How transparent is the VPAS?
The UK’s VPAS – a deal that began on 1st January 2019 and which is due to end on 31st December 2023 – is worth around £7 billion. Yet, that’s arguably the most transparent thing about the deal, which shapes pricing and access to branded medicines in the NHS. Leela Barham takes stock of official reporting around the deal.
The Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) agreement is published in the main agreement and separate Annexes, available from the main website.
An amendment to the current scheme that was agreed between the Department of Health and Social Care (DHSC), NHS England (NHSE), and the industry body, the ABPI, in January 2022 is also publicly available.
These documents are a must-read for companies because they set out the ambitions of both government (as negotiated by the DHSC and NHS England) and industry (as negotiated by the ABPI) for the scheme to deliver for patients, for the government, and industry. Patient groups, too, should be interested given commitments that relate to them; they are also likely the starting point for a new deal, unless a successor will be radically different.
It’s understandable if not everyone has read every page of these documents: the main agreement is 75 pages long and the Annexes 107 pages. Brevity is not the result of what is, in essence, a committee writing the documents.
The main agreement includes technical details, for example, how calculations work to determine the amount of money that member companies have to pay to the DHSC to keep total growth in branded medicines to 2% for the duration of the deal. There are a host of reporting requirements, too, but these are generally requirements set for companies, rather than others.
What isn’t in the public domain is the underlying forecasting model for NHS branded medicines spending. This is used to set expectations on paybacks from companies at the time of negotiations. The model will have been updated over time as companies have submitted sales reports and other data and it is used it to determine paybacks each year. Should it be, though?
There is a strong argument for it because it would allow all those affected to delve into the detail, especially if a successor deal is to be an evolution of the current deal. Yet, there is also a counterargument: government needs the freedom to explore scenarios. Given forecasting is an art, it may prove a distraction if too many piled in with their perspectives. It’s not unreasonable to assume that the ABPI, as the negotiator for the industry, have their own forecasting model and will engage on the detail of the Departments. Assuming ABPI do a good enough job of challenging the forecast, that should be enough.
What could be argued more credibly for a successor, is more transparency on the results of the forecasts, providing the full five years of predicted payment rates at the time of publishing the deal - something that was missing in the 2019 agreement when it was published in 2018. Only some companies likely knew what these rates were forecasted to be in 2021, 2022, and 2023 when deciding whether to join in 2018 or not. It was also available for the predecessor of the 2019 deal, so that level of transparency has been available before.
High-profile reporting on the money
The main webpage for VPAS provides links to reporting by the DHSC on the financial side of the deal.
For companies, knowing the payment percentage is important. This is effectively the marginal sales tax rate that they have to pay against NHS sales. The payment percentage has been routinely reported by the DHSC since 2019. The percentage - and hence the amount due - has not always been published in advance of the year to which it relates; that was the case for 2021 and 2022.
Companies could have known the payment percentage before publication, though; there is a dialogue between the DHSC and the ABPI, particularly when an override of the routine approach to calculating the payment percentage was agreed for 2022.
Only the DHSC and ABPI will know which companies had the inside track, or not, on the final payment percentages. If you are a company without that, however, you would have had to wait to find out what the commercial bottom line is. That could have ticked off a fair few Finance Directors.
The DHSC has provided forecasted rates, too, presumably in a bid to help companies plan, although, in practice these have been both over- and underestimates. It’s only been about right for 2023 (this explains why DHSC says that the scheme is working as it should be, not a view likely to be shared by many in the industry).
Table 1: Forecasted and actual VPAS payment percentages and publication dates
|Forecasted payment percentage||-||14.2%||9.0%||5.8%||26%|
|Date published||-||5th December 2018||December 2019||1st February 2021||20th January 2022|
|Actual payment percentage||9.6%||5.9%||5.1%||15.0%||26.5%|
|Date published||5th December 2018||December 2019||1st February 2021||20th January 2022||15th December 2022|
DHSC. (15th December 2022) The 2019 Voluntary Scheme for Branded Medicines Pricing and Access: Payment Percentage for 2023
DHSC. (20th January 2022) The 2019 Voluntary Scheme for Branded Medicines Pricing and Access: Payment percentage for 2022 Note in this case, the 2022 payment percentage was agreed to be lower than the usual calculations would have produced of 19.1%
DHSC. (2nd February 2021) The 2019 Voluntary Scheme for Branded Medicines Pricing and Access: Payment percentage for 2021 Note in this case, the 2021 payment percentage was updated to 5.1% on 1st February 2021 having been published before with a 6.6% payment percentage. The DHSC corrected growth rates and updated the payment percentage accordingly.
DHSC. (December 2019) The 2019 Voluntary Scheme for Branded Medicines Pricing and Access: Payment Percentage for 2020
DHSC and ABPI. (5th December 2018) The 2019 Voluntary Scheme for Branded Medicines Pricing and Access: Annexes
The payments made by companies have also been regularly reported by DHSC in a collection called Voluntary Scheme quarterly net sales and payment information, available from its own website.
Beyond the headline numbers - and cumulatively they’re big, expected to be £7 billion for the full five years of the deal - these are useful reports because they also provide an overview of the value of sales under VPAS, under the statutory scheme for companies who did not join VPAS, as well as parallel imports. They also do some useful number crunching of these absolute numbers by presenting growth rates across these segments, as well.
What this number crunching shows is just how variable growth has been, which presumably goes a long way to explaining the variation in the forecasted payment rates, too.
