Transparency data

22 July 2024 minutes

Published 4 October 2024

Meeting details

The meeting was held on 22 July 2024 from 2:00pm to 3:30pm in the conference rooms at 39 Victoria Street, London and on Microsoft Teams.

The chair was Gila Sacks.

Minutes were taken by Michael Vidal.

Attendees

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

• Gila Sacks
• Stephen Hennigan
• Noah Kidron-Style
• Richard Mattison
• Tom Slingsby
• Bilal Evans
• Alison Hardaker
• Kenny Mok
• Michael Vidal
• Melissa Wingfield
• David Barley

From NHS England (NHSE):

• Jack Turner

From the Association of the British Pharmaceutical Industry (ABPI):

• Kim Assender
• Russell Abberley
• Richard Erwin
• Paul Catchpole
• Janet Valentine
• Joe Edwards

From devolved governments (DGs):

• Cathy Harrison (Northern Ireland)

From the Office for Life Sciences (OLS):

• Hannah Lom
• Alex Mclaughlin

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

• Helen Knight
• John Spoors

From the British Generic Manufacturers Association (BGMA):

• Mark Samuels (observer)

Introductory remarks

Gila Sacks (GS), chairing, welcomed everyone to the first operational review of the new voluntary scheme. GS gave thanks to everyone involved in the challenging work currently happening around the implementation of the scheme. GS stressed the importance of the collaborative approach that brought about the success of the 2024 voluntary scheme for branded medicines pricing, access and growth (VPAG) negotiations, and noted that this was the foundation upon which we are building the implementation of the new scheme.

GS mentioned that early conversations with new ministers had been very positive, with a clear and strong commitment to the life sciences sector, expressing how central that was going to be to the future health and growth mission.

Stephen Hennigan (SH) set out a proposed updated structure for operational review meetings going forward, with agenda items looking at thematic areas rather than organisational updates. This will be set out in a revised terms of reference and will aim to make meetings more discursive and avoid repetitive information sharing.

The Association of the British Pharmaceutical Industry (ABPI) expressed its support of this new approach. Kim Assender (KA) emphasised that the key to the success of these meetings was to ensure that the focus was on how and whether the objectives of the scheme were being met.

ABPI also set out the importance of operational review members having adequate time to prepare, noting the late circulation of papers ahead of the 22 July meeting. The terms of reference should set out expectations about when papers are circulated to allow enough preparation time. ABPI also queried whether 90-minute meetings allowed enough time for deeper and more rewarding conversations.

Action 1

DHSC will ensure members are contacted well in advance of the next meeting in November regarding agenda items, and before all future meetings. All papers for future meetings are to be shared 2 weeks before the meetings.

Operations update

Richard Mattison (RM) updated on the operational matters of the scheme, highlighting that eligible sales for Q1 2024 were just over £3 billion, with resulting payments back to the NHS by industry of £597 million.

RM highlighted the devolved governments’ share of VPAG 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 Price Regulation Scheme (PPRS) and 2019 voluntary scheme for branded medicines pricing and access (VPAS) 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 between £6 million and £30 million in 2024 has decreased to 56 compared to 59 companies in 2023. This is in part due to the increase in the exemption range from between £5 million and £25 million in VPAS to between £6 million and £30 million in VPAG. As of Q1 2024 this exemption is currently valued at £190 million.

Noah Kidron-Style (NKS) asked ABPI colleagues whether there had been any concerns from medium-sized companies around their understanding of the mechanics of medium-size company exemption. There was agreement that further communications would go out to medium-sized companies to ensure their understanding of the process and to make sure that the wording is clarified.

Action 2

DHSC to draw up a list of the current medium-sized companies and send out communication to them by the end of September, explaining and clarifying the medium-size company exemption.

RM noted that there were currently no formal disputes, though a dispute notice had recently been raised by a company under the previous scheme (VPAS), with dialogue ongoing between parties.

