90% of Branded Pharma Could Reduce UK Medicines Supply in 2023
50% of EMIG members have said they will reduce supply of medicines in the UK in 2023, whilst a further 40% are discussing a reduction.
These are the astonishing and concerning results of a survey of EMIG members in relation to the current crippling VPAS scheme. We have already heard similar dire warnings from a report from the London School of Economics and the British Generic Manufacturers Association (BGMA), as we recently reported here.
86% of the respondents to the EMIG survey considered the current VPAS 'affordability mechanism' did not provide certainty and stability for their business.
75% of respondents expected at least a 10% (if not more) fall in their business's investment into UK clinical research.
EMIG is going to be looking to raise awareness of the potential consequences for UK patients in the next few weeks.
What Is VPAS?
VPAS is the Voluntary Scheme for Branded Medicines Pricing and Access. This is an agreement on pricing and rebates between the Government - through the Department of Health and Social Care (DHSC) as well as NHS England - and the Association of the British Pharmaceutical Industry (ABPI) and manufacturers or suppliers who signed up to VPAS. The ABPI represents many of the big pharma innovator companies. Industry may not have wanted to enter into VPAS in an ideal world, but this is at least a voluntary agreement rather than something else that is imposed under the non-voluntary statutory scheme.
Under VPAS, there is an annual repayment rebate, which suppliers of branded medicines including branded generics, in vivo diagnostics, blood products, dialysis fluids, branded products supplied through tenders or central contracts and biological medicinal products (whether branded or unbranded) have to pay. The reason for the rebate is to enable growth in the medicines budget to enable more innovation and better health outcomes, but only up to a certain limit. Under the scheme, if too much is spent on medicines, then the industry has to pay some money back through the VPAS rebate.
The repayment percentage for each year of VPAS therefore depends on the difference between the allowed annual growth in sales to the NHS of branded medicines and what is actually spent. In 2019, in the first year of VPAS, the repayment percentage was 9.6%, and the industry repaid DHSC £850 million in total. It is predicted to be as high as 30% or even higher in 2023. This is sending shockwaves through the industry and will affect the patient community and their families.
Who Is EMIG?
EMIG is the Ethical Medicines Industry Group. EMIG is a multi-stakeholder network and trade association that represents the interests of life sciences companies in the UK. Its industry members range from new business start-ups focused on R&D, through to well-established companies delivering a wide range of essential medicines to patients.
Leslie Galloway, Chair of EMIG, commented: "The EMIG survey indicates the 2023 VPAS rebate will have an adverse impact on supply and investment in the UK".
"While the ABPI negotiated the VPAS, companies signed up to it, although oblivious to the forecast rebate forecasts for the final three years of the Scheme".
"Nevertheless, in the current economic environment, the Government will not take money away from doctors and nurses or families who cannot afford to heat their homes to give it to the pharmaceutical industry".
"2023 will be painful and, if there is to be hope for our industry for 2024 and beyond, we need to learn lessons from this current disastrous episode and rethink, not only how this Scheme is negotiated, but have an open Review of how medicines are funded."
Hear More About the Issue of Pharma Rebates and Its Impact on Patients
At the invitation-only PING Conference, which VWV will be holding in June 2023 in association with EMIG, we will be hearing about the impact of VPAS on suppliers of medicines, as well as what is likely to be coming round the corner with the new VPAS scheme, which will be in place from 2024. Speakers will include senior representatives of the Association of the British Pharmaceutical Industry, EMIG and the BGMA.