.
As of the beginning of 2019, more than 170 pharmaceutical companies have signed up to the new voluntary scheme, which together account for more than 85% of all NHS expenditure on branded medicines.2 ABPI is very much looking forward to continuing to work with NHS England, NICE, DHSC and patient organisations on supporting the implementation of all of the agreed commitments in the new scheme for the benefit of NHS patients and on behalf of the pharmaceutical industry in the UK.
- DHSC, ABPI. The 2019 voluntary scheme for branded medicines pricing and access – chapters and glossary. December 2018. Available at: assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/761834/voluntary-scheme-for-branded-medicines-pricing-and-access-chapters-and-glossary.pdf
- ABPI data on file.