Greater ambition is needed to improve patient access to innovative medicines

The government is consulting on changes to the Commercial Framework for New Medicines and the Budget Impact Test threshold. In this article, Paul Catchpole, ABPI’s Director of Value and Access Policy, sets out why this is important and what needs to change.

Few will argue with the principle that NHS patients should be able to access new clinically proven and cost-effective medicines that could benefit them. However, how that aspiration is achieved, and the rules that govern what is or is not considered cost-effective, continue to be hotly debated issues.

Improving the framework that governs access to new medicines is critical to turning around a decade of UK underinvestment in medicines.

Over the past decade, growth in the UK branded medicine market has been capped at an average of 1.1% a year for the first 5 years and 2% a year for the next 5 years; however, after accounting for inflation, this translates to a decline of over one-tenth (11%). In the same period, the NHS budget grew by one-third in real terms (33%). [1]

UK treatable and avoidable mortality is now the second worst in the G7 after the US, with UK mortality from treatable causes at a rate of 69 per 100,000. This is half again more than Japan, France and Canada. [1] We believe that limited access to effective medicines, and variations in their adoption for many NHS patients, is a contributing factor to this problem.

Bringing the UK’s investment in new medicines, currently at just nine per cent of total health spending, into line with other comparable countries like Italy (17 per cent), Germany (17 per cent) and France (15 per cent), must be part of the solution. [2]

The 2024 Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), agreed between industry, government and NHS last year, is a vital part of turning this situation around. The deal is designed to give the NHS greater certainty over what it will spend on new medicines over the next five years.

By imposing a cap on the growth of the NHS new medicines budget, the industry has committed to making a significant financial contribution to support the NHS. This contribution allows the NHS and NICE the freedom to be more ambitious about what policy changes they can make to ensure patients can access the medicines they need. These consultations provide an opportunity to do this.

As part of the 2024 VPAG agreement, a number of these rules are being reviewed through consultations happening in both 2024 and 2025. The two consultations underway in 2024 are on the NHS Commercial Framework for New Medicines, and the Budget Impact Test threshold. To look at these in turn:

What does the ABPI and our members want from Phase 1 of the Commercial Framework consultation?

The Commercial Framework sets out how NHS England, the National Institute for Health and Care Excellence (NICE) and pharmaceutical companies can work together. It outlines the ‘commercial options’ available for companies bringing forward new medicines for use in the NHS. These options might include, for example, price/volume agreements, outcomes-based agreements where payment depends on the outcomes achieved for patients, or indication-specific pricing (ISP) when the cost of the medicine might vary depending on what condition it is intended to treat.

The first 2024 phase of the consultation into the Commercial Framework looks at several issues, including indication-specific pricing, combination therapies, and Patient Access Schemes. Below is a summary of the changes that need to happen in each area.

Indication Specific Pricing

Most medicines are developed and launched to treat a specific condition. The use of that medicine for a specific condition is called an indication. However, once a medicine is approved for one indication, doctors and scientists often discover other possible uses. This process may require a great deal of further investment and research, but it can deliver tremendous value and results for the patients who benefit.

Usually, a medicine used by the NHS must be offered at the same price, regardless of whether it’s being used to treat a variety of different conditions. This ignores the cost of developing additional indications and the value they deliver for the relevant patients, which often varies by indication. Single pricing is increasingly out of step with how other countries are valuing and supporting this type of innovation, especially in rare diseases and cancers.

The consultation does acknowledge this challenge and agrees that Indication Specific Pricing could “result in increased access to new indications for a given medicine.”

However, as things stand, there continues to be a significant roadblock to any company wishing to make use of this pricing flexibility. To do so, companies must offer to sell their medicines at prices below the value considered to be cost-effective by NICE and agreed as part of the technology appraisal process. Generally, the NHS expects a further reduction in price to be agreed to access commercial flexibilities such as Indication Specific Pricing - prices need to be at or below the lower end of the NICE cost-effectiveness threshold. This means at £20,000 per Quality Adjusted Life Year (QALY) or below - often referred to as the “at or below” principle by industry.

