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1、.Consultation responseDepartment of Health consultation on a new value-based approach to the pricing of branded medicinesMarch 2011Pharmacy Voice response to the Department of Health consultation on a new value-based approach to the pricing of branded medicinesIntroduction There are over 13,000 comm

2、unity pharmacies in the UK, located in neighbourhoods and high streets across the country, supplying over 800 million prescriptions to patients every year. Community pharmacies are located at the critical point at the end of the supply chain, where the medicine is delivered to the patient. The pharm

3、acist combines their scientific knowledge of thousands of medicines with their ability to efficiently handle the supply chain, to deliver a safe and responsive service to patients. In recent years, however, this efficient system has been severely challenged, as a result of a variety of factors. Phar

4、macies are facing unprecedented difficulties in obtaining medicines they need to meet the needs of their patients. Quotas are being applied, by manufacturers and wholesalers, as a blunt instrument and in many cases are delaying supply at a local level. Variations in prescription volumes and local pr

5、escribing factors (such as changes to local formularies) confound manufacturers attempts to predict need accurately.It is demonstrable that changes to the structure of medicines supply are less efficient than previous arrangements, increasing costs and administrative burden, and reducing flexibility

6、 and competition. Discounts that pharmacies receive from wholesalers and manufacturers have decreased, increasing costs for pharmacies. Pharmacists are incentivised to purchase drugs efficiently, and reduced discounts from manufacturers ultimately affect the overall cost of the drugs budget for the

7、tax payer. Restricted supply arrangements from the manufacturers have forced pharmacies to increase the number of wholesalers they deal with, increasing time spent on administration. It is vital that the Government works with pharmacy and other supply chain stakeholders to seek a resolution to these

8、 problems. It is also critical that changes to pricing, as set out in the consultation, do not generate unintended consequences which place more stress on the supply chain.GeneralWe support the broad aims for value-based pricing (VBP) set out in the consultation paper, ie, that it should improve out

9、comes through better access to medicines, stimulate innovation, improve the process for assessing new medicines, include a wide assessment of a medicine beyond simply clinical effectiveness and ensure value for money. The challenge will be to deliver a pricing system that actually delivers these asp

10、irations, and it should not be assumed that value-based pricing will provide cheaper medicines. Pharmaceutical companies set UK-wide prices. This proposal for value-base pricing will have a significant impact on the devolved administrations who run their own health systems and may have different hea

11、lth priorities. They may be constricted by this policy. Consideration must be given to how the views of the devolved nations are incorporated into each decision.Assessment of valueThe price of medicines needs to reflect the investment made by the manufacturer in research and development. As fewer pa

12、tients use products that treat less common diseases, the unit cost of these medicines is naturally higher. We are concerned that a value-based pricing system may have an inherent bias against medicines for less common conditions. Patients with these conditions may not therefore have equal access to

13、medicines.The VBP scheme should adequately reflect the benefits of medicines for children. Using QALYs in isolation could result in under-valuing the benefits of a medicine for a child with a serious condition. This would exacerbate the current situation where many medicines are not licensed for chi

14、ldren and therefore have to be used off license.The consultation envisages that if a drug is launched at a low price due to insufficient evidence of benefit and subsequently is shown to be highly effective and significantly reduce the burden of illness, the price would need to be increased. In this

15、scenario the manufacturer may be reluctant to launch the product in the UK at the initial lower price, as the UK is a reference for other markets around the world. This would reduce access for patients in the UK to innovative treatments.Price setting of medicines in the UK can have an impact around

16、the globe. We would be particularly concerned if VBP disincentivised the development of products for the third world (such as new treatments for malaria) because these products would have a low value in the price index country of the UK.The use of a medicine is the most common therapeutic interventi

17、on made within health services. It would therefore seem inappropriate to determine the value of medicines without reference to the value of other services provided within the NHS. When determining the basic threshold level for medicines under VBP, the value of other interventions should be evaluated

18、 and incorporated into this benchmarking decision. Community pharmacists have a significant role in monitoring and explaining the side effects of medicines to patients and promoting compliance, through services such as the Medicines Use Review. We are concerned that medicines that deliver an increme

19、ntal benefit, such as fewer incidences of side effects, will not be adequately supported through this mechanism. The least cost effective medicine is one that is used improperly or not used at all having been supplied. It is estimated that 30-50% of prescriptions are not taken as the prescriber inte

20、nded. Meanwhile, medicines (including adverse drug reactions, prescribing errors and poor patient adherence) account for up to 6.5% of emergency hospital admissions, with all the attendant costs. VBP must sufficiently value the benefits in terms of clinical outcomes of a treatment that improves pati

21、ent adherence (through fewer side effects or a more convenient dosing regime). Some conditions, for example hypertension, have no obvious burden of illness to the sufferer. A new medicine for hypertension may, on face value, have little to differentiate it from its competitors. If, because of slight

22、ly reduced side effects or improved dosage regime, compliance with it was significantly greater than with existing treatments, long term costs due to a decrease in heart attack or stroke and the associated morbidity would be significantly reduced.VBP would shape the future medicines market, and ther

23、efore decisions pharmaceutical companies take about which products to develop. It is based on health economics which is a developing science, and criteria such as the QALY, where there may be disagreement over interpretation. The Government should proceed carefully with these reforms, and assess the

