Pfizer slams new pharmaceutical pricing scheme

Published: 6-Nov-2013

ABPI says the Government and the NHS need to recognise that medicines are not a cost but an investment in patient care


The latest Pharmaceutical Price Regulation Scheme (PPRS) agreed by the UK Government and drugmakers represents a 'missed opportunity for patients, industry and the UK economy', according to Pfizer.

The pharmaceutical firm says the agreement 'represents a real and growing disconnect between the Government’s stated ambitions, and its actions, in life sciences and in improving patients outcomes'.

It adds that the 'overriding focus on managing costs and its failure to see medicines as a longer-term investment is a short-term and damaging approach for all those concerned, but most notably for UK patients'.

Pfizer says less than £1 in every £10 of the NHS budget is spent on medicines and the UK spends less per person than comparable countries. By January 2014, the industry will have already given over £4bn back to the NHS in price cuts over the last 10 years and by the end of 2014, it will have saved the NHS a further £3bn as a result of patent expiries.

The firm adds that 'while at first sight this deal seems to improve access for those medicines already approved by the National Institute for Health and Care Excellence (NICE), it does not address the fundamental problems currently blocking many innovative new medicines from reaching the patients who need them.'

Focus on managing costs and its failure to see medicines as a longer-term investment is a short-term and damaging approach

Pfizer says since 2005, only 31% of medicines have been recommended by NICE in line with their licence, and this year, 'of the 12 single technology appraisals on which NICE has made final or preliminary decisions for new cancer medicines, only one has received a positive preliminary recommendation'. Of those that are recommended by NICE, 'the NHS is too slow to adopt them'.

The pharmaceutical giant adds that while 'the UK Government wants new medicines to be researched and developed here, it is not prepared to pay for the life changing and life-saving medicines that result from this investment. In today’s competitive global economy such a stance sends the wrong signal for potential future decisions.'

Jonathan Emms, Pfizer's UK Managing Director, says: 'If the Government wants Britain to be a world leader in life sciences, it must act now to address these issues. Now the deal is agreed, Government must take action to fix the UK system and ensure that innovative new medicines get to the patients who need them. NICE must be given a new mandate, one that makes it a beacon for innovation, helping to deliver the Government’s ambitions and benefitting patients, the NHS and the UK economy.'

The new five-year, multi-billion pricing deal will introduce a fixed limit on NHS spending on branded medicines for the first time. All additional expenditure above this level will be paid for by industry.

The Government says the deal will allow the NHS to 'increase the availability and use of the best branded medicines and most innovative treatments without risking a spiralling bill for the taxpayer'.

At the same time, pharmaceutical companies will benefit from 'greater certainty on how much will be spent each year and increased use of new and recently developed medicines'.

NHS spending on branded medicines – more than £12bn in 2011/12 – will remain flat for two years, followed by small increases of less than 2% in the following three years. This compares with an average growth of 5% in previous years.

The Government adds: 'The previous agreement generated savings through an agreed price cut on branded medicines sold to the NHS but with no upper limit on overall cost. The bill for branded medicines will now grow at an agreed level, the NHS will spend up to the agreed amount and any cost above that level will be absorbed by the industry.'

This has been a very challenging and long negotiation and it should not be underestimated how tough this deal is for the industry

'This has been a very challenging and long negotiation and it should not be underestimated how tough this deal is for the industry,' says ABPI President, Deepak Khanna.

'However, we have agreed to play our part in recognising the financial challenges facing the NHS while focusing on the key issue of ensuring that patients in the UK get access to the medicines they need.'

He emphasises that the Government and the NHS 'need to recognise that medicines are not a cost but an investment in patient care and do their part to ensure that patients have access to new and innovative medicines that will improve the quality of their lives'.

Steve Bates, Chief Executive of the BioIndustry Association, says the agreement 'shows a worrying lack of joined-up thinking about a key sector for the UK's future economic growth'.

'The BIA has repeatedly warned that the government's pricing proposals for pharmaceuticals put at risk future investment in the UK R&D base, as the perception of the UK as a market for innovative products has an important bearing on the global investment decisions of multinational biopharmaceutical companies,' he says.

'It is extremely disappointing to see that the Department of Health believes there is no reason to expect that changes in UK prices will 'significantly affect the UK's attractiveness as a location for R&D'.

'The exemption of new products launched after 1 January 2014 from payments under the new PPRS scheme offers scant consolation for companies, particularly when balanced against the changes to the scheme for smaller companies that will make the UK a less attractive destination for global companies wanting to set up a European headquarters.

'I fear this agreement will have a negative impact on industry investment here which is contrary to the government's stated industrial and life science strategies.'

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