The same news has come from Britain today. A press release from the United Kingdom Government stated:
A 25% increase in the price of a drug corresponds to 2 changes in the method. Good evaluates medications; Changes in cost-effectiveness thresholds and introduction of a new value set to assess health conditions.
Good Value for money for the NHS is currently assessed by applying a standard cost-effectiveness threshold of £20,000 to £30,000 per quality adjusted life year in addition to current treatments. This means that for a medicine to be considered cost-effective, it should not exceed the cost of current care by more than £20,000-£30,000, taking into account the additional life expectancy and improvements in health-related quality of life, typically generating the equivalent of 1 additional year of full health. Now it has been agreed upon Good Will introduce new limits from £25,000 to £35,000/QALY,
As part of today’s announcement, the government will support GoodUsing a new valuation approach to evaluate health-related quality of life. The valuation comes from asking thousands of members of the public how good or bad various health conditions would be. These are then used to calculate numerical values, which helps health care decision makers compare different treatments and understand their impact on health-related quality of life. Good Following consultation a new value set will be introduced for use with the EQ-5D-5L. This change could, on average, improve the cost-effectiveness of drugs.
However, perhaps more importantly, the VPAG mandatory discount will be reduced. The current rebate scheme—the Voluntary Scheme for Pricing and Access to Branded Medicines (VPAG)—forces pharmaceutical manufacturers to pay rebates if total UK spending on branded products exceeds expectations. Guardian Report:
At the heart of the new UK-US deal is an agreement to reduce so-called “rebates” under medicines payment arrangements between pharmaceutical companies and the NHS.
Under the current scheme, pharmaceutical companies are required to pay between 23.5% and 35.6% of the revenue from the sale of branded medicines to the NHS if the amount used by the public health service exceeds the agreed rate.
This will be reduced to 15% under a new relaxation in the existing voluntary scheme for pricing and access to branded medicines.
ABPI writes that this news reverses the decades of declining expenditure on pharmaceuticals.
The deal commits the UK to addressing the past decade of underinvestment in medicines in the country, which has seen the proportion of health expenditure on medicines fall from around 14% to 9%. Over the next 10 years, the country will increase investment in new medicines from about 0.3% of GDP to 0.6% of GDP, with key target milestones.
Why is the UK doing this? The UK currently exports £6.6 billion worth of pharmaceuticals to the US per year and President Trump has threatened to impose 100% tariffs on all these pharmaceutical exports. Under the new agreement, UK pharmaceuticals will be exempted from these tariffs for the next 3 years.
