Transparency data

27 September 2023 minutes

Published 10 July 2024

Meeting details

The meeting was held on 27 September 2023 from 2pm to 3:30pm at the Association of the British Pharmaceutical Industry (ABPI) offices, Marie Curie meeting room and via Microsoft Teams.

The chair was Russell Abberley.

Minutes were taken by Michael Vidal.

Attendees

From the Department of Health and Social Care (DHSC):

• Stephen Hennigan
• Noah Kidron-Style
• Richard Mattison
• Tom Slingsby
• Bilal Evans
• Alison Hardaker
• Will Olivier
• Kenny Mok
• Simon Roer
• Lisa Holloway
• Michael Vidal

From NHS England:

• Rob Kettell
• Pete Scott
• Mary Majiyagbe
• Patrick Rooke

From ABPI:

• Russell Abberley (chair)
• Paul Catchpole
• David Watson
• Victoria Jordan
• Mike Ringe
• Ryan Hollingsworth

From devolved administrations (DAs):

• Alison Strath (Scotland)
• Anne-Marie Blaney (Northern Ireland)
• Cathy Harrison (Northern Ireland)
• Andrew Evans (Wales)

From the Office for Life Sciences (OLS):

• Hannah Lom

From the National Institute for Health and Care Excellence (NICE):

• Helen Knight

From the British Generic Manufacturers Association (BGMA):

• Mark Samuels (observer)

Introductory remarks

Russell Abberley, chairing, welcomed everyone to the meeting. Russell Abberley highlighted that as we continue negotiations on a successor to the 2019 voluntary scheme for branded medicines pricing and access (VPAS), it was important that these meetings maintained their independence from the negotiating process and should continue to solely focus on the operation of the current VPAS scheme. This is to ensure that lines of communication are not blurred, and that proper governance of negotiations are maintained. There was no disagreement with this point at the meeting.

Minutes of last meeting

Russell Abberley introduced the minutes of the last meeting, held on 13 February 2023.

There were no comments on the accuracy of minutes, which were accepted as an accurate record. There were 4 actions arising:

Action 1

DHSC agreed to consider options for improving the visibility of operational review minutes and metrics.

Stephen Hennigan noted that all the previous operational review minutes were now published on GOV.UK as well as DH eXchange. Discussions were ongoing with our digital team to iron out continued issues around publishing of scheme metrics due to the complexity of converting metric tables or graphs into the necessary accessible format.

Action 2

DHSC to share data with ABPI on the number of unsuccessful price increase applications.

While Stephen Hennigan indicated that this action had been cleared, David Watson mentioned that there remained an unresolved issue of understanding what percentage of the total application process these unsuccessful applications represented. David Watson understood that currently this information couldn’t be provided, but wondered whether in future there was a way for government to provide more transparency on how it is approaching this in terms of methodology or purpose.

Stephen Hennigan agreed to discuss this in more detail with ABPI over the coming weeks.

Action 3

DHSC to investigate whether detailed information on end scheme reconciliation can be provided as part of the quarter 4 (Q4) 2023 sales data publication.

Stephen Hennigan mentioned that greater analytical detail has now been included in the Q1 2023 sales and data publication which will be discussed further in this operational review meeting.

Action 4

NHS England to arrange a dedicated meeting to discuss ABPI proposals for commercial framework and horizon scanning data for the VPAS dashboard.

Rob Kettell stated that this would be discussed in the NHS England update section of the meeting.

Operations update

Richard Mattison updated on the operational matters of the scheme, noting that the data presented included that for Q1 2023. Richard Mattison highlighted that eligible sales had increased year on year throughout the life of the scheme, noting 2022 generated £1.8 billion in payments back to the NHS by industry.

Richard Mattison highlighted the DAs’ share of VPAS quarterly income, based on primary care data spend on branded medicines for each quarter, which is consistent across the UK. This system has been in place since the previous 2014 Pharmaceutical Pricing Regulation Scheme (PPRS) and is still considered the best available data to decide share of income.

The number of medium-sized companies entitled to the exemption on sales up to £25 million in 2023 had increased from 52 to 59 companies compared to 2022. This exemption is currently valued as of Q1 2023 at £164 million.

Richard Mattison noted that there were still some 3% of presentation level reports from 2019 that were outstanding from companies. There was discussion to try to determine the root cause of this issue. David Watson felt that as a future voluntary scheme would likely be more complicated in terms of gathering data, it would be helpful to understand if this is an operational or company issue.

Action

DHSC to explore and understand the root cause of some companies’ failure to supply presentation level data timeously.

Action

Further to this, DHSC and ABPI to also consider what types of mitigations, incentives or penalties could be available as part of future voluntary scheme.

Eleven companies were granted price increase applications for branded products (relating to 106 different presentations) in 2022 as of 26 September, an increase from the equivalent period in 2021 which could have been due to the increase in the 2023 payment percentage. The year 2023 (July) had seen 7 companies granted a price increase, covering 26 presentations. Richard Mattison noted that the value of the 2023 presentations had already reached £70 million compared to £63 million for the whole of 2022.

There have been no disputes under the current scheme.

In terms of the Northern Ireland protocol, it was noted that where companies are supplying Northern Ireland directly from a European country, DHSC had worked with those companies to ensure those sales are reported appropriately as a ‘subsidiary’ company.

End of scheme reconciliation

Richard Hambrook updated on the operational process relating to the end of scheme reconciliation (ESR), firstly noting that as NHS Business Services Authority (NHSBSA) will be able to automatically update the payment report balances once the ESR payment percentage is known, companies will not have to re-submit their 2023 quarterly and annual reports. Richard Hambrook highlighted the 2 reimbursement options of either producing a refund to companies or offsetting the due amount against the next quarter’s payments under the new voluntary scheme from Q1 2024. 

