Monday, October 07, 2013

Value Based Pricing knocked back

Value-Based Pricing will be delayed until next September as both government and pharma struggle to make the plans work in their current form.

The VBP system, which is set to replace the 55-year old PPRS scheme, was due to be implemented in January next year but it has now emerged that a final plan will not be published until September, and may be closer to the current system than originally intended by the government.

To plug the gap, an interim system will be introduced in January but details of how it will work are not yet known. The plans are, however, due to be outlined and approved at NICE’s board meeting next month.

A spokesman for the institute told HSJ: “As January 2014 is the implementation date of value-based pricing set by the Department of Health, NICE has indicated that an interim process and methods statement for value based pricing needs to be in place from 1 January 2014.

“The final [process guide for VBP] is expected to be published in September 2014.”  The watchdog added that it will launch a three-month consultation in January to ‘help shape’ the full system.

Ironically, NICE was set to be axed under the new VBP plans, but healthcare professionals balked at the government’s attempts to neuter the watchdog, and NICE was re-instated as the main body to make ‘yes’ or ‘no’ funding decisions in 2011.

A delay to the plans has been widely expected by analysts and those in the industry as details remain scarce about just how it will work, despite ostensibly coming into place in the next three months.

Less appetite for new plans

The idea of VBP is the brain-child of former coalition health secretary Andrew Lansley, whose ideas for VBP would see drugs priced by government on new definitions of value, including tying its cost to the ‘wider societal benefit’ it can produce, as well as three other main criteria.

But after a chaotic and poorly communicated attempt to reform the NHS in 2010 and 2011, Lansley was axed a little over a year ago, replaced by Jeremy Hunt, a man with almost no NHS or pharma experience.

This has seemingly given the ABPI the upper hand in its negotiations with the government over what VBP will look like, given that Hunt is not the ideologue Lansley was, and will have little appetite to fight for a complex and unpopular scheme that the public has little knowledge of.

The ABPI has long argued that VBP should become a more gradual process and be ‘wedded’ to the PPRS scheme, which is voluntary and allows pharma to price its own medicines, but at a profit cap of just fewer than 30 per cent.

One senior industry source told HSJ that the emerging plans fell ‘a long way short’ of the original vision Lansley had outlined, adding that the end product would be a ‘damp squib’.

By Ben Adams

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