Key Issues

 

Value Based Pricing

The Department of Health (DH) has recently consulted on proposals for a new value-based system of pricing medicines, which aims to give NHS patients better access to effective and innovative medicines. EMIG is supportive of the broad objectives set out by the DH's consultation. However, in forming a Value-Based Pricing scheme EMIG believes it is essential that the Government engages with all pharmaceutical trade associations in each step of creating the system. 

EMIG also believes there is a role for healthcare professionals and patient groups to play in the development of the scheme and that as wide a range of stakeholders as is possible must be consulted and included in the design and development process.  EMIG believes this is the only way to achieve the proposed objectives set out in the DH's consultation and create a better system for patients, the NHS and the whole industry.

EMIG believes the new Value-Based Pricing model must deliver better patient outcomes, reasonable prices for the NHS, and incentivise the industry to research, develop and market innovative medicines in the UK.  EMIG will be engaging with the DH to highlight the value its member companies bring to the UK, and how these factors can best be assessed, incentivised and rewarded.

Please find a short briefing note below - A value-based approach to the pricing of branded medicine

Introduction

In forming a value-based pricing scheme the Ethical Medicines Industry Group (EMIG) believes it is essential that the Government engages with all pharmaceutical trade associations in each step of creating the system. EMIG also believes there is a role for healthcare professionals and patient groups to play in the development of the scheme and that as wide a range of stakeholders as is possible must be consulted and included in the design and development process. EMIG believes this is the only way to achieve the proposed objectives set out in the consultation and create a better system for patients, the NHS and the whole industry.

EMIG is supportive of the broad objectives set out by the Department of Health's consultation, A new value-based approach to the pricing of branded medicine. EMIG believes that the new Value-Based Pricing model must deliver better patient outcomes, reasonable prices for the NHS, and incentivise the industry to research, develop and market innovative medicines in the UK. EMIG looks forward to working with the Department of Health on the value its member companies bring to the UK, and how these factors can best be assessed, incentivised and rewarded.

Specific issues

EMIG believes there are a number of key issues which require consideration and discussion in the development of a value-based pricing system. These issues include:

Incremental innovation

Innovative medicines offer potentially life-changing developments for patients, either through targeting a new or niche disease area, or transforming the way patients receive their treatments. Innovation also holds the potential to deliver significant savings to the NHS and EMIG supports this laudable aim.

Much of the development carried out by EMIG members is focused on incremental innovation of existing products. However, at present, innovation is perceived to be the development and launch of New Active Substances (NASs). It has been demonstrated that individual medicines that deliver ‘step changes' are rare and are usually achieved over a period of time and through gradual improvements delivered by a number of products.

These improvements, such as enhanced delivery mechanisms and medicines with fewer side effects, are of great benefit to patients and the NHS and we do not believe that the definition of products to be included in the new scheme should be confined to NASs.

Determining value

The purpose of Value-Based Pricing is to reward and incentivise the development of medicines that result in benefits to patients. EMIG believes it is important to have an open discussion about the criteria for assessing ‘value' before any new pricing and reimbursement scheme can be built on this principle. The Ethical Medicines Industry Group (EMIG) is the biopharmaceutical trade association that represents the interests of over 135 small to medium-sized companies (SMEs).

In the UK, approximately 90% of pharmaceutical companies are SMEs and it is estimated that 80% of innovation is derived from these companies. EMIG member companies employ approximately 10,000 people in the UK and have a combined annual turnover of £2bn.

Our members believe that clinical efficacy should be the primary indicator of value, with reimbursement levels set against the impact a medicine can have on patient outcomes. It is thus essential that the definition of ‘value' in value-based pricing includes the assessment of societal value and captures incremental and therapeutic innovations.

Mechanisms for assessment

EMIG has concerns with the sole use of the Quality Adjusted Life Year (QALY) assessment which has been suggested will become the basis for the development of the cost effectiveness threshold element of Value-Based Pricing. We believe that other options need to be considered when assessing value of medicines, particularly for rare diseases.

EMIG believes that those responsible for attributing, designing and operating the process of assessment should include healthcare professionals experienced in treating the particular illness or patients and relevant patient groups. The process should be transparent, consistent and inclusive.

