Department of Health releases consultation on value-based pricing
The consultation on value based pricing has now been launched.
The consultation document is available here: http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/documents/digitalasset/dh_122793.pdf
As set out in the coalition agreement 1 the Government intends to introduce a new system of value-based pricing by reforming arrangements for the pricing of branded medicines. The Government intends to move to this system when the current Pharmaceutical Price Regulation Scheme (PPRS) expires at the end of 2013. The document states that while initiatives like Patient Access Schemes and the Cancer Drugs Fund are helping to make more drugs that can benefit NHS patients available, they are not long-term solutions – it notes that the cumulative administrative burden falling on front-line NHS staff from Patient Access Schemes must be managed.
The intention is that branded medicines that are on the market prior to 1 January 2014 would be covered by new arrangements sitting alongside value-based pricing.
Under the new system of value-based pricing, the Government would apply weightings to the benefits provided by new medicines, which would imply a range of price thresholds reflecting the maximum they are prepared to pay for medicines. These thresholds or maximum prices would be explicitly adjusted to reflect a broader range of relevant factors. The Government proposes that the price threshold structure is determined as follows:
- there would be a basic threshold, reflecting the benefits displaced elsewhere in the NHS when funds are allocated to new medicines
- there would be higher thresholds for medicines that tackle diseases where there is greater “burden of illness”: the more the medicine is focused on diseases with unmet need or which are particularly severe, the higher the threshold
- there would be higher thresholds for medicines that can demonstrate greater therapeutic innovation and improvements compared with other products
- there would be higher thresholds for medicines that can demonstrate wider societal benefits
NICE’s role will increasingly focus on giving authoritative advice to clinicians on when and how the most effective treatments can best be used and on the development of quality standards which set out the standards the NHS should aim for in the treatment of certain conditions. The assessment of relative clinical and cost effectiveness of treatment options will play a continuing part in the development of NICE clinical guidelines.
Questions covered in the consultation include:
- Should value-based pricing apply to any medicines that are already on the UK market before 1 January 2014? If yes, should this be determined on a individual basis, or are there particular groups of drugs which might be considered?
- Do you agree that we should be willing to pay more for medicines in therapeutic areas with the highest unmet needs, and so pay less for medicines which treat diseases that are less severe and / or where other treatments are already available?
- How should we approach the issue of a single drug which delivers significantly different benefits in different indications?
- Do you agree that – compared to the current situation – we should be willing to pay an extra premium to incentivise the development of innovative medicines that deliver step changes in benefits to patients but pay less for less innovative drugs?
- What measure should we use to define the weightings? Options might include using the existing Quality Adjusted Life Years (QALY) measure, patient experience and expert opinions or some combination of these.
The deadline for the consultation is 17 March 2011.
