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“2020health is an important and thoughtful contributor to the health debate”

Dr Sarah Wollaston MP, Chairman, Health Select Committee


2020health Report Implementing value-based pricing for pharmaceuticals in the UK

  • 01.06.2010
  • Panos Kanavos, Julia Manning

This report, in partnership with the LSE, explores value-based pricing as a new strategy for the pricing of pharmaceuticals. It details issues that need to be addressed for the new system to be effective and greater reflects the value to patients, carers, society and the economy of some new drugs which deliver health benefits that exceed NHS predictions.


  • Abandoning the current agreement between the NHS and pharmaceutical sector would have adverse effects.
  • If a new agreement is drawn up between government and industry it should build positively on the spirit in UK pharmaceutical policy
  • We need to think more about affordability, other health benefits of medicines, and meeting humanely the needs of people who can reasonably be regarded as ‘exceptional cases’
  • The QALY threshold of £20-30,000 may need to be raised for areas of high unmet clinical need (e.g. cancer) and reduced for low areas of unmet clinical need
  • Varying medicine prices might in some cases raise the price paid by the NHS. It is in the public interest t ensure that high-risk research takes place but equally that industry is reassured that it is worth taking risks with new research.
  • A new system would require greater cooperation between NICE in England, SMC in Scotland, and AWMSG in Wales.
  • To further attract investment in areas of high unmet medical need (i.e. rare diseases) market exclusivity periods should be redefined and extended.
  • There should be more Patient access schemes (PAS) or risk-sharing agreements in order not to de-incentivise innovators.
  • Set up an ‘innovation commission’ to ensure incentives are provided for new R&D. This sort of body can invest in new scientists, assist in the diffusion of new treatments in the NHS and continue to form a bridge between research and commercialisation.


• This document was the most comprehensive piece written at the time on the VBP policy, and informed thinking and consultations on the proposals.