Report says AZ's UK plant decision is not just about funding

It's been reported that the UK government made an offer of £78 million in funding for AstraZeneca's now-abandoned £450 million vaccine facility in Liverpool, but that was not enough to keep the project afloat.
The Financial Times has said that tense negotiations took place between the government and the pharma giant took place last week, with a number of issues discussed unrelated to the funding, according to "people briefed on the matter."
That includes the recent decision to reject NHS use of AZ and Daiichi Sankyo's Enhertu (trastuzumab deruxtecan) for HER2-low breast cancer and the high rebates that have to be paid by pharma manufacturers under the controversial Voluntary scheme for branded medicines Pricing, Access, and Growth (VPAG).
The report ties in with AZ's statement last week that "several factors have influenced this decision, including the timing and reduction of the final offer compared to the previous government’s proposal."
If the numbers are correct, it suggests that the offer put on the table by Chancellor Rachel Reeves is twice what had previously been reported by the media, and pretty close to the £90 million offered by former Conservative Chancellor Jeremy Hunt, which was made up of £70 million in grants and £20 million in R&D support from the UK Health Security Agency (UKHSA).
The Treasury has said that "a change in the makeup of the investment originally proposed by AstraZeneca" was behind its decision, adding: "All government grant funding has to demonstrate value for the taxpayer and unfortunately, despite extensive work from government officials, it has not been possible to achieve a solution."
According to the people cited by the FT, one of the reasons for the reduced offer was that the government felt that AZ had reduced the level of its investment at the Speke site where the new facility was to be located, and had trimmed down its support as a result.
Regardless, the case highlights frictions between the UK government and the pharma industry at a time when there is a push for national economic growth – with the life sciences industry central to that objective.
NICE recently changed the criteria it uses to carry out cost-effectiveness assessments for new medicines, introducing a new disease severity modifier that is thought to have played a part in some therapies, including Enhertu, being rejected for use by the NHS, although the agency claims it is leading to more positive recommendations.
The VPAG. meanwhile. was initially welcomed by the pharma industry as a way to limit skyrocketing rebate rates during and after COVID-19, but that proved to be short-lived.
A reduction in rate to around 15% from recent highs of 20% or more was expected, but ballooned to 22.9% this year, which the Association of the British Pharmaceutical Industry (ABPI) has said will mean companies will have to return £3.4 billion to the Treasury.