Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
UK ministers have vowed to rapidly review a critical NHS drug-pricing deal after pharmaceutical companies complained the arrangement had imposed higher than expected costs on the industry.
Health secretary Wes Streeting told an industry conference on Thursday the government would look again at the scheme, under which drugmakers discount the price of medicines sold in bulk to the NHS in England.
The process would be completed by the government’s June spending review, Streeting said, as he argued the UK needed to stop seeing medicines as a “deadweight cost” as opposed to an “investment”.
“We’ve moved from, quite rightly, trying to drive a good bargain on the prices of drugs and treatment to a position where sometimes people view medicine spend as a bit of a deadweight cost,” he said.
Streeting said the government wanted to ensure “in the coming weeks we are in a position where we can conclude [the review] and frankly, get it out of the way in June so we can move on to bigger and more important things”.
It was not clear how much the review would reduce costs for drugmakers. Richard Torbett, who heads the Association of the British Pharmaceutical Industry, said he “cannot underestimate the challenges to getting to a solution over the next few months”, given the government’s budget constraints.
Every five years, the UK government, NHS England and the pharmaceutical industry agree a cap on total sales of drugs to the NHS in a certain year, which grows at an agreed rate annually. Any sales above that cap are paid back to the NHS in the form of a levy.
The scheme is aimed at protecting the NHS’s finances by ensuring that when it spends more than expected on drugs, it gets money back.
This year the Voluntary Scheme for Branded Medicines Pricing and Access and Growth (VPAG) — negotiated by the previous Conservative government — will mean drugmakers pay back 22.9 per cent of their UK sales to the government, more than the 15 per cent predicted in industry and government models.
The higher than expected level is a result of NHS England having purchased higher than anticipated quantities of curative cell and gene therapies and medicines for conditions including cancer and diabetes.
Drugmakers have complained it has put investment in the UK at risk, just as the Labour government is trying to boost the country’s stagnant growth.
Streeting on Thursday said the current system was not ensuring that drugs recommended by the cost-effectiveness watchdog the National Institute for Health and Care Excellence were available across the country.
“It’s almost like the guilty secret of our country that when people go to see a doctor . . . they assume they’re getting the best treatment available,” he said. “But it is not the best treatment available always in our country.”