RM noted that they were still waiting on a few presentation level returns (PLR) submissions from companies. He also noted the increasing importance of timely provision given the new format of this scheme. ABPI queried whether there is anything we can do to encourage timely submission well ahead of the deadline and whether companies were clear on what information was to be reported to DHSC and by when.

Action 3

DHSC to provide a schedule of all the reporting requirements and timings to help companies plan, including what the requirements of auditors are.

Reference pricing update

NKS updated members on the implementation of reference pricing, firstly thanking companies for their support and patience during the first phase of this work. He noted that data sharing is part of an ongoing and collaborative process with companies and that the department’s priority is ensuring that companies have confidence in the process followed and the data produced.

For phase 2, the department will be sharing reference prices for over 95% (in both volume and value terms) of the presentations that are registered in the portal. This includes presentations of all relevant product types, including those such as combination virtual therapeutic moieties (VTMs), products that don’t have a VTM, as well as vaccines, that were excluded from phase one. Coverage for combinations will be slightly lower than for other product types.

NKS set out that the department will send out explanatory communications to companies to accompany the data. This will explain what the data does and does not contain, providing clarification about each of the data fields, including information about the sources of such data and how to interpret it. The communications will provide guidance to companies on completing their reviews of the data provided, including highlighting higher-risk areas of the data such as complex combinations, non-VTMs, vaccines, and reference prices subject to pro-rata adjustment. There will be 2 workshop sessions with ABPI and all VPAG and statutory scheme members across industry. This will provide an opportunity for companies to directly ask questions about what this data says and how they should interpret it, as well as other broader questions about the process.

NKS noted that while companies will have a period of 45 days to query data, they can also apply to extend this by a further 15 days by writing to the department.

ABPI noted support for the proposed approach, given the need for a pragmatic way forward. They noted that responding to reference pricing data was a significant time and resource burden on companies, particularly smaller companies, and that delays to sharing data had created significant uncertainty for companies. They acknowledged that given the complexity of reference pricing the data was unlikely to be perfect. However, they stressed that it was vital that the department was able to move quickly with data sharing so that companies could proceed with reviewing the data with an aim of drawing a line under the reference pricing process.

Scheme metrics

David Barley (DB) acknowledged the metrics process for this operational review needed to be improved, both in terms of timeliness and resolving uncertainty regarding the newer metrics. DB updated members on scheme metrics discussions which took place on 17 July and 19 July.

DB remarked that future iterations of the metrics slide pack will include sales data split by older and newer medicines, which had been omitted due to the transitional period of Q1 where companies were not required to provide a breakdown.

DB noted that 4 price increase applications were granted in Q1 and that no top-up payment reduction had been awarded as of Q1 2024. The department does not currently collect data concerning the backlog of applications, but will work to be able to provide further information on this by the next meeting.

Action 4

DHSC analytical and operational teams to explore the feasibility of providing data on the pricing application backlog ahead of the next operational review in November.

DB set out how there had been an increase in the number of new product launches in Q1 2024 compared to Q1 2023 (26 in Q1 2024 and 16 in Q1 2023).

The rolling 12-month average had also been rising since Q2 2023. When looking at new active substances (NASs) specifically over the same period there was also an increase to 7 NAS price applications in Q1 2024.

Multiple technology assessment (MTA) data was not included. MTAs have more than one publication date, so an agreement is first needed on how these should be presented. Gross sales growth from Q1 2023 to Q1 2024 was just over 5%, the highest quarter-on-quarter growth observed since Q4 2022.

ABPI stated their view that, for future metrics, it was important that they have a defined link to the scheme objectives, and that discussions on how to improve the metrics should happen in the coming months leading up to the next operational review. ABPI further noted that due to late circulation of the metrics pack, they would need further time to consider the information provided.

Helen Knight (HK) said that NICE produces several internal metrics for several different boards and groups, so it was important to have consistency in the metrics being provided and not have too much duplication.

Action 5

All operational review members to review the metrics paper and flag to DHSC analytical team areas that could be improved.

