Bad is never good until worse happens…
  • Posted on: 26/09/2018
  • Category: Thought Leadership

Bad is never good until worse happens…

The outcomes of a Department of Health and Social Care (DHSC), consultation on proposed changes to the statutory scheme for pharmaceutical pricing are anticipated shortly. I wonder if the proposals outlined in this consultation are adding insult to injury for small to medium pharma organisations and represent a step too far.

In an article recently published in PharmaTimes, Chairman of the EMIG, Leslie Galloway, wrote of ‘An industry abandoned’, and described a ‘quadruple whammy’ facing the industry over the coming months.

First, there were the Brexit ‘no deal’ technical notices, which set out the extra hoops that pharmaceutical companies can expect to have to jump through next year to sell their medicines in the UK market; a market that typically comprises only 3% of global sales.

Second, there was the request for companies to stockpile at their own expense six weeks’ supply of medicines to compensate for the government’s own failure to yet reach a deal with the EU. If rumours are correct, this will inflict costs on the industry of £100 million!

Third, Leslie references the proposals to introduce charges from April, sometimes in excess of £250,000, for NICE to review medicines – even though, with the reforms made to NICE, it is now possible that these assessments will result in a ‘no’ even for medicines that are judged to be cost-effective.

And finally, he describes the proposals in the statutory scheme consultation to levy a tax on sales – there is no way of otherwise describing it – of more than 21% a year by 2021: a figure set so high that there is no question that profits will be wiped out across many companies.

While the consultation details seem to have been met with disapproval by the majority of industry associations and stakeholders (as the majority of previous consultation have), I wonder if there is a view in the department that the industry always ‘cries wolf’ and ultimately absorbs any pricing scheme changes?

While I feel that this consultation on statutory pricing is ill-thought out given the wider backdrop of Brexit and the proposed changes to the NICE process, what I fear most is that the uncertainty unleashed from this process will have a significant impact on organisations’ confidence to invest in promoting the value of their products.

Will these change (if implemented), be to the detriment of patients, clinicians, pharma companies and outsource providers alike? Or will they be a catalyst for changing our commercial model? Only time will tell, and it may be worth shoring up commercial plans in the meantime to ensure bad doesn’t turn to worse…..

What implications do you think the statutory scheme payment percentage increases could have, if agreed, on your operating model and your confidence to invest? 

Ryan Wooller, Head of Business Development, Star