24、 effect of VBP on the new medicines pipeline, to ensure that faults in the process are not preventing important new products from being developed and confirm that the new system is indeed working in the best interests of the patient.The value of a medicine under VBP should incorporate its ability to

25、 achieve savings across the full health and social care environment. For example, the reduced care costs delivered by a drug for Alzheimers disease should be incorporated into the calculation of value for a new product in this area. However, unless budgets for health and social care are joined-up, G

26、P consortia will be disinclined to pay a higher price for a drug which reduces the burden of social care but impacts heavily on the health budget.In some instances side effects are only identified, or their true impact on patients is only discovered, after a product has been on the market for a peri

27、od. When the side effect profile of a medicine changes significantly after it has come to market, the price may need to be re-evaluated.In the years before VBP is introduced, we believe that new drugs should be evaluated to calculate their price if the new system had already been implemented. This w

28、ill allow a comparison of the companys chosen list price and the VBP price, and would permit an evaluation of the implications of the new pricing system before its formal introduction in 2014.Considerations of burden of disease and innovationThe consultation proposes that the value-based pricing ass

29、essment will incorporate considerations of “burden of illness”. This will introduce highly subjective criteria into the assessment process. Robust procedures will be required to ensure that the views of all in society are equitably represented in defining these criteria. Community pharmacists are th

30、e most accessible healthcare professional and also the medicine experts, and they should be involved in this process (for example by surveying their patients). It should also be recognised that communities across the UK may differ in their views in relation to burden of illness. It will be particula

31、rly challenging to ensure that views in the devolved nations, with independently-run health systems, are suitably incorporated. If companies are allowed to provide the evidence of why their new product should have a higher threshold due to burden of illness, there may be little consistency in assess

32、ments. It would be better for the Government to periodically review the market and determine the clinical areas where a higher burden of illness threshold would be justified. This would have the advantage of prospectively highlighting to companies where the greatest need for new medicines exists. It

33、 will be important to ensure that “unglamorous” conditions such as incontinence are not forgotten in any assessment involving the public of burden of illness. We support the idea that value-based pricing should be used to incentivise innovation by setting a higher threshold for products deemed to be

34、 innovative. The Government should set out prospectively the criteria that will be applied in this assessment and identify priority areas. Multiple pricesThere are significant difficulties in applying different prices to a medicine depending on its indication. Having more than one list price for a p

35、roduct, and requiring a process whereby the purchaser (wholesaler, pharmacy etc.) must confirm the indication for that particular unit would cause huge logistical problems, particularly as product is generally procured before a patient presents a prescription. We believe that such a system would be

36、bureaucratic, costly and probably impossible to operate. In addition, community pharmacies currently lack access to patient records, preventing them from easily determining the indication for a medicine. If the idea of having multiples prices for a product is pursued, we recommend that one list pric

37、e is set, and the organisation funding the medicine (e.g., GP consortia) should have the responsibility to claim a rebate directly from the manufacturer, should a medicine be used for a lower cost indication. This would be a more straightforward, workable and less costly way of operating a system of

38、 multiple prices.Wider affects on the medicines supply chainThe consultation envisages medicine prices change over time, as further information on value becomes available. It should be noted that there are consequences further down the supply chain of price changes. For example, pharmacies may have

39、purchased a product at one price, and then have been reimbursed at a lower price due to a list price change. Pharmacies and wholesalers should be consulted about more detailed proposals for price changes, so that there is an opportunity to develop systems that are fair to all in the supply chain.A c

40、oncern for community pharmacy is that if a manufacturer felt it needed to reduce its list price to a level that would be deemed acceptable under a value-based pricing scheme, it may try to re-coup the loss by reducing its distribution discount. It will be important therefore that a value-based prici

41、ng system can monitor the acquisition cost and intervene if this has been increased to circumvent the list price change. As a result of the Community Pharmacy Contractual Framework, community pharmacy is guaranteed an agreed level of purchase profit, and so reduced discounts would be reimbursed by t

42、he NHS, negating some of the benefit of the reduced price to the tax payer. Medicines are traded across the European Union. The consultation does not address the impact of value-based pricing in the UK on this international medicines market. When a product is priced much lower in one EU country than

43、 another, legitimate cross-border trade occurs and this can result in shortages in the lower-priced country. Shortages create administrative problems for those further down the supply chain, and cause inconvenience and potentially interrupt the treatment of patients.Other issuesA policy of VBP may r

44、esult in a situation where the Government is prepared to reimburse the cost of a drug at one price, but the manufacturer wishes to maintain a higher list price. One theoretical outcome of this scenario could be that the NHS reimburses the VBP price, but someone else, probably the patient, makes a co

45、-payment to meet the manufacturers full price. We believe that the Department of Health and devolved administrations should be clear about whether they are prepared for this situation to occur, and consult patients setting our clearly the implications of the policy. This would deliver a paradigm shi

46、ft in the philosophy of NHS care and would challenge the existing culture in this country in relation to who funds medicines. If it is to happen, we believe that community pharmacists may be required to play a significant role in administering such a system, and explaining its functioning and ration

47、ale to patients, and therefore call for community pharmacy to be fully consulted on such a policy.The consultation suggests that should a medicine be priced above the VBP level, the manufacturer will be expected to explain to the public why it is not available on the NHS. In reality, if this situation occurs, it will be because the resources available to the NHS do not meet w