Progress with the UK’s VPAG

Leela Barham looks at the first operational review meeting minutes that have been published on the VPAG, the UK’s latest scheme on branded medicines pricing and access, building on previous work to look at the transparency of the scheme. A second piece, also published today, delves more deeply into the first VPAG metrics.

As part of transparency data, the Department of Health and Social Care (DHSC) – the government agency responsible for managing the scheme – published on the 4th October the meeting minutes of the first operational review meeting of the VPAG 2024 held in July. Industry body the ABPI has also published a blog on the scheme.

Cross-government and industry attendance

The first operational review meeting took place on 22nd July with attendees from DHSC, NHS England, the ABPI, a representative from the Northern Ireland government, the Office of Life Sciences, as well as the HTA body NICE.

With the VPAG covering both in-patent and generic branded medicines, the BGMA, the generics industry body, was there too, but in an observer role.

Two hundred and twenty-three companies are members of VPAG, according to a membership list set out by the DHSC as of 1st January 2024, when the scheme formally began. They account for 94% of the market. So, there are a lot of companies with an interest in how VPAG is going.

If attendance can be considered a proxy for the importance of the VPAG, it’s a priority for the DHSC and the ABPI, but less so for others. The DHSC had 11 attendees, the ABPI six, NICE and OLS both had two and NHS England and the Northern Ireland government one. Wales and Scotland were not represented. Kudos to the one person from NHS England who was willing to go alone, given the need for NHS England to deliver on a host of commitments set out in the VPAG.

NHSE was not part of discussions on VPAG metrics on 19th July, whereas ABPI, DHSC, and NICE were. It’s not clear who was there for a discussion held on 17th July.

Payments made for Q1 2024

The meeting notes echo the reported £597 million made in payments by companies to the DHSC as part of VPAG for the first quarter of 2024, published at the end of July 2024.

The minutes don’t note the extra £1 million as a contribution to the VPAG investment fund to support a range of work committed to in the VPAG that is in the aggregate net sales and payment information.

Reference pricing

VPAG departed from previous arrangements by setting out different payment rates for ‘older’ medicines compared to rebates due on sales of new medicines. The ABPI has described it as a “significant departure”.

The amount companies with older products need to pay is based on how much the price has changed versus a historic reference price.

Determining what is old, what the historic reference price should be, and ultimately what payments are due must have been a lot of work because it’s an area of work that has taken longer than expected. The meeting minutes include a DHSC representative thanking companies for their patience in the first phase of work on reference prices. The ABPI said it was a huge and complex exercise. The hope is, once the first run of the work to identify reference prices has been done, it’ll be a lot easier in the future.

Determining reference prices is so complex that the DHSC and ABPI said that they would be holding two workshops to help companies, be they members of VPAG or subject to the statutory scheme, a legally backed scheme that applies when companies have chosen not to join VPAG.

Reference pricing was a particular concern to the ABPI, who called for more discussion in the next meeting. The ABPI is on record about how rebates on older medicines could impact the viability of some of them and called for an “escape valve” or “release valve” based upon provisions that already exist in VPAG to allow for companies to apply for a price increase or exemption from the rebate.

The ABPI warned in its blog of other unintended consequences, potentially including innovative treatments being caught up in definitions for older treatments.

Dispute under the 2019 VPAS

VPAG is just the latest iteration of agreements struck between the UK government and industry. The minutes note that, whilst there are no disputes under the current scheme, there has been one dispute raised by a company under the previous scheme, the 2019 VPAS. That dispute seems to still be in train.

Progress on Chapter 3

The meeting minutes set out an update from NHS England on Chapter Three of the VPAG. That chapter covers access, adoption, and outcomes, with further details on engagement, horizon scanning, system readiness, system architecture, NICE value assessments, commercial arrangements and, finally, equitable adoption of clinically and cost-effective medicines.

Progress includes NHS England running a consultation on an update on NHS England’s commercial framework (to note: ABPI say it’s NICE’s commercial framework, but it isn’t) and the budget impact test used at NICE. The threshold for when companies are asked to enter into discussions on managing budget impact could be raised from £20 million to £40 million.

The notes also highlight the piloting of an outcomes-based agreement for advanced therapeutic medicinal products. Since the operational review meeting, more details have emerged, with ABPI linking in their blog to the news that CSL Behring’s Hemgenix (etranacogene dezaparvovec), the first single infusion gene therapy for adults with severe or moderately severe haemophilia B without a history of FIX inhibitors, was approved by NICE, including an innovative payment model. It’s the first treatment funded through the Innovative Medicines Fund.

The pilots will inform the identification of best practices in the future, due to be presented to the Patient Access to Medicines Partnership (PAMP) meeting. PAMP has been described as a forum for strategic, high-level discussions and includes a small group drawn from industry, government, NHS England, regulators, and a patient representative. More doesn’t seem to be in the public domain, adding this group to the list of mysterious groups, like the UK Life Sciences Council.

VPAG investment programme

VPAG includes extra monies – up to £400 million - being collected from member companies to fund activities that cover improving horizon scanning, further development of methods and processes used by HTA bodies across the UK, timely updates of NICE clinical guidelines to include technology appraisal recommendations, enhancing adoption and support of new medicines, and boosting clinical trial infrastructure.

The OLS rep focused on the progress of the investment programme, including work on an agreed set of plans across clinical trials and manufacturing, as well as HTA. Launching these approved plans was the focus back in July, including the memorandum of understandings that are needed and announcements from Ministers on public/private collaboration.

Since then, the VPAG investment fund has been launched. An August announcement set out plans for using the £400 million fund, including 19 new clinical trial hubs across the UK. It’s apparently a big deal if you go by the sheer number of quotes from the great and the good: no less than eight quotes, including from Health Minister Wes Streeting. There was also the now oft-repeated accolade of being a world first from the UK government. Trouble is, the important thing is delivering on the ambitions.

The next operational meeting is in November

The next operational review meeting is due to take place on 25th November. The DHSC committed to contacting members earlier and sharing papers two weeks ahead, something that seems not to have happened for the first meeting in July.