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Deepak Khanna: the legacy of an outgoing ABPI president

Published on 31/03/14 at 08:18am

You’d be forgiven for thinking that Deepak Khanna, the man who has overseen the activities of the ABPI for the past two years, has regrets about taking on his role. But in his final interview with Pharmafile before a new president takes over on 10 April, Khanna says he would certainly not change his decision to accept the nomination for the position.

That does not mean, however, that it hasn’t been a tough two years. “When I look back, it was a very challenging time for the UK,” he reveals, adding that he had to lead the industry through an “unprecedented time of transformation and change”. 

If you step back to April 2012 when Khanna was first appointed, you’ll find he came in just as the Health and Social Care Act was passed - forever changing the look of the NHS - hilst simultaneously engaging with the spectre of Value-Based Pricing (VBP), which was threatening to do the same to Britain’s drug pricing policy.

On top of this, there were also greater burdens in terms of the austerity measures within the NHS, coupled with the increasing pressure for the industry to demonstrate the value of its innovation.

“So for me,” Khanna says, “the strategic focus during my presidency was first to support the ABPI to be a dynamic, proactive industry association that can represent our broad membership base, but also make sure that our members had a very proactive voice on these critical and important issues.” 

And being proactive has been key: in the past the ABPI has often kept quiet over issues, putting out fires wherever they arose and then slinking back. But under the leadership of Khanna and the ‘passionate’ chief executive Stephen Whitehead - who arrived a year before Khanna - the Association has become more willing to wade in on the big issues, whilst also being less evasive. 

This was evident when, speaking at Khanna’s first annual ABPI conference in April 2012, Whitehead stood up and declared to the assembled crowd that Novartis was right to sue the NHS over not using its drug. No one from his team flinched - but previously this would never have been uttered by any other ABPI leader. The era of proactive management had arrived. 

Khanna explains: “I think when I started with the ABPI board, the industry was under scrutiny like it never had been before. So we really needed people that would become more proactive: you needed a board that would be willing to help work with the ABPI to tackle these issues. 

“My role has been to remain balanced within these issues whilst creating the right environment to praise our members. Our chief executive Stephen Whitehead – he’s done a great job of bringing passion to the role and is someone who listens to his members. He’s got the understanding and he’s engaged with stakeholders - and so we’ve put this solid ABPI team together to really focus on critical issues.”

PPRS deal

One of these critical issues - if not ‘the’ critical issue - has been VBP. When Khanna first arrived as president, the lobby group was preparing to negotiate a new pricing scheme with the UK government for the first time in over 50 years. 

Speaking to Pharmafile just after taking the role, Khanna said he wanted to see evolution, rather than revolution, from the old system. And in many ways this was the end result.

The government essentially dropped VBP, which was the former health secretary Andrew Lansley’s ideological baby, and instead opted to keep many of the elements of the half century-old PPRS pricing scheme, but with a little extra added in, which includes allowing NICE to recommend more medicines. 

If it ended there, Khanna and the ABPI would be the most popular industry lobby group in the world - but the UK government added a sting to the tail. It would drop VBP and help reform NICE, but only if pharma kept the drugs budget down.

So from 1 January 2014 until the start of 2018, the £12 billion NHS patented drugs budget must not grow by more than 2%, and this year it must stay flat. In March, pharma companies began paying the government back any amount it went over the agreed limit. No one is willing to publically announce the sums involved, but it will be a galling process for every firm, especially SMEs. 

Despite this, Khanna is adamant he and the ABPI got the best deal during a tough period for the UK. “Where I started in April 2012, well we had a set of extremely complex negotiations and what was on the table went well beyond the PPRS. Coupled with this, we also had a very difficult economic environment.

“So we were faced with the risk of the PPRS going away and VBP coming in - that was the starting point when I began. But when I look at where we ended in November last year, all of the core elements afforded to us by the PPRS that were critical to retain the UK as a strategic market were kept. 

“So we still have free price; there are no price cuts; we keep the five-year deal, the patient access schemes, NICE - all of the things our members wanted to retain.”

And on top of that, Khanna argues, the ABPI was able to evolve VBP to value-based assessment, something he says will ‘broaden the definition of value’ - a critical point for the Association, “because for us it’s all about access and uptake of medicines for patients”.

But what about the repayments? Khanna says that this can be chalked up to the industry ‘doing its part’ on the austerity quest set by the government. “But this is transformational,” he believes, “because now we’ve taken the issue of the costs of medicines off the table and now you have this game-changing opportunity to free the NHS from cost constraints.” 

NICE will argue that cost hasn’t completely been taken out of the equation, but the pricing watchdog is currently undergoing internal reform that, according to a recent interview with its chief executive Sir Andrew Dillon, could allow more medicines onto the market as a direct result of the new PPRS deal. 

Khanna says: “With NICE, it’s about broadening this definition of value and how do we, as the ABPI, work through that.” A consultation on exactly that is still out for discussion, but the noises from pharma are positive that this will go a long way to help uptake, and perhaps ease some of the pain of repayments.

