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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 Medicines Association (BGMA) has called for exemption from the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS), an agreement between the UK Government, NHS England, and the pharmaceutical industry for branded generics and biosimilars. "Due to the rising rate of VPAS on top of existing competition, manufacturers are finding the additional levy economically unviable given their already low prices," the association said. According to research by the Office of Health Economics OHE and Professor Alistair McGuire (LSE) the rising rate of VPAS will force manufacturers pull out of the market which may lead to prices rise due to a lack of competition and critical savings to the NHS will be lost. The new study stated that Government levy on medicines designed to increase access to new treatments and promote affordability could actually be denying the NHS billions of pounds of annual savings due to the impact it is having on branded generics and biosimilars.

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 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."