Table 2: Sales growth rates
|Scheme element||2019 observed||2020 observed||2021 observed||2022 observed|
|2019 Voluntary Scheme||2.91%||16.01%||9.73%||8.70%|
Source: DHSC. (16th March 2023) Aggregate Net Sales and Payment Information: February 2023
Missing is routine reporting of where the money goes (but you can find out more from Where do VPAS rebates go? which used Freedom of Information requests). In the past, allocations from voluntary scheme receipts across the devolved nations have been published and it’s not clear why this hasn’t been done this time around.
Low-profile reporting on operations
The VPAS relies on a lot of behind-the-scenes work from companies who have to supply data to the DHSC, and for DHSC who run the numbers. VPAS included a commitment to six-monthly operational reviews including the DHSC, NHSE, and the ABPI.
The DHSC has published the minutes from the operational reviews on a collection website, but only since 3rd October 2022. The first meeting minutes cover a meeting on 6th June 2019: that means the DHSC took more than three years to publish them on this website.
ABPI could have cascaded the meeting minutes, so maybe companies have had more timely updates, although, whether that includes non-ABPI member companies or the industry group, BGMA, is not clear. Patient groups, who have become much more vocal on VPAS, probably did not have timely access to see how the scheme was going.
Meeting minutes have been available for much longer, but tucked away on a Kahootz website. Kahootz is self-described as a “secure collaboration in the cloud”. Hardly easily accessible. (This author only knows about this via a freedom of information response from the DHSC in the past).
The VPAS is not just about the money. There is much more to the deal with a whole Chapter dedicated to Access, Uptake, and Outcomes. The operational review meeting minutes refer to metrics and include the option for requests for copies of metrics slide packs to be made to DHSC.
Making people request metrics reporting is not making it as easy as it could be. But they are available via the Kahootz website, with four reports available dated July 2020, January 2021, June 2021, and September 2022. That means that they haven’t been made available on a six-monthly basis, as suggested would be the case by DHSC.
The most recent metrics report from September 2022 offers a fact that doesn’t seem to be widely reported, stating that “There has been a slight decrease in the number of new product launches in Q1-Q2 2022, compared to Q1-Q2 2021 (56 v 54 respectively). When looking at NAS specifically over the same period, there was a slight increase, as in Q1-Q2 2021 there were 22 NAS price applications, whereas in Q1-Q2 2022 there were 25.” A fall in new launches is hard to see as good news.
Ad hoc publications
The DHSC has also provided ad hoc publications relevant to the scheme. A blog published on 28th March 2023 set out questions and answers. Readers can determine for themselves if it’s spin and whether the questions posed are answered.
The blog states “Industry data shows there are five treatments available in England for every four in Europe, as well as almost a third more cancer drugs.” There’s no reference, link back, or hint of where this comes from, so hard to verify. Lots of other facts and figures have the same problem.
The blog doesn’t reference the NHS England commissioned work to measure whether the goal of reaching the upper quartile of uptake (in relation to comparator countries) for the five highest health gain categories during the first half of the Voluntary Scheme was met. Could it be because it wasn’t met in two of the four that could be measured?
Neat, and demonstrating the trap of being too positive about the deal in the past, it also quotes back the ABPI who had said the deal was a “pro-innovation deal”. (The ABPI has revamped their website on VPAS, so that wording seems to no longer be on their website, a little revision of history going on and more than a little distancing themselves from a scheme that they agreed to.)
The ABPI has been far less positive about the deal as companies have had to pay back more and more and more to DHSC. To illustrate the point, the ABPI said on 28th March 2023 that the current VPAS is undermining life sciences competitiveness.
The DHSC also issued a press release on 24th April 2023 that talked about the current deal as a world-leading pricing scheme. It suggests that the deal has delivered more world-leading activity, including the roll-out of cystic fibrosis triple therapy, first-in-Europe patient access for several new drugs, and deals for treatments, as well as allowing continued progress to make England the first country to eliminate hepatitis C, fund over 100 cancer drugs in the Cancer Drugs Fund, and provide a subscription-style payment model for antibiotics.
Trouble is ‘world-leading’ – without evidence to back it up – is in the eye of the beholder and it’s not evident that any of these ‘benefits’ needed the scheme to be delivered. If anything, companies having to pay back billions could well put the brakes on achieving more world firsts in the future (and it would be a relief if comms could drop the obsession with the UK being world-leading; just saying it does not make it so).
The quote from Minister Will Quince that the deal has “ensure[d] the UK life sciences industry can earn the money it needs to fund research and development into new and improved medicine” likely grated with industry. It’s not hard to imagine that the industry could say that they could have done more R&D had they got to keep their £7 billion, even if not all of that would have gone into R&D.
Calls for more transparency
Calls for more transparency have been made in the past, but more recently, patient groups have chimed in. Three umbrella groups - CMAC, Cancer52, and the BCA, who together represent nearly 200 patient charities - issued a statement that said, “The current VPAS is an opaque process, with limited information available on the month-to-month status of payment and where they go, and no accountability on how successful the scheme is in achieving its aim of improving access to innovative treatments.” They have called for an annual ministerial statement to parliament on the VPAS, as well as scrutiny from the House of Commons Health Select Committee.
Patient groups are not alone. The All-Party Parliamentary Group (APPG) on Access to Medicines and Medical Devices has made suggestions for a successor to VPAS, which includes the call for “transparency and reporting requirements with appropriate KPIs” in their report, The Medicines Pricing Challenge, released in May. APPGs are informal cross-party groups although they can secure debates where Ministers have to respond. The Access to Medicines and Medical Devices APPG secured a debate on VPAS and the Life Sciences Vision on 3rd May with Will Quince, Minister of State at the DHSC, in attendance.
Predecessor schemes used to have an annual report to parliament – last published in April 2014 - so there is a precedent. Will the government rise to that challenge to provide more transparency for a future deal?