Many in the industry were loudly opposed to the new deal and the enforced rebate that effectively stopped some individual companies from being able to grow.

Khanna dismisses this criticism, and says that in reality, the deal was the most popular ever: “When I step back and look at how our members responded - well, you only have to look at the numbers, as 93% of companies signed up for the new deal - which is up from 88% last time. I think it was the best deal we were able to get during some difficult times.” 

Multitude of responsibilities

The overriding feeling after interviewing Khanna is that he is a very, very busy man. As he explains: “First, as president, you’re managing a board of your peers - so that’s 15 other directors across companies that represent small, medium and large companies. 

“Second, you’re managing the ABPI, a body that has very strong, capable and dynamic leaders and the rest of the team, and you need to make sure that you enable them to be successful, and make sure that the board provides them with very clear guidance and direction. 

“Third, you have your day job, which for me has been running MSD UK. Here, you have to rely on having the right leaders to enable you to manage your day business, as well as all the other things I need to do at the ABPI.” 

And on top of this, there are more people involved than ever before. Since his presidency began, an entire community has arisen that now wants access to the ABPI, or vice versa.

This includes: clinical commissioning groups, as well as the evolving face of the NHS; NICE with new powers; the Department of Health under new leadership; Number 10; patient groups; health and wellbeing boards, and the extra 29 companies that have signed up to the ABPI since Khanna began. 

“You name it,” Khanna says, “there were a lot more stakeholders that we needed to work with throughout this time.” Will he now take things easy? Not a chance. In January he stepped down from his role as head of MSD UK but moved into a higher position as senior VP and regional president of MSD’s European oncology unit, although he will still be based in the UK. 

He says: “Oncology is a critical, future growth driver for MSD and being given the role to lead the European organisation and to build on the European oncology business, is very exciting and very important. It’s definitely something you cannot say no to.” 

Social media and guidelines

But over the past two years, has Khanna been too busy to deal with more day-to-day concerns for pharma? One element that has not made much progress is the issue of social media guidelines - something pharma has been crying out for, but the ABPI still appears reluctant to deal with. 

When asked about what has been done to shore up rules and guidelines on social media, Khanna says simply: “To be honest, this hasn’t been much of my focus during my presidency.” He concedes it is important but says that the issue is complicated because there are some companies that are much more proactive with social media, and there are some that simply aren’t.

There is PMCPA guidance about social media but the ABPI admits that “there is a definite view among companies that this probably doesn’t go far enough in terms of what the industry thinks it should be doing”.

The ABPI says that it is having conversations with the PMCPA about how it would best do that, but adds that it’s “not quite there yet in terms of having a response”. The Association even admitted that it is actually considering whether it is still something it wants to deal with. 

The presidential role

But is the role of president still important for the ABPI? “Yes,” Khanna says without hesitation. “The role of the president is to really keep everyone moving forward and enable the organisation to do its job. 

“So absolutely, we do need a president, whether it’s an ABPI role or other roles - if you’re leading it, you need to direct people, but also roll up your sleeves and get involved when you need to.” In fact, over the last few years, the role of the president has grown as members expect whoever is the nominal head to be more vocal in the public arena. 

The next head in line for the ABPI presidency, Pfizer UK’s boss Jonathan Emms, should do well in that regard. He has over the past three years been very vocal on key UK issues for his firm and beyond. Emms has also been highly critical of the new PPRS plans, notably over the issue of repayments, and has even used British national newspapers such as the Times to pen criticisms towards bodies such as NICE for blocking new medicines. 

So, does Khanna think he will be a good president? He says he has met with Emms several times and worked with him for the past two years on the ABPI board. “I think very highly of Jonathan,” Khanna says.

“He’s very passionate about the UK market, and we share the same views on many issues. He was very active on the board and a key member of the negotiating team [for the new PPRS], and he’s been very supportive of me as president, and I’m confident he will serve the ABPI very well.

“He knows that a key issue will be for him to work with the ABPI to keep it proactive and serving its membership as the UK environment continues to change. I’m very confident he’ll do well and I’m grateful for his support - I think he’s up for the challenge.” 

But what of his criticism of the government and of NICE, the people he will now need to work even more closely with? Khanna explains that this should not be a hindrance, but rather an asset: “I think in this role as president, sometimes you need to be outspoken - so Jonathan is passionate about the value our industry brings to patients, to the NHS and to the UK, just as I am.

“He’s very supportive of the PPRS deal, but he’s also clear that we need to work together to ensure that we deliver on the opportunity that this deal represents. I think what we’re seeing is that we need to be vocal about the real need for the government to work hand-in-hand with the NHS and NICE to take advantage of this deal for patients. 

“And in that context I applaud Jonathan for being outspoken, because in order for this deal to really benefit patients, we’re going to have to keep pushing the government to free-up the perverse incentives that exist within the system.”

In the end, does Khanna have any regrets about his time as ABPI president? “Absolutely not,” he says. “If I could rewind the clock and do it all again, I definitely would.”

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