Bad for patients and bad for growth?

2020health today publish a review from a patient’s perspective of the Government’s plans to change the way medicines are priced. Featured in today’s FT (£) we point out that patients are usually blissfully unaware of pricing negotiations but the Government’s new plans for pricing will politicise a formerly non-contentious issue.

Our report entitled “Value-based pricing: the wrong medicine for the nation?” takes the approach of asking what concerns would the public have if a new system of ‘value-based pricing’ were introduced. Despite the intensive negotiations and new promises to include patients further in deliberations – particularly following interventions by Prostate Cancer UK and Myeloma UK – this is an idea it seems was flawed from the start.

Our primary concern is to ensure that sick people have as rapid access as possible to new medicines in the UK, and to give the UK the best possible environment to continue to attract research and development across all life sciences. We are concerned that the VBP proposals will jeopardise this.

We make some of the following points about introducing value-based pricing:

1. Losing the current industry-government negotiated ‘patient access schemes’ will reduce not improve access to medicines.

2. Patients would have valid concerns about fairness.

3. Patients know that value alone cannot determine drug prices because commercial competition imposes a ceiling.

4. The public would soon realise that value-based pricing cannot easily be applied to the most important medical breakthroughs.

5. The difficulty with pricing a drug which is used for different conditions.

6. The public could see the pricing of medicines made into a political issue.

7. Patients will know that ‘value’ is subjective – it can’t be given a finite number.

Barbara Arzymanow, main author of the report and an investment analyst who has always worked outside of the pharmaceutical industry has stressed the point that the public have been told that politicians are staying out of the NHS, so this change could seem like hypocritical interference. “Patients could mistake value-based pricing for a commitment to make more medicines available, which is not the case. One product can have many uses and dosage regimes which are of different ‘value’ to different people. Pricing of medicines can be improved, but not through this entirely new scheme. The confidence of patients and the future of medicine are more important than words.”

Our report urges the Government to consider solutions including:

  1. Continue allowing drug companies to fix their own prices for individual drugs with new controls operating at the higher level of the entire cost of each company’s drugs to the NHS. The current PPRS achieves this aim mainly by a profit cap but the same objective could be achieved in other ways e.g. a revenue cap, a trading margin cap.
  2. Companies would commit to enabling access to their products under the NHS except in extreme cases by adjusting their prices appropriately, for example by lowering the price of older drugs by enough to accommodate high enough prices for new products.
  3. Provide a fair financial return to all companies, taking into account the broader need to control government spending, the benefit to the UK economy from high-technology investment and the desirability of R&D to ensure that medicine continues to advance. A pricing system should also encourage companies not to overlook rarer diseases in search of drugs for more lucrative markets, for example, by offering a bonus for drugs treating less common conditions.
  4. Encourage more ‘patient access schemes’ to help make drugs available to patients on the NHS at a cost that the drug industry would otherwise find unacceptably low.



About Julia Manning

Julia Manning is a social pioneer, writer, campaigner and commentator. Formerly a clinical optometrist specialising in diabetes and visual impairment, she is the founder and Chief Exec of 2020health, an independent, social enterprise Think Tank whose aim is to Make Health Personal and Social. 2020health has through research, events and campaigning influenced opinion and action in fields as diverse as bioethics, alcohol, emerging technologies, fraud, education, consumer technology and vaccination. In 2014, 2020health were founding partners of the Health Tech and You Awards with Axa PPP and the Design Museum, now in their 5th year. Since 2016, 2020health has increasingly focused on digital health and public health in the community through the concept of 'Whole School Wellbeing'. Julia is a Fellow of the RSA and a part-time PhD student at the UCL Interaction Centre, studying the use of digital technologies for stress management in the workplace. Julia has shared 2020health's research widely in the media (BBC News, ITV, Channel 5 News, BBC 1′s The Big Questions & Victoria Derbyshire, BBC Radio 4 Today, PM and Woman's Hour, LBC) and has taken part in debates and contributed to BBC’s Newsnight, Panorama, You and Yours and ITV’s The Week.
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