Download PPRS and medicines spend in the UK

PPRS and medicines spend in the UK
29 January 2016
David Watson | Director Pricing & Reimbursement
Healthcare funding challenges
The system we operate in
Medicines uptake
Affordability
Pricing and the PPRS
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Government – NHS commitment
Manifesto commitments
 Reduce government spending by 1% each year in real terms for
the first two full financial years with £30 billon further in fiscal
consolidation, including £12 billion in welfare savings
 Increase spending on the NHS by an extra £8 billion by 2020
 Run a budget surplus by 2018-2019.
 Invest £6.9 billion in the UK’s research infrastructure up to 2021.
 Cancer Drugs Fund: the Conservative manifesto committed to
‘continue to invest in our lifesaving Cancer Drugs Fund.’
UK healthcare environment
Healthcare spending has been ‘ring fenced’ by Government with a
commitment to add £8 billion extra funding, but this still requires the NHS
to make efficiency savings
Budget gap
- £21 billion
- £16 billion
£0
0.8% efficiency
1.5% efficiency
2-3% efficiency
Flat budget
Flat budget
+£8 billion
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4 systems
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NHS and NICE independence
Monitor Care
Quality
Commissioning
etc
Department of Health
The Mandate
£101 Billion
Providers
Purchasers
NHS England
4 Regional teams
NICE
Public Health
England
Healthwatch
England
Direct
Commissioning
£69 Billion
• Specialised
services £14B
• Primary Care
• Prison, etc.
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Clinical
Commissioning
Groups
(CCGs)
Health and
Wellbeing Boards
Better care Fund
Integrated Personal
Commissioning
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Local Authorities
Local
Healthwatch
Joint strategic
need assessments
Providers
Hospitals
GPs
Community
Ambulance
Mental
Health
NHS partnership
‘NHS leadership’ shared document: articulates
the need for change, describes the vision and
the journey to get there
Addresses three gaps:
1. The health and wellbeing gap
2. The care and quality gap
3. The funding and efficiency gap
Major shift towards prevention to manage
demand
Major shift in models of care/organisational
forms
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Healthcare environment:
changes and challenges
Access to
diagnostics /
genetic tests
Access to
innovative
medicines
Financial
pressures
Local authority
responsibility for
public health
Demographic
changes
Quality and
variation
Interoperable
electronic
health records
Integration of
health and
social care
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Medicines spend, investment?
Medicines expenditure as a % of GDP (2014)
United Kingdom 1%
Japan
1.9%
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UK / all country uptake per head
NICE RECOMMENDED medicines
Note: there are two significant outliers in this group of NICE recommended medicines. This leads
to the relative uptake scale being much higher than in the non-NICE reviewed graph.
AAR interim report – key areas
Delivering Change
Supporting all
innovators
Putting the patient
centre stage
Focus on an
increasingly
empowered
population of patients
and the need for
better developed
system architecture
to allow them to
become more active
participants
Getting ahead of
the curve
Focus on the
importance of making
the UK a ‘go to’ place
for pharma and tech
companies
Focus on
“mainstream”
products that need
licensing &
evaluation at a
national level, but
don’t fall under the
managed access
pathway, being given
better support in
navigating the system
Galvanising the
NHS
Focus on
incentivising adoption
& implementation of
innovation with
vanguards & test
beds taking on a
leadership role and
teaching hospitals
acting as champions
of innovation
A focus on
developing the
network of Academic
Health Science
Networks to facilitate
a network of
Innovation
Exchanges; a real
and virtual forum in
each area to ensure
the patient voice is
heard and provide
support for
innovators to
promote, test and
launch their products.
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2014 PPRS Context
At the time of negotiation of PPRS, both sides recognised the challenge
Tough environment
UK austerity, debt and
rising healthcare costs
Low and slow uptake of
newer medicines.
Lowest prices in Europe
Importance of life
sciences industry and
R&D to the UK economy
Stability required for the
longer term for both
industry and Government
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Starting point and what we agreed
Starting point
•
Aggressive austerity
programme
•
Double digit price cuts
•
Lowering of the NICE
threshold
•
Mechanistic version of
value-based pricing for all
new medicines
•
Weak recognition on the
need to improve
innovative medicines use
in the NHS.
2014 PPRS
•
Payments by industry
back to DH
•
No price cuts
•
Growth in the medicines
bill (with exclusions)
underwritten by industry at
agreed rates
•
Maintain free pricing at
launch
•
NICE will not determine
prices or lower threshold
•
Commitments on uptake
including medicines
optimisation programme
PPRS: payment mechanism
The deal
0%
0%
1.8%
Estimate: circa
1.8%
£3bn
paid by industry
scheme members to DH
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PPRS versus the Statutory Scheme
Branded Medicines
PPRS
Statutory Scheme
Voluntary
Set by Government
Negotiated
under consultation
5 year scheme
Variable usually 1 year
Profit control across portfolio
Straight list price cut (15%) in 2014
A further 10% is possible in 2015
PPRS payments under-write
medicines spend growth
No further payment regardless of growth
85% of branded medicines included
15% of branded medicines
Currently under consultation
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Little headroom from generics use?
ABPI focus
•
Accelerated Access Review implementation
•
Promote improved access and uptake of innovative medicines
•
Delivery of commitments in PPRS to improve access and uptake
•
Discussions on CDF reform
•
Engage constructively with NHS at national and local level on issues
•
Ensure UK is competitive vs other countries on use of innovative medicines
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[email protected]
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