NHS Will 'Bend Over Backwards' To Fund Top Value Innovation In UK
Executive Summary
Companies with innovative drugs that have a “great value proposition” should fare well when it comes to national health service funding, according to an official from the UK health department.
The National Health Service is willing to “bend over backwards” to provide funding for the best new innovative drugs, provided companies come with “a really great value proposition,” according to a senior UK health official.
Robert Kettle, deputy director of medicines pricing at the Department of Health and Social Care, also said that the NHS was prepared to engage earlier with companies on the most “transformative” new products coming through the pipeline.
Speaking at a recent meeting on the new voluntary pricing and access scheme that was negotiated with the pharmaceutical industry and took effect in January, Kettle said the negotiations on the scheme had focused firmly on medicines access and uptake, rather than just pricing issues.
The parties recognized the need to find a balance between the three main priorities of the scheme, Kettle said: to meet the needs of the NHS in terms of predictability of drug spending and to bear the costs of innovative new drugs; to ensure the scheme supports innovation and the life sciences industry; and, “most importantly,” to make sure patients’ needs are met in terms of making the best value innovations available more quickly and ensuring the best outcomes for patients.
The DHSC executive was speaking at an event organized in London by the Westminster Health Forum to discuss the rationale and operation of the new voluntary scheme, which replaces the former Pharmaceutical Price Regulation Scheme (PPRS). Among other things, the NHS is for the first time “hardwired” into the scheme to allow it to plan more effectively for the introduction of new therapies.
Kettle said the scheme could be broken down into two main parts: a suite of commercial and uptake measures to get the most transformative medicines to patients more quickly; and an affordability mechanism, including a system for industry payments on sales of branded drugs to the NHS.
Commercial And Uptake Measures
With an eye on the responsibilities of the industry in terms of making sure the aims of the scheme are met, Kettle said the commercial and uptake measures included “good horizon scanning and a commitment from industry to share their innovations and developments at an early stage.” There was also “a commitment from the NHS to engage earlier in a targeted way on the most transformative new products.”
Kettle said early dialogue with companies was vital to ensure that health services are ready to adopt new therapies and that they actually get used on the NHS.
“Often when you look at why new innovations have not been adopted in previous years of the PPRS it is because the NHS was not ready,” as it was not aware of the financial shift that would be needed to support the adoption of new products, Kettle observed. “So early-stage targeted engagement with industry on transformative drugs that require different pathways is really important, and will ensure that when a product lands on the NHS it will be ready.”
His comments foreshadowed similar points made at the meeting by Paul Catchpole of the Association of the British Pharmaceutical Industry, including the provision in the scheme for more “commercial flexibilities” in pricing of and access to innovative new drugs. (Also see "ABPI Exec Lauds Innovation And Access Provisions In New UK Voluntary Scheme" - Pink Sheet, 29 Apr, 2019.)
The DHSC official told the meeting delegates that “many of you will be involved in pricing and will sometimes have been frustrated by the rigid rules on patient access under the two previous PPRSs. We and NHS England acknowledge that the rigid rules-based system that we had didn’t necessarily provide the flexibility that companies need for new drugs coming to market.”
For example, he said, “it was not possible to come up with a commercial solution to address uncertainties over efficacy after four, five or six years, or uncertainties over the patient population. So there is a commitment in the scheme for more commercial flexibility to allow the uncertainties to be addressed in negotiations.”
“The greatest flexibility will be offered in dialogue to companies that can give strong value propositions for their products” – Robert Kettle, DHSC
There was an important message too for industry, Kettle said: There was "a clear steer in the scheme that the greatest flexibility will be offered in dialogue to companies that can give strong value propositions for their products" – in effect this means that the NHS is willing to "bend over backwards for the best outcomes. So this is a really important message to a company to say that if you come early with a really great value proposition, then the NHS is willing to reciprocate.”
Kettle also noted that another important aspect of the scheme was to have the health technology assessment body, NICE, carry out more appraisals of new drugs, particularly outside the oncology area, which he said was "already well served by the Cancer Drugs Fund and earlier assessment of cancer medicines.” However, this would only work if companies played their part too.
“There is a commitment in the scheme from NICE for cancer drug timelines to be matched as far as possible for non-oncology drugs too, but that is only possible if the evidence base is there and the engagement from the company is there to allow NICE to do its work as quickly as possible. This could mean earlier access to drugs not in the Cancer Drugs Fund or in the oncology pathway.” (The scheme’s provisions for the NICE process will be explored in greater detail in a future Pink Sheet article.)
Payments System
Turning to the second main part of the voluntary scheme – the payment mechanism – Kettle said it “effectively ensures the affordability of the vast majority of medicines for the NHS.”
Under this mechanism, members of the scheme make a financial contribution to the health department on net NHS sales of branded medicines above an agreed allowable growth rate of 2% per annum.
“This doesn’t mean the NHS will stop spending as soon as it reaches that limit,” Kettle stressed, “but it means that sales growth above that will be returned to NHSE and will also be shared with Scotland, Wales and Northern Ireland through the payment system we have agreed with the pharmaceutical industry.”
For 2019 the payment has been set at 9.6% of sales above the allowable growth rate, with payments in subsequent years to be determined by actual sales growth. “But that doesn’t necessarily mean that all companies will pay that,” Kettle told the audience. There are some important exemptions – for example, for new active substances, for centrally procured vaccines, and for smaller company players, he said.
In addition, there is some relief for small and medium-sized companies with NHS sales of up to £25m, which, unlike in the previous PPRS, will benefit from an exemption from the payment on the first £5m of those sales. “This is very much in response to a long campaign by smaller companies via the Ethical Medicines Industry Group,” Kettle observed. “We hope that this provides a really important signal from government... of support for small and medium sized companies.”
The system is expected to generate payments of around £930m in 2019, which is “a very significant contribution to the NHS financial position,” Kettle declared. (Also see "New UK Price Deal To Save NHS £930m & Speed Up Access To Innovation" - Pink Sheet, 26 Nov, 2018.)
He said it was “very heartening” for the NHS and the department that the pharmaceutical industry recognized the financial challenges facing the NHS and that it was “willing to support us and support the NHS” in their efforts to ensure that the NHS can continue to provide quality of care and that it is “sustainable for future generations.”
What Does ‘Transformative’ Mean?
The concept of “transformative” medicines was mentioned frequently at the meeting, and in the question and answer session, Kettle was asked how this quality would be assessed for new medicines – ie, what the criteria would be.
He suggested this could include the kind of change that would be needed to get the treatment into clinical practice – for example, whether it “simply slots in” or whether some sort of “redesign” might be needed, for example in terms of clinical and patient pathways. The NHS would also be looking at the additional benefit in quality-adjusted life years.
Every new product that comes to market may be a great innovation for patients “but there has to be a way of focusing,” Kettle said. “We can’t support everything.” More details on the criteria to be used would be made available in the coming weeks and months, he added.
From the editors of Scrip Regulatory Affairs.