Action 6

Ahead of next operational review, DHSC and ABPI analysts to discuss and agree any further changes to the metrics pack to ensure alignment with scheme objectives and agree ownership of producing each metric and the timescales.

NHSE update

Jack Turner (JT) discussed the progress against the chapter 3 commitments, highlighting that a cross-government delivery team consisting of senior officials has been assembled to ensure accountability and delivery of the various voluntary scheme commitments. Their work will feed into this operational review board. A plan on a page has been developed for each of the 4 commitment areas which goes through what will be delivered and by when. The delivery team will meet with ABPI colleagues bi-monthly to deep-dive and problem-solve areas of contention.

A UK-wide working group on horizon scanning and information sharing has also been formed. Positive discussions have already taken place. NHS England (NHSE) will look to incorporate ABPI and the other trade associations into future forums. This will be formalised in the coming month subject to ministerial approval.

Work is also underway for the formulation and delivery of an end-to-end pathway guide. The aim is to provide a first draft to ABPI by early September.

NHSE is working towards having the commercial framework and budget impact test consultations live this month (July). This is currently working its way through ministerial approval. The consultation timeframe has been reduced from 12 weeks to 8 weeks to ensure timelines do not encroach on other 2025 workstreams. NHSE and DHSC will also hold a webinar or workshop for companies to better understand how to respond to the consultation.

NHSE has also selected an advanced therapeutic medicinal product (ATMP) as part of an outcome-based pilot agreement. NHSE will be providing communications shortly on the way NHSE has selected these pilots and how the process will work going forward. NHSE is also looking at how to ensure future best practice around the pilots. This will hopefully be presented at the next patient access to medicines partnership (PAMP) meeting.

Lastly, JT talked about the work to reduce to an appropriate level the access to the medicines procurement and supply chain (MPSC) frameworks for secondary care medicines, to make sure it is only available for NHS patients.

OLS update

Alex Mclaughlin (AM) summarised the progress on the main objectives of the investment programme. The Office for Life Sciences (OLS) has been working successfully with delivery partners and industry on an agreed set of plans across clinical trials, manufacturing, and health technology assessment (HTA). These plans have been signed off by the joint OLS/ABPI Investment Programme Board and been given ministerial approval.

The next phase of project launches are now also under way with associated memorandums of understanding being put in place. There are also plans to put in place high level announcements to new ministers to showcase the positive public/private collaboration which can be achieved.

The last objective was working on the cadence and the mechanics of how the programmes will work and how success factors and impact would be measured once the projects are underway.

Janet Valentine raised the importance of ensuring that the various trade associations were also made aware of when the OLS communications would be happening.

ABPI update

ABPI noted that the overarching company sentiment was that it is too soon to tell what the impact of VPAG and reference pricing in particular would be, though this will become much clearer once the reference price datasets had been sent out to companies.

ABPI noted their view that the older products mechanism is likely to have an impact on the viability of certain older medicines, with companies making decisions on whether they withdraw or divest products, or apply for exemptions under exceptional circumstance. This might also have an impact on company launches of products that are classed as older medicines. ABPI felt that these issues should be discussed in greater detail in the next operational review meeting.

Action 7

Future meetings to include an agenda item on the operational impact for both companies and DHSC of the older products mechanism and reference pricing - to be included in the next operational review in November.

ABPI noted the importance of companies having an ‘escape valve’ in the event that the older medicines mechanism creates issues for individual products. ABPI noted that currently no top-up exemptions had been awarded to companies. ABPI suggested further discussion with DHSC before the next operational review on the rationale and factors informing the department’s decisions.

Action 8

DHSC to include an item in November’s operational review on the operation of the exceptional price increase and reduced top-up payment percentage application process.

Action 9

DHSC to send communications to companies in the coming months to ensure they have clarity about the top-up exemption processes.

NKS said that work was planned to provide a more comprehensive template for companies that not only provided financial information, but also information about supply impacts.

The next operational review is scheduled for Monday 25 November at 2:00pm. ABPI to host and to chair.

AOB

None.