The British Generic Manufacturers Association (BGMA) has published a positioning paper which sets out the objectives that need to be delivered through the
next Voluntary Pricing and Access Scheme (VPAS) on Thursday (15 June).
The paper details how a financially sustainable VPAS can support widened medicines access to patients.
VPAS is an agreement between the Department of Health and Social Care (DHSC), NHS England and The Association of the British Pharmaceutical Industry (ABPI).
The scheme aims to limit increases in spending on branded medicines to no more than 2% per year via a rebate system which is charged on companies' sales revenues.
Two years ago, the rate was 5.1% but for 2023 it has soared to 26.5%. Last year, the association had raised concerns over the rise in the VPAS rate for 2023 to
26.5 per cent.
"The rocketing rate is in large part due to the growth in spend in on-patent medicines since 2019. Looking at the four completed years of the current VPAS scheme,
data shows that the average annual growth rate for on-patent medicine sales value from 2019-22 was 18% compared to just 2% for off-patent products," said the
association.
The British Generic Manufacturers Association (BGMA) has raised concerns over the rise in the VPAS rate for 2023 to 26.5 per cent.
The Department of Health Social Care (DHSC) today announced that the 2019 voluntary scheme payment percentage for 2023 will be 26.5%. The 2019 voluntary scheme
for branded medicines pricing and access is an agreement between the Department of Health and Social Care, NHS England and the Association of the British
Pharmaceutical Industry.
BGMA believes that the high VPAS tax for 2023 risks more medicines shortages, rising prices for the NHS via reduced competition, and new medicine launches to the
UK being deferred.
Mark Samuels, Chief Executive of BGMA, said: "Raising the VPAS tax to 26.5% will damage the UK's medicines supply because it will make some products lossmaking. It
is more than a five-fold tax increase from 2021, and no industry can cope with this unpredictable and exceptional tax volatility.
The British Generic Manufacturers Association (BGMA) has warned of the significant implications for future supply as a result of the crippling VPAS rate.
The warning comes after the association's judicial review into the Government's decision to bar it from being a full part of the negotiations for the next
five-year VPAS period was dismissed.
The voluntary scheme for branded medicines pricing and access (VPAS) is an agreement between the Department of Health and Social Care (DHSC), NHS England and
The Association of the British Pharmaceutical Industry (ABPI).
The scheme aims to limit increases in spending on branded medicines to no more than 2% per year via a rebate system which is charged on companies' sales revenues.
Two years ago, the rate was 5.1%, but in 2023 it has soared to 26.5%. All biosimilars and a proportion of the generics market falls into the scheme.
The government, NHS England and the Association of the British Pharmaceutical Industry (ABPI) has begun the negotiations for a new voluntary scheme for
branded medicines pricing on Thursday (4 May).
A new voluntary scheme is expected to take effect from 1 January 2024, replacing the current scheme which came into force in 2019 and ends on 31 December 2023
In their first meeting, the government, NHS England and industry - represented by the ABPI -expected to agree to a shared negotiation aim of working toward a
mutually beneficial agreement that supports better patient outcomes and a healthier population, a financially sustainable NHS, and UK economic growth.
Health Minister, Will Quince, said: "These negotiations will ensure a new scheme continues to deliver value for money by providing significant savings for our
health services, securing access to innovative lifesaving drugs for NHS patients, and helping to reduce waiting times - one of the Prime Minister's 5 priorities.
The current voluntary scheme supports investment in NHS services and saves billions of pounds for the NHS, while also promoting innovations and a successful life
sciences sector.
The Association of the British Pharmaceutical Industry (ABPI) on Thursday (February 2) called for the government to scrap its plans to raise the repayment rates
for drugmakers, to avoid possible setbacks in the sector.
Drugmakers that are part of the government's voluntary scheme agreement, which makes branded medicines affordable for people, are required to pay a part of their
drug revenue to the government.
The Department of Health and Social Care plans to raise the revenue clawback rate to 27.5 per cent from 24.5 per cent.
The country's ongoing attempt to raise rates is likely to send the "worst possible signal" to global investors and boardrooms, said the ABPI.
"Hiking these clawbacks to such uncompetitive levels risks undermining the UK's offer to global life sciences companies," Richard Torbett, chief executive of the
ABPI, said in a statement.
Pharmaceuticals giants AbbVie and Eli Lilly withdrew from the UK's voluntary drug pricing agreement in January after the repayment rates surged to 26.5 per cent.
The Association of the British Pharmaceutical Industry (ABPI) has proposed a Voluntary Scheme for Pricing, Access and Growth (VPAG) that aims to deliver a
sustainable approach to medicines provision and maximise the growth potential of the UK life sciences industry.
It has published the industry's vision for a new agreement with the government which will deliver for patients, the NHS and the economy.
VPAG also includes measures to ensure rapid patient access and adoption of new medicines, as well as opportunities to improve health outcomes and productivity for
the whole country.
The association's proposals consist of four key areas: restoring an internationally competitive commercial environment for life sciences; supporting UK clinical
research and R&D; ensuring rapid patient access and uptake of new medicines; and improving population health and productivity through health innovation.
The proposal would deliver over £1bn a year to the NHS - around £300m more than the average delivered under the old scheme before 2023, and comfortably more than the
highest contributions ever made before the pandemic.
The government has launched a consultation into radically changing the Statutory Scheme for branded medicines (known as the Statutory Scheme).
The consultation comes as delicate negotiations for replacing the alternative Voluntary Scheme are underway, potentially undermining these talks, while also further
damaging industry confidence in the UK as a viable place to research, launch and supply medicine.
The government proposals seek to hold average revenue clawback rates under the Statutory Scheme at historic highs of between 21-27%, compared to the pre-pandemic
averages of 9.4% for the Statutory Scheme (2019-2021), and 6.88% for the Voluntary Scheme (2014-2021). The accompanying cost-benefit analysis ignores any negative
impact this may have on medicine supply and wrongly claims it will boost investment.
The consultation comes on the heels of government data last week showing UK life sciences foreign direct investment (FDI) fell by 47% between 2021 and 2022, down
by £900m year on year. This large fall in investment coincided with a rise in the main UK clawback rate under the Voluntary Scheme from 5% to 15%, and led to the
UK falling from 2nd to 9th out of 18 comparator countries for life sciences FDI in 2022. The Voluntary Scheme clawback rate now sits at a record 26.5% in 2023.
The British Generic Manufacturers Association has backed the UK government's proposed changes to the Statutory Scheme for branded medicines, which includes
a 'Life Cycle Adjustment' (LCA) mechanism to permit a lower rebate rate for medicines sold in competitive markets. The association underscored the necessity for
crucial amendments to forestall unintended consequences and ensure a practical alignment with market operations.
A precisely tailored approach is crucial in ensuring sustainability and growth in this sector, the BGMA said in a statement on Oct. 11. The Department of Health
and Social Care is currently working on the successor to the 2019 voluntary scheme for branded medicines and pricing access (VPAS) agreement, slated to end in 2023.
Negotiations for this successor, scheduled to begin on January 1, 2024, are already underway.
"We are pleased that the Statutory Scheme consultation recognises that branded generic and biosimilar medicines are subject to different market dynamics and
competitive pressures," said Mark Samuels, Chief Executive of BGMA. "As such, a one-size-fits-all approach across all branded products is not suitable for the
next five years. It is crucial to adopt a precisely tailored approach to this sector, ensuring both sustainability and growth."