This is a blunt tool that penalises a range of medicines and indications for different reasons, impeding patient access to innovation. It does not consider the individual circumstances or challenges at hand in making the medicine available to patients and is not justifiable across the board. It detaches the price from the value of the medicine that has been evaluated by NICE and mitigates any decision-making flexibilities granted by NICE’s decision-making Committees. It is also out of kilter with how other countries make medicines available to their patients.

Reaching a cost-effective price is already highly challenging, and having to reduce the price further can make the launch of the medicine/indication unviable. Patients have either been delayed access or not been able to access some medicines at all because of it. The problem will get worse as science advances and medicines are increasingly being used to treat multiple conditions.

Consistent recognition of indication-linked value, from the development of a medicine to its launch, would support consistency and predictability for companies and send a powerful message that UK policy is keeping pace with medicines innovation.

Combination therapies

Last year, following longstanding engagement with the ABPI, NICE and the NHS, the UK Competition and Markets Authority (CMA) released a statement to help support pharmaceutical companies working together on access to clinically important combination therapies.

To take full advantage of this positive development, companies need to be able to access data held by NHSE. Doing so is essential for them to be able to transact commercial arrangements between themselves, to enable a cost-effective price for the NHS. NHSE has proposed how it might provide access to data to support this ambition.

To ensure these proposals will work, additional clarity is needed regarding fees and timelines for data access to assist company planning. Data will need to be provided on a timely basis, and reassurance provided on data quality, particularly when a fee is charged. Given the importance of this engagement between companies during the NICE process, there should be a way of prioritising associated data requests.

NICE also needs to play its part by facilitating the timely scheduling of appraisals for combination therapies, including the rescheduling of NICE terminations that may have become viable for resubmission if a commercial agreement between the backbone and add on medicine companies can be agreed. There will also need to be some NICE flexibility in timelines during the appraisal process for these combination therapies, to allow for commercial dialogue and data access requests to take place. Flexibility in NICE methods may also be necessary in some cases where the challenges for an effective combination therapy cannot be resolved through commercial arrangements alone.

Patient Access Schemes

A Patient Access Scheme is a confidential pricing agreement between a company and the health system, which usually involves either a discount or a rebate on the price of a medicine, designed to improve the cost-effectiveness of treatment and allow patients access to medications that might not otherwise be provided.

An updated Commercial Framework is an opportunity to clearly set out the existing rules for Patient Access Schemes. As part of this, we would like to see England brought into line with Scotland, Wales and Northern Ireland, to support the use of these agreements in primary care. Doing so would reduce the demand on specialist clinicians, nurses and hospital pharmacy teams to administer repeat prescriptions and enable patients to benefit from care closer to home.

What is the Budget Impact Test, and how does it need to change?

The Budget Impact Test is one of the many layers of cost management for medicines in England. If any new technology or medicine is expected to cost the NHS more than £20 million in its first three years, the NHS can request further price negotiations with a manufacturer with the aim of managing the cost of introducing the medicine.

The Budget Impact Test is applied on top and independently of other cost control policies. As a result, it can restrict, reduce or delay NHS patients getting access to medicines that have already been independently judged to be both clinically effective and cost-effective uses of NHS resources.

We support the government’s proposal to raise the Budget Impact Test threshold from £20m to £40m. Doing so will alleviate the additional hurdle for patient access and partly address the failure to adjust it for inflation since its introduction in 2017. In the future, the threshold should be automatically adjusted to account for inflation.

However, this consultation is a missed opportunity to address the wider issues with the Budget Impact Test. Further changes should include improving transparency in how decisions are made; allowing for greater case-by-case flexibility for medicines like ATMPs to ensure patients are not unduly impacted; and exemptions from the test for medicines which have been provided as part of managed access schemes like the Cancer Drugs Fund and the Innovative Medicines Fund – given there is no risk to the NHS budget if these funds overspend.

What happens next

The first phase of consultations is now closed, and we await NHSE’s final response to our submissions. Next year, there will be a further consultation on the Commercial Framework, and I look forward to sharing our thoughts on those with you when we have seen the proposals and digested what they might mean for patients' access to medicines.

[1] OECD, Avoidable Mortality (preventable and treatable)

[2] How does the NHS compare to the health care systems of other countries?, The King’s Fund, p.57