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Value-based Pricing of Medicines

March 11, 2012

The UK government plans to fundamentally overhaul the way medicines are paid for, introducing a value-based pricing system, in 2014.

The White Paper Equity and Excellence: Liberating the NHS also proposes changes to the role of NICE and structural shifts in the way NHS budgets are handled, with control of 80% of funds passing to GPs.

The change to value-based pricing will not happen immediately – the current PPRS scheme will first be allowed to run its course to 2014. After that drug prices will be set according to the value medicines provide, with access likely to be no longer limited by NICE-set cost-effectiveness thresholds.

“This will help ensure better access for patients to effective drugs and innovative treatments on the NHS and secure value for money for NHS spending on medicines,” the government noted in the White Paper.

In the interim period the government will set up a new Cancer Drug Fund from April 2011 to improve patient access to treatments.

A different role for NICE

The White Paper also tasks NICE will developing new standards for the commissioning of all NHS care and payment systems, and against which progress on improving outcomes will be judged.

NICE will set out authoritative standards and indicators for each part of the patient pathway in a change of direction that will rapidly expand its existing work programme.

The Institute’s prime focus to date has been to assess the cost and clinical effectiveness of medicines, but in June it produced the first three standards, on stroke, dementia and prevention of venous thromboembolism. Each standard is a set of 5-10 specific, concise quality statements and associated measures and within the next five years NICE will be expected to have produced 150.

The White Paper also proposes putting NICE on a firmer statutory footing, securing its independence and core functions and extending its remit to social care.

The Industry reaction to NHS White Paper

The ABPI said it approved with the governments stance on the importance of setting quality standards “for the new era of GP-led commissioning” and welcomed NICE’s involvement in the process.

Then Director-General Dr Richard Barker said: “The ABPI believes that this expansion of NICE’s remit to promote clinical best practice is a higher priority for the future of the NHS than the overly narrow cost effectiveness calculations on new medicines it currently conducts.”

But he was far more cautious when it came to the proposed pricing changes, noting only: “The new Government also proposes to introduce a Cancer Drugs Fund and to review how better to reflect value in the pricing of NHS medicines. We look forward to working with the Government to develop these proposals further whilst maintaining the stability of the current PPRS agreement.”

Things are very uncertain at the moment, the ABPI is under new leadership and [tiny] thinks that the mind-set will change from a focus on niches (cancer) to marketing and pushing this economically vital industry from the trade association.

[tiny] have good experience in value-based pricing in pharmaceuticals, and beyond. We also have excellent partners in Market Access, Training and Government Relations.

Email us today for a chat. For business links – dealing with Government

Keep an eye out for our general Value-based Pricing Article this week – relevant to all markets!

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