PPRS scheme payment percentage to rise by 6.62% in 2015
pharmafile | December 12, 2014 | News story | Sales and Marketing | ABPI, PPRS, VBP, Whitehead, government, medicines bill
The amount of payment due from pharma via the PPRS scheme for next year has been confirmed by the Department of Health and the ABPI.
They calculate that a payment percentage of 10.36% will be due in 2015 in order to underwrite the growth of the medicines bill, which in Q3 received a sum from the industry totalling £79 million.
The new fixed amount has risen dramatically from 2014’s lower rate at 3.74%, and if based on accurate estimates the payments for 2016-2018 would be 15% each year.
ABPI chief executive Stephen Whitehead, says: “Although the increased spend demonstrates a trend towards growth in the use of medicines, we know that this growth is not in new, innovative medicines but in older medicines and specialised commissioning.
“The Department of Health’s growth estimates for 2016-18 are one possible scenario for the future, however the PPRS scheme is designed to calculate payments based on actual growth.”
The rather complex PPRS pricing scheme came into effect on 1 January 2014 and will terminate on 31 December 2018. The industry’s inital reaction to the plan was mixed, with some suggesting that it is a missed opportunity for patients and also creates financial problems for smaller companies.
The agreed fixed limit spend will stay flat in 2015 but annual growth will be limited to 1.8% in 2016, with an increase to 1.9% by 2018. In setting the allocations for NHS England for 2015-16, the original estimate taken into account was £640 million, with the revised estimate then being increased to £796 million.
“In the PPRS there are a number of commitments to improve the use of innovative medicines which are currently not being met,” continues Whitehead.
“We are seeking a fair level of funding and growth in all therapy areas and care settings and are working with the Department of Health, NHS England and government to ensure action in key areas such as NICE reform, the CDF and medicines optimisation to maximise the benefits of the PPRS so that patients can get the right medicine at the right time.”
Earlier on in the year the UK government received a £74 million refund from the pharma industry after spending too much on patented medicines under the PPRS. The total paid in 2014 is £229 million; so less than the expected £300 million.
The industry will continue to make payments to the government if NHS spending on branded medicines exceeds the allowed growth rate. “Getting that rebate back to the decision-makers, getting that hard cash is critical,” said Whitehead in a recent exclusive interview with Pharmafile.
Even now there is still some confusion as to just what these payments mean for the industry. Earlier in the year Roche made public its assumption that the new PPRS deal, along with the repayments, had effectively given them a blank cheque for new drugs.
As to the rejection of its new £90,000 breast cancer drug Kadcyla (trastuzumab emtansine), the Swiss firm went as far to say that NICE’s negative decision underlined the ‘systemic failure’ to implement the PPRS deal.
Tom Robinson
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