UK government hires ex-pharma chief to lead pricing talks with industry
The Department of Health has appointed a former UK head of Sanofi and Teva to be its chief commercial officer, with responsibility for negotiating a new pricing deal top of his priorities.
Steve Oldfield will take up this newly-created position in October, and will lead talks with the industry association the ABPI on the PPRS, the key pricing agreement between pharma and the NHS.
The new position is very much a break with tradition, as such senior roles have been filled by civil servants in the past.
But the Department of Health (DH) has lost a great deal of its in-house expertise over the last few years, seeing its headcount slashed thanks to Whitehall spending cuts. It has also just seen the Commercial Medicines Unit (CMU) transferred to NHS England, which is increasingly cutting its own pricing deals direct with pharma.
But the DH still retains responsibility for negotiating the PPRS for the whole of the UK, which covers around £8 billion a year in medicines spending.
The current PPRS agreement is due to expire in December 2018, and both sides are keen to start talking about what should replace it. NHS England and the ABPI are both keen to see more outcomes-based pricing deals, but the current PPRS and limitations on NHS data make this difficult to extend to all medicines.
The NHS is also under extreme budget pressure, and the DH and NHS England want to keep a tight grip on medicines expenditure, especially in the face of a boom in highly specialised, high cost new drugs coming to market.
All this means that the DH needs someone with a deep understanding of medicines pricing to get the best deal from pharma.
Oldfield will be joining the Government Commercial Function and his initial focus will be to create and develop a commercial strategy, which the DH says will ‘underpin upcoming negotiations with a variety of commercial suppliers, including key engagements with the pharmaceutical industry in particular on the PPRS scheme’.
Currently chief operating officer for PGT (the consumer health joint venture between Procter & Gamble and Teva) based in Geneva, Steve Oldfield has more than 25 years of experience in pharma.
In addition to his UK leadership roles at Sanofi and Teva, he has also held senior positions in Asia and Latin America. He has been involved in industry-government initiatives over the years, having served on the ABPI’s board and co-chaired committees looking at the introduction and adoption of new medicines.
Steve Oldfield commented: “I am delighted to be joining the Department of Health, especially at such an exciting time. Demands on the health system have never been greater, and I hope to be able to bring my previous commercial experience to bear on the activities of the department.”
He added, “In particular, I look forward to working collaboratively across the department, the NHS and the life sciences to find new ways of working for the benefit of patients and the health economy.”
The appointment looks to be very much in the mould of ‘poacher turned gamekeeper’, in that Oldfield will have first-hand insights into pharma’s business models, and will use this to drive the best possible deal for the government.
At the same time, his ‘pharma insider’ status can also be seen as a sign of trust between the DH and the industry, demonstrating a desired wish to support the life sciences sector.
This is particularly vital at the moment, as Brexit and the threat of an economic slowdown in the UK are threatening the future of the industry here, as well as the NHS’ ability to pay for new medicines.
The ABPI was quick to welcome the appointment, its chief executive Mike Thompson saying Oldfield would provide it with ‘valuable expertise’.
Mike Thompson added: “I’m confident that this appointment will also positively impact our ability to have open and transparent negotiations with Government and find win-win solutions in which everyone can have confidence.”
Feelings are running high in the industry about an ongoing squeeze on prices, however. The ABPI recently revealed it is seeking a judicial review of the new NICE and NHS England budget impact test, a new mechanism which could be used to delay and limit uptake of new medicines.
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