David Watson and Mark Samuels raised their concern regarding the department’s proposal to offset future payments, as this could create auditing issues and would contravene accounting good practice. There was also concern about when companies would know what the size of the ESR would be. It was felt that further guidance from the department on the mechanics of this process would be beneficial.

Action

DHSC, ABPI and BGMA to discuss best ways to ensure companies receive appropriate communication to support understanding of ESR.

Scheme metrics update

Will Olivier highlighted the key findings of the metrics discussion between DHSC, ABPI, NHS England and NICE held prior to this operational review meeting.

There continued to be a fall in the number of new product launches from Q1 2023 compared to Q1 2022. This also includes the decline over the same period for new active substances (NASs) and the positive technology appraisal (TA) subset, and an associated fall in the rolling 12-month trend.

Will Olivier noted the spike in Q4 2022 of the number of terminated NAS TAs, and the discussions to ascertain the reasoning behind this increase.

Will Olivier noted that Q1 2023 gross sales growth from Q1 2022 to Q1 2023 was 2.12%. For the past 3 quarters, the quarterly growth compared to the same quarter in the previous year had been approximately 2%. Will Olivier highlighted that for the last 3 years Q1 growth had not been representative of the growth by the end of each of the last 3 years. It was believed this was due to the associated effects around COVID.

NHS England update

There was no NHS England update.

DA update

Alison Strath (Scotland) reported on the continued work undertaken with DHSC colleagues on the practicalities and operation of the scheme. Alison Strath also noted that the new Cabinet Secretary would be meeting Richard Tobertt of ABPI which would be a good opportunity to work through key issues from an industry perspective. Andrew Evans (Wales) and Cathy Harrison (Northern Ireland) said there were no issues to note from their administrations.

DHSC update

Stephen Hennigan noted that the statutory scheme consultation was currently live, and he encouraged as many companies as possible to respond, noting the closing date was Tuesday 10 October.

NICE update

Helen Knight updated the group on the work to implement the new NICE processes and methods manual. Currently her team are tracking and reporting each quarter, with the aim of producing a comprehensive, in-depth report by the end of 2023 once they had a full year of committee discussions using the new methods. NICE were tracking items such as the severity modifier, real-world evidence and some of the other flexibilities, in particular around how they are managing uncertainties for rarer conditions as set out in the revised NICE manual.  

For example, of the 43 topics that have gone using the new manual (as of June 2023), 8 companies applied for a severity modifier, with 5 gaining committee approval. There had also been an increase in the utilisation of real-world evidence in submissions. Of the 19 identified, the committee accepted this type of data as primary evidence in their consideration on 8 occasions. Additional flexibilities had also been granted in 8 circumstances.

Helen Knight said that they had been implementing some modular updates to their methods, looking at a proportionate approach to technology appraisals. This had seen a 17% increase in timeliness of appraisals.

For the year ahead, Helen Knight said they would be looking to streamline their cost comparison approaches and cost utility submissions, where they were confident that they would be cost-effective. They would also look to streamline potential managed access topics, as well as think about a pathways approach, to try to develop a core model in a particular disease area that could start to be used over time. Pilots would be commencing for these workstreams later in the year.

As part of the work last year, NICE had started to change the way that it reported its key performance indicators, to ensure it had a more granular way of reporting on the timeliness of its work programme. This would help it align with how other international organisations report.

ABPI update (including VPAS chapter 3 performance - annual survey results)

Victoria Jordan summarised the key findings from the fourth annual survey of VPAS members on the implementation of the commitments within chapter 3 of VPAS.

Thirty-five companies responded to this year’s survey with a broad mix of company representation.

Horizon scanning, the NHS England triage process, NICE’s evaluation of new medicines and significant indications received positive company feedback. Suggested improvements included taking on a more streamlined approach to horizon scanning with all relevant organisations receiving more joined up information, as well as a call for a greater role for NICE in terms of early triage conversations.

Victoria Jordan noted that in terms of commercial access agreements, there was a negative company perception around the willingness for NHS England to offer commercial flexibilities and to provide solutions when there were difficulties getting to a cost-effective price. Companies felt generally NHS England was open to the conversations about flexibilities but had limited appetite to see these through to conclusion and were more focused on the price of achieving a simple discount.

There was also concern relating to combination products coming to market again, citing issues such as lack of commercial flexibilities being a stumbling block.

Overall, there is a company perception that some of the commitments in chapter 3 might not have been met or delivered as they would have envisioned. There has been some concern that the NICE and NHS England decision making process in particular has become challenging in terms of keeping the UK as an attractive early launch market.

Reflections on the 2019 VPAS (including operational reviews)

David Watson stated the importance of having a twice-yearly operational review of the performance of the voluntary scheme, ensuring there is appropriate scrutiny and accountability for the department, industry and the public. One of the key milestones for the successor scheme is to have identifiable metrics in place much faster, ideally in the first year of the new scheme.

David Watson also felt that it was important that we keep conversations about the sentiment, financial direction, and the challenges faced by companies in the new scheme. It was suggested that it would be helpful to have some kind of review of the end of scheme reconciliation possibility 6 months or so into the new scheme.

Stephen Hennigan concurred with David Watson’s assessment of the operational review’s importance, expanding on the successful mid-scheme review and also highlighting the increased and constructive dialogue the department and industry have had, and the willingness for the department to listen - for example, in the amendment of the 2022 payment percentage.

AOB

None.