Where should VPAS rebates go?
As a successor to the 2019 Voluntary Scheme for Branded Medicines Access and Pricing is being negotiated, Leela Barham asks where rebates should go in future - that is, if rebates remain at the heart of a future scheme, learning from the first in this two-part series, that looked at where VPAS rebates have gone.
VPAS rebates worth over £7 billion
The industry association, the ABPI, has estimated that the VPAS deal, due to end in December this year, will see companies paying back to the government over £7 billion over the lifetime of the scheme. The scheme itself is silent on where the rebates should go.
Lack of transparency is an ongoing issue
Whilst the question may have become a more burning one in recent months – billions tend to focus minds – the same question about where the rebates go also applied to the predecessor to VPAS, the 2014 Pharmaceutical Price Regulation Scheme (PPRS).
That means that it was a known issue as the ABPI and the government went into negotiations for the 2019 VPAS. It seems that, next time around, it’s an issue that the industry wants to solve, at least partially.
New ideas on how to use industry paybacks
Formal negotiations on a successor to the 2019 VPAS have probably already started as April has now begun. Tackling where the money goes – whilst arguably not as pressing as just how much the industry will pay if rebates feature again – is a key question, should a similar capped deal be agreed upon. That probably explains why proposals are starting to emerge on how to use the money in the future.
High Impact Drugs Fund
One idea has been put forward by Andrew Dillon, former chief executive at NICE, to use some of the rebates for a ‘High Impact Drugs Fund’. It could pay for medicines that are clinically and cost-effective, but also that meet other criteria, such as the extent and nature of unmet needs they address, impact on the NHS, or wider economic benefits and their environmental footprint.
That fund could complement both the cancer drugs fund (CDF) and the innovative medicines fund (IMF), used for cancer and non-cancer drugs, respectively, when they have the potential to be cost-effective, but there are uncertainties that further evidence generation would shed light on. Although the IMF has not yet been used.
Precedent in Scotland
There is, sort of, precedent about this, as Scotland uses VPAS rebates to fund their New Medicines Fund. It does provide a clear link to managing drug expenditure, at least when it comes to new medicines, clarity that is missing in other parts of the UK.
VPAG proposals
The ABPI has suggested that, amongst a host of other proposals outlined in their ideas for a Voluntary Scheme for Pricing, Access, and Growth (VPAG), the industry provides an investment facility. The investment facility would be worth over £1 billion from 2024 to 2028, generated by a 1.5% premium on NHS sales over and above a fixed payment rate. This is just top slicing and having a hypothecated fund.
The investment facility, under ABPI plans, would be used to boost NHS clinical trial capacity and delivery, expand UK Genomics capacity, and build UK capacity to use real-world data to speed, diversify, and make clinical trial recruitment more efficient. Not only that, but it could also fund a Medicines Equity Partnership across the four nations to tackle barriers to the timely uptake of new medicines approved via the UK’s health HTA agencies.
That sounds like spreading £1 billion very thinly. That’s because if it’s one billion over five years, it’s £200 million a year, and that spread across four activities gives each one – assuming an equal share – £50 million each. That’s not much when set against the grand objectives; even less when set against inflation.
Currently, none of the four nations uses VPAS rebates to deal with local uptake barriers, so this element of the VPAG proposals would be new and, maybe, have a better chance of focusing on access. It’s access that matters to many patients, or at least, it’s what we see their patient organisations lobbying about.
Incentives for the local NHS?
Yet, both of these proposals on how to use future rebates do little to tackle the ‘local’ incentives to rapid access to clinically and cost-effective new medicines. As Paul Blakeley, life sciences policy lead at the Tony Blair Institute for Global Change, put it, there is a need for “targeted incentives to reward both the companies that are developing effective innovations and those in the NHS who are making use of them.” Easy to say, but hard to do. But is this something for the negotiators to aim for?
