Manufacturing Biz #2 - Magazine - Page 9
Government sends mixed message
to global life science investors
T
he government has published new
terms for the Statutory Scheme for
branded medicines, maintaining
sales rebates at levels which have damaged
the UK’s international standing with global
life science companies asccpording to the
Association of the British Pharmaceutical
Industry (ABPI).
The announcement follows the agreement
in mid-November of a new Voluntary
Scheme for Pricing, Access and Growth
(VPAG), a negotiated alternative scheme
which companies can opt into over the
Statutory Scheme.
Under the new Statutory Scheme,
companies will pay a rebate on the sales of
branded medicines to the NHS of 21.9% in
2024, 24.0% in 2025 and 26.8% in 2026.
proposals in the Statutory Scheme, the
‘Life Cycle Adjustment,’ which was widely
seen by industry as unworkable and likely
to result in low-margin branded medicines
being withdrawn from the UK market.
Instead, the government will consult again
to ensure arrangements for ‘younger’ and
‘older’ medicines in the Statutory Scheme
more closely align to the newly agreed
Voluntary Scheme, maintaining broad
commercial equivalence between the two.
Richard Torbett, Chief Executive of the
ABPI said: “This announcement sends
a very confusing message to global life
science investors. The new Voluntary
Scheme agreement shows that the
government realises that capping the
UK medicines market below its natural
growth is unsustainable – yet this Statutory
Scheme continues to do so, resulting in
damaging headline rebate rates which
undermine the UK in the eyes of investors.
The government has consistently said
it wants to support the international
competitiveness of UK-based life sciences.
To really make a difference, they should
use next year’s consultation to unlock the
constraints on growth which are impeding
inward investment.”
Manufacturers of branded medicines
are required to join either the Voluntary
Scheme or else be in the Statutory
Scheme, and must have chosen which
to be a member of for the following year
before the end of December 2023.
While the published rates are down on the
record 27.5% rebate in 2023, they remain
well above the historical average of 10.6%
before this year.
The UK’s statutory rebate rate is
significantly higher than other similar
mechanisms operated by other countries
- for example, 12 per cent in Germany (and
under review for future years), 7.5 per cent
in Spain and 8.25 per cent in Ireland.
Despite unprecedented levels of objections
to the consultation, with an overwhelming
majority of the 97 responses rejecting
the plans, the government has largely
decided to press ahead with plans industry
leaders have warned are likely to be highly
damaging to UK life sciences and NHS
patients’ access to medicines.
However, the government has decided not
to implement one of the most controversial
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