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

Dr Sarah Wollaston MP, Chairman, Health Select Committee


Pricing medicines Fringe Event CPC 2010

Oct 04. till Oct 04.

Pricing medicines: Can we deliver value to patients and industry?

This event was chaired by Julia Manning, 2020health.

October 4, 20102010-10-04T07:30:00 - October 4, 2010 2010-10-04T09:00:00
7:30 PM 2010-10-04T07:30:00 - 9:00 PM 2010-10-04T09:00:00
ICC Marquee 6

Conservative Party Conference 2010

Earl Howe and Julia Manning
Earl Howe and Julia Manning


Julia Manning, Chief Executive, 2020health

Earl Howe, Parliamentary Under Secretary of State for Health

Dr Panos Kanavos, Senior Lecturer, London School of Economics

Richard Ashcroft, Corporate Affairs Director, Lilly

Hilary Tovey, Policy Manager, Cancer Research UK

  • Need a clear system which is transparent and fair
  • Need a broad definition of ‘value’ to incorporate all societal aspects
  • Need a system that favours true innovation
  • Need to recognize that without improved coverage and uptake, future development and trials in the UK are jeopardized

As we move from a PPRS arrangement to a new agreement in 2014 under value-based pricing, it was discussed what we want to achieve from a value-based pricing agreement.

Two main problems with the current PPRS arrangement were highlighted in the discussion. These are around the freedom of pricing of new drugs, which can put the NHS in the difficult position of either having to pay high prices that are not always justified by the benefits of a new drug; or else having to restrict access. Also, the current PPRS system does not promote true innovation; It encourages spend on R&D but not necessarily R&D that is truly innovative. A lot of what are called ‘me-too’ drugs come out of this rather than breakthrough drugs that address areas of significant unmet need.

There are several critical success factors for the new value-based pricing arrangement.

We must concentrate on:

  1. Patient focus, ensuring best outcomes for patients;
  2. Improving access and uptake – access to new drugs in the UK is often lower than in many other countries. This also has a crucial knock on effect on clinical trials;
  3. Clinical trials which are undertaken against the current gold standard of medication. If that gold standard has not been adopted in the UK, the trials cannot be undertaken here;
  4. Value for money - Value must be broadly defined;
  5. Ensuring appropriate rewards are in place for industry, given the importance to Britain’s economy;
  6. Promoting innovation;
  7. Transparency of system – a system must be agreed between industry and government that is transparent and fair.

The way in which value-based pricing is implemented is quite varied across Europe. We need to address the questions around the different methodologies for implementation. We need to ensure that the pricing assessment is predictable so that companies can plan and prioritise work on that basis. In particular we need to be clear what kind of value we mean when we talk about value-based pricing.

The balance of different factors in creating a value was a key area of discussion. We need to consider the value to patients, value to society, and value that flows from innovation. To understand what is meant by the value for society a discussion will be needed between the departments for employment, health, and business. To a certain extent this is the approach which has been followed in Sweden. We need to ensure that a new system of value-based pricing favours innovation.

Assessment of value does not necessarily reward innovation. We need to encourage technology transfer from university research laboratories so that more knowledge can be shared and capitalised upon.

Value-based pricing should empower doctors to be able to make treatment decisions and prescribe the appropriate drugs, allowing quick access to drugs for patients.

The challenge is for a new pricing mechanism to ensure access for patients (health policy) and reward for innovation (industrial policy)?

Sponsored by

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

Implementing value-based pricing for pharmaceuticals in the UK

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. read on Implementing value-based pricing for pharmaceuticals in the UK

2020health at CPC2010 (PDF, 1449 KB)

2020health at CPC2010

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