UK government pushes ahead with value based pricing of drugs

The government intends to go ahead with its plan to set prices of drugs in the United Kingdom by the value they deliver, in spite of a lukewarm response to the proposal.

The consultation on value based pricing, published on Monday 18 July, shows that many of the 188 respondents remain unconvinced. In answer to the key question, “Will the approach achieve the proposed objectives of better patient outcomes, greater innovation, a broader and more transparent assessment, and better value for money for the NHS?” only 15% of respondents said yes, while 19% said no and 66% did not answer.

The Department of Health for England, which negotiates prices for drugs throughout the UK, has nevertheless concluded that “a clear majority” was in favour of the proposals. This is based on the 61% of respondents who agreed that the objectives listed (better patient outcomes, greater innovation, and so on) are the right ones. But it would be hard to argue with such broad objectives. When it came to detail, such as whether the proposed system could actually deliver them, there were clearly many unanswered questions.

In its response the government confirms that the National Institute for Health and Clinical Excellence will be the body responsible for establishing value and will have “a central role” in the system. But the government has acknowledged that one proposal—that a drug with several different indications could be priced differently in each—is unworkable.

Respondents also expressed considerable scepticism over the idea of awarding a drug a higher price if its manufacturer could demonstrate “innovation,” and the government’s response admits that this will need to be approached “very carefully.” And although a majority of respondents who expressed a view believed that the system should apply to existing drugs as well as new ones, the government says no. Given that it will be a new system, and taking into account likely capacity constraints, the focus should be on new active substances in the first instance, it insists.

The health secretary, Andrew Lansley, said, “It is vital that doctors are able to prescribe medicines that they think will benefit their patients. They must be able to focus on what matters most, achieving the best health outcomes for their patient, not debating the price of a drug. Value based pricing will ensure this happens.”

The Association of the British Pharmaceutical Industry expressed doubt. It said that further detailed examination was needed to ensure that a new system benefited patients and the UK economy. The existing system, the pharmaceutical price regulation scheme (PPRS), includes provision to stimulate the growth of the drug industry, but it was unclear whether this would be included in value based pricing.

“We have still to see a clear vision of the system that will succeed the current PPRS, which has traditionally met patient needs and supported an important research and development based UK industry,” the association said in a statement. Its chief executive officer, Stephen Whitehead, said, “There is much work to be done and many questions to be answered.”