Value-based drug pricing scheme needed, OFT says
Drugs are priced in a way that does not reflect their therapeutic
value, the Office of Fair Trading argues |
Value-based approaches to medicines pricing should replace the current Prescription Pricing Regulation System, the Office of Fair Trading recommended this week.
The present system falls short of its objectives and over £500m
a year could be saved through more cost-effective prescribing, the OFT
argues. “Neither the profit cap nor the price cut helps secure
prices that reflect the therapeutic value of the drugs that companies
are supplying to the NHS. For a scheme that sets out to deliver value
for money for the NHS and give companies the right incentives to invest,
we consider this to be a major shortcoming.”
In a report
published this week the OFT proposes that, under a fully
reformed PPRS, maximum prices for branded drugs would be set on value-based
principles. The focus of the report was not, however, on whether the
aggregate level of prices or the overall amount spent on medicines in
the UK is too high. The OFT therefore emphasises that its suggestions
would not necessarily reduce spending on medicines since any savings
on poor value drugs would release resources for other valuable, but high-cost
medicines.
Under the proposed scheme manufacturers would submit a suggested price,
along with cost-effectiveness evidence, which would differ across indications.
An analysis of value-reflective prices would then be undertaken in a
co-ordinated way by the National Institute for Health and Clinical Excellence,
the Scottish Medicines Consortium and the All Wales Medicines Strategy
Group.
If these organisations considered that, at the given price, the drug
would fall within the cost-effectiveness threshold in all indications,
the drug would be recommended for use in the NHS. Recommendations would
take the form of guidance similar to that issued by the SMC or through
NICE’s single technology appraisal process. If the drug were considered
too expensive to be cost-effective, the appraising bodies would suggest
the highest price that would be acceptable for each indication. Revised
NHS list prices or rebates would then be negotiated by the Government
and the manufacturer.
The OFT suggests that, in the long term, a commission on the value of
medicines could be created to formalise the co-ordination between NICE,
the SMC and the AWMSG. At least one pharmacist should contribute to the
price recommendation for every drug considered
by this commission, the OFT believes.
The Association of the British Pharmaceutical Industry has, however,
challenged some of the report’s assertions on medicines pricing
in the UK. “Medicines in the UK represent excellent value for money,
and prices are on a par — or lower — than those of comparator
European countries. The current system that controls medicines prices
in the UK, the PPRS, has produced £1.2bn savings for the NHS, according
to the National Audit Office,” the ABPI said in a statement. “However,
the pharmaceutical industry wholeheartedly supports the desire of the
NHS to deliver value for money, and we are ready to sit down with the
Government to discuss ways in which this might be better achieved.”
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The
Pharmaceutical Journal
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