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The British Generic Manufacturers Association (BGMA) has sought a judicial review of the Department of Health and Social Care's (DHSC) decision to negotiate a new Voluntary Scheme for branded medicines with the Association of the British Pharmaceutical Industry (ABPI). Mark Samuels, Chief Executive of BGMA said: "The Government has decided not to involve the trade body representing these medicine suppliers in its negotiations on the voluntary scheme for branded medicine pricing (VPAS). "We are deeply concerned by this decision. It has left us no choice but to take legal action." "While not all generic drugs fall within VPAS, four out of ten products in the current scheme are branded generics or biosimilars. As the representative trade body for both generic and biosimilar UK manufacturers, we must play a full part in the VPAS negotiations for the next period of the scheme from 2024 to 2028." "The VPAS tax has risen five-fold in under two years, an unprecedented tax increase. Yet our sector currently has no input into the negotiations on future schemes or rates; this is untenable as any decisions made on VPAS could significantly define the future of our sector in the UK and its ability to supply the NHS. The association had raised its full participation in the negotiations with the Government last November.

The High Court has dismissed the British Generic Manufacturers Association (BGMA)'s claim on being excluded from ongoing negotiations between the government and industry to agree a new Voluntary Scheme for medicine pricing and access (VPAS). The association had sought a judicial review of the Department of Health and Social Care's (DHSC) decision to negotiate a new Voluntary Scheme for branded medicines with the Association of the British Pharmaceutical Industry (ABPI) in April. Commenting on the result of the case, Richard Torbett, Chief Executive of the ABPI said: "For over 60 years the ABPI has acted as the representative industry body for negotiations on the Voluntary Scheme for branded medicines - a responsibility we take extremely seriously - and one which has been reaffirmed by today's judgment. "While we were disappointed that the BGMA decided to take this action - we recognise their decision was driven by the extreme challenge placed on all parts of the industry from the surge in the branded medicine payment rates. "The solution to these problems must be a completely new and sustainable approach to medicines provision in the UK which rapidly brings industry revenue payments in line with comparator countries to unlock investment and growth."

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 British Generic Manufacturers Association (BGMA) has warned that England's 42 integrated care boards (ICBs) may need to allocate an extra £37 million from their budgets annually for the next five years due to the spiralling tax rates. The government's Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) rebate rate increased more than five-fold in the past two years, the BGMA said in its white paper released on Monday (October 30). The report, conducted by consultancy firm Conclusio in consultation with local NHS leaders, examined the potential effects of the VPAS on ICB budgets. BGMA said that due to the elevated VPAS rate, each ICB in England will experience significant increases in expenses for branded generics and biosimilars annually - a consequence of reduced competition.

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."