A medicines deal has been struck which will save the NHS £14bn over five years, help cut record waiting lists and provide faster access to cancer drugs and gene therapies, ministers have promised.
The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (Vpag) has been agreed by the Government, NHS England, and the Association of the British Pharmaceutical Industry (ABPI) after months of negotiations.
The agreement will save billions more pounds that can be used to provide the best possible treatment and care for NHS patients, grow the workforce, and cut waiting lists – one of the Prime Minister’s five priorities – according to officials.
All parties have committed to piloting new approaches for paying for ground-breaking advanced therapy medicinal products (ATMPs), such as personalised cancer therapies and life-saving “one-shot” gene therapies, which have been used to treat previously incurable conditions such as sickle cell disease.
Officials said this new approach to ATMPs will build on the NHS track record of using its commercial capabilities to secure cutting-edge treatments for patients and deliver innovative medicines access and uptake programmes.
Earlier this month, NHS England announced that expanding and accelerating uptake of anticoagulant drugs had prevented 4,000 deaths and an estimated 17,000 strokes over the past 18 months.
Drug companies had argued that the life sciences sector and relations between industry and government were being held back by the NHS sales levy on branded medicines under the current scheme, which expires at the end of this year.
The voluntary scheme for branded medicines pricing and access (Vpas) was designed to limit the NHS’s medicine bill and support innovation, but this has soared because of increased demand and backlogs since the pandemic.
The levy has surged from about 5 per cent in 2021 to 15 per cent last year and will hit 26.5 per cent this year, or around £3.3bn. Two large US drug companies, AbbVie and Eli Lilly, quit the scheme this year in protest.
The industry proposed a new agreement, Vpag, which it says would also support clinical research and patient access to new drugs, as well as improve productivity.
The new deal secures savings for the taxpayer-funded health service that are double those under the current medicine pricing agreement, officials said. The level of annual allowed growth in sales of branded medicines will double from 2 per cent in 2024, to 4 per cent by 2027.
The agreement also introduces a new affordability mechanism for older medicines. Older medicines which have not seen price reductions will have to pay a top up rate of up to 25 per cent in addition to the older medicines base rate of 10 per cent. The income from this mechanism will support lower payment rates for more innovative medicines.
An additional £400m of life sciences investment by industry will accelerate work on clinical trials, manufacturing, and in health technology assessments agencies, encouraging UK economic growth, collaboration, and innovation in the sector.
Health and Social Care Secretary Victoria Atkins said: “Millions of NHS patients will benefit from this momentous, UK-wide agreement. Not only will it save the health service billions of pounds every year, it will allow more patients to quickly access the latest life-saving medicines and treatments.
“This deal will also ensure the UK remains a world leader in driving forward innovative healthcare while boosting our economy, with hundreds of millions of pounds invested in vital research, clinical trials and manufacturing.”
Medicines represent the second highest proportion of NHS spend, worth £19.2bn in England in 2022/23. Some £14bn of this was branded, with the industry paying the NHS back £2bn in rebates that year.
This agreement, however, sets a yearly cap on the total allowed sales value of branded medicines to the NHS each year. Sales above the cap are paid back to the Government via a levy.
The head of the ABPI said industry supported the new deal, but described it as “tough”. The group had argued the UK was losing out on its share of global pharmaceutical research and development spending because of the old scheme, with UK industry falling down the global rankings for its share of total levels of investment.
Richard Torbett, chief executive at the ABPI, said: “This is a tough deal which underlines the essential role innovative medicines and vaccines will play in addressing the health challenges of the future.
“The industry supports this agreement, despite its restrictions, as it provides important support for patients and the NHS and commits to giving them access to the transformative treatments they need.
“Allowing the sector to grow faster than it has under the previous scheme should increase the UK’s international competitiveness over time. Importantly, it also recognises the pressing need to invest more in building NHS capacity to partner with industry on science and research to support innovation and economic growth.”
