UK's 2024 Voluntary Scheme for Branded Medicines Faces Early Challenges and Delays

The newly implemented 2024 Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG) in the UK is under review after its first six months, revealing both progress and challenges in achieving its core objectives. The scheme, designed to ensure a financially sustainable NHS, promote better patient outcomes, and support UK economic growth, has faced complexities in its initial implementation.

Affordability Mechanism Faces Hurdles

A key feature of the 2024 VPAG is the introduction of differentiated payment rates for older and newer branded medicines. While newer product payment rates are capped based on growth, determining payment rates for older medicines involves assessing price changes against a historic reference price, identified as close to loss of UK market exclusivity. This process has proven complex and time-consuming for the Department of Health and Social Care (DHSC) and NHS England (NHSE).

According to the Association of the British Pharmaceutical Industry (ABPI), the identification of reference prices has been a "huge and complex exercise," leading to delays and requiring companies to allocate additional resources for data verification. Early reports suggest that the viability of some medicines may be under review due to the 'older medicine' payment rates, potentially leading to market withdrawals or price increases. Concerns have also been raised about potential negative impacts on upcoming launches of innovative treatments if they are classified as 'older' medicines.

Exceptional Circumstances Clause

The VPAG includes an 'exceptional circumstances' clause (6.26) that allows companies to seek price adjustments or payment rate reductions in cases of supply challenges or unviable products. The ABPI is advocating for improved transparency and effectiveness in these processes, including simplified procedures and the utilization of payment rate reductions as a viable option.

Focus on Patient Outcomes and Access to Innovation

Despite the challenges, the industry has acknowledged proactive management of the 'Chapter 3' elements of the VPAG, which aim to improve the adoption and uptake of innovative medicines. Consultations have been launched regarding NICE’s Commercial Framework and NHSE’s Budget Impact Test. The first innovative payment model pilot was announced earlier this year, demonstrating the scheme's potential to support access to cutting-edge innovation. NHS England will also amend job descriptions to promote the use of cost-effective innovative medicines, aiming to reduce health inequalities.

Investment in UK Life Sciences

A significant aspect of the 2024 VPAG is the industry's financial contribution to an investment fund designed to accelerate patient access to new treatments, strengthen clinical trials, and enhance medicines manufacturing in the UK. This investment program was launched in August with £400 million secured, and stakeholders are focused on maximizing its impact through robust measurement of outcomes.

Monitoring Scheme Performance

The ABPI emphasizes the importance of a shared understanding of the scheme's performance, including its intended and unintended impacts. While the DHSC has focused on reference price data, the ABPI is advocating for a complete set of metrics to be in place by the next operational review. The government and industry must continue to collaborate to fully assess the new scheme's impacts.