PPRS successor scheme

The proposed PPRS successor scheme should be developed alongside value-based pricing. For many of our members, successive price cuts delivered through the existing PPRS have had a detrimental impact on business development, market entry and the ability to invest in sustained research and development (R&D). With successive price reductions under the PPRS the price of older, off-patent products, has been reduced dramatically to the point where their continued provision is no longer viable. In developing the successor PPRS, this issue must be overcome.

Enabling businesses to plan

To enable the NHS to understand new frameworks for assessment and for companies to begin business planning for the new system, EMIG believes it will be essential that a detailed framework is devised for Value-Based Pricing to be published during 2011.

EMIG is calling on the Government to:

Health and Social Care Bill

The Health and Social Care Bill represents the most extensive reorganisation of the NHS since it's creation in 1948 with a backgdrop of the biggest efficiency drive in its history.

EMIG is committed to working with Government to assist the implementation of change. Because of the breadth of its membership, from biotechs to highly developed international companies, EMIG is uniquely positioned to provide a practical contribution to help achieve our aim of improved outcomes for patients.

Market Access Barriers

In a survey of EMIG membership in late 2009, companies identified that the most significant issue affecting patient access to innovative medicines is market access.

Market access can be defined as the extensive local assessment of new medicines across the UK. Much of the assessment is inconsistent, duplicative, non-transparent and does not engage with the industry.

EMIG, through its expert Market Access Group, has created a proposal to address these issues, cut NHS costs and, most importantly, enable faster patient access to innovative medicines.

NHS QIPP Agenda

The NHS is seeking ways to improve standards and reduce costs by working more closely with industry.

Because of the diversity of its membership, EMIG has a unique insight into the differing ways in which companies can contribute to this partnership.

EMIG is engaging at a number of different levels with the NHS on creative projects to enhance patient treatment pathways.

This means patients are likely to be treated sooner, minimising waste and optimising the cost of therapy.

Pharmaceutical Research & Development in the UK

EMIG has appointed Dr Mark Edwards FRCA, as EMIG R&D Director.

EMIG is committed to stimulating pharmaceutical innovation in the UK by enabling its member companies to work more closely with NHS and academic institutions in order to improve the productivity of their research and development.

R&D productivity in the UK has been declining for some time and has been the subject of dis-investment, particularly in recent years. EMIG is committed to reversing that trend and to re-establishing the UK as a centre of excellence.

Medicine Assessment Submission Costs

Where a company develops an innovative medicine for small patient groups, the outsourced submissions costs can act as a disincentive to launch.

EMIG, as part of its market access strategy, is seeking to highlight the consequences to patients.

MHRA

EMIG works closely with the MHRA on all issues relating to the provision of safe and effective medicines.

Medicines Distribution

EMIG companies are concerned about the continued changes in the UK supply chain and the uncertainties created. EMIG companies provide high quality value for money medicines want a secure and affordable mechanism to ensure their products reach patients on time.

Shortage of Medicines

EMIG was represented at the Ministerial Summit on supply chain shortages on Tuesday 2nd March along with representatives from other UK organisations.

Secretary of State for Health, Andy Burnham, stated that the supply of medicines to patients is a fundamental responsibility of the Health Minister but that the public expected all those organisations present to ensure supply is maintained.

The Summit agreed the following statement:

‘There is a commitment from all participants to collaborate with government and the rest of the supply chain to ensure that medicines supplied for UK patients actually reach them. We are working together on a package of actions to reinforce the responsibilities that apply to all of us, through development of best practice guidance, and to investigate how through regulatory action (including inspection) we can support this aim.'

EMIG continues to work with other stakeholders to ensure patient supply is not compromised.

Code of Practice

EMIG member companies believe in the highest standards of self-regulation and in a workable Code of Practice.  EMIG is actively engaging with the PMCPA's review of the current code and is committed to maintaining high standards across the industry.

Pharmaceutical Price Regulation Scheme (PPRS)

EMIG is working with stakeholders to ensure equity for small and medium sized companies under the Pharmaceutical Price Regulation Scheme.

Anicca Solutions: Website Design & Website Development