In 2010 the UK Government proposed moving towards a value-based system for assessing and pricing branded drugs available to patients. This page includes a summary of the contributions
towards the debate on pharmaceutical pricing. Whilst the current system is not perfect, the value-based pricing mechanism would have been highly unwelcome to both patients and UK R&D. The proposals were dropped in November 2013.
Negotiations with the UK Government over pharmaceutical pricing have achieved a good result for patients,
the NHS and the industry. (2020health
blog) – December 2013
Proposal: Value-based pricing has at last and rightly been dropped.
Response: A good result for all concerned. Political opposition has been minimal.
Consider alternatives to value-based pricing, says 2020health The
Pharmaceutical Journal – 10 May 2013.
“The independent health think tank report "Value-based pricing: the wrong medicine for the nation?" surveyed public
concerns about proposed value-based pricing. Barbara Arzymanow, main author of the report, concluded that "patients could mistake value-based pricing for a commitment to make more medicines available, which is not the case".
The report claims that medicines pricing can be improved and urges the Government to consider alternative solutions, including continuing to allow drug companies to fix
prices for individual drugs, lowering the price of older drugs to accommodate high enough prices for new products, developing a pricing system to encourage companies not to overlook rarer diseases in search of drugs for more lucrative markets and encouraging
more patient access schemes to help make drugs available on the NHS.”
European Pharma Regulation Conference 2013, London, UK
13 November 2013 I chaired and presented the following slides at the European Pharma Regulation Conference, accompanied with a speech
Value-based pricing "not in patient interest" PMLiVE 9
“The public have been told that politicians are staying out of the NHS, so this change could seem like hypocritical interference,” said the report's
main author, Barbara Arzymanow, who has spent 25 years as an investment analyst specialising in the pharma industry.
Reporting in the BMJ British Medical Journal. BMJ 2013;346:f2965 8 May 2013
"New drug pricing scheme could politicise decisions and reduce access, says think tank"
drug pricing plans damage drug access – report Pharma Times (Article by Ben Adams) 8 May 2013
“Barbara Arzymanow, main author of the report said: “The public have been told that politicians are staying out of the NHS, so this change could seem like hypocritical interference. Patients could mistake
value-based pricing for a commitment to make more medicines available, which is not the case. One product can have many uses and dosage regimes which are of different ‘value’ to different people.”
“Pricing of medicines can be improved, but not through this entirely new scheme. The confidence of patients and the future of medicine are more important than words.”
Value-based pricing: the wrong medicine for the nation? (2020health blog) – May 2013
Proposal: Value-based pricing
is not in the best interests of patients.
Response: Value-based pricing was at last dropped in November 2013.
Waiting for Decisions on UK Pharmaceutical Pricing (2020health blog) – April 2013
Proposal: Hopefully the slow pace of progress
reflects a radical rethink of unworkable proposals.
Response: The unworkable proposals were dropped in November 2013.
Medical advisory body “NICE” should not spend too much time valuing drugs (2020health blog) – April 2014
Proposal: NICE is in danger of putting too much effort into assessing the financial value of drugs. The only benefit from NICE finding a drug too expensive is to protect
other drug companies from paying a rebate.
Response: On 18 September 2014 the Chief Executive of NICE said, “We’ve been looking in detail at how to change
the way we appraise medicines and other technologies on behalf of the NHS. Following an extensive consultation, it’s clear that just changing NICE’s methods will not overcome concerns about how the NHS accesses new treatments.”
Proposal: Rebates received by the Government under the 2014 PPRS should be reflected in the budgets of Clinical Commissioning Groups so that they do not restrict the availability
of drugs unnecessarily.
Response: Action has not yet been taken on this front as at 12 December 2014.
Proposal: All QALY methodologies deprive patients and doctors of the freedom to make their own decisions about quality of life.
announced a major rethink on 18thSeptember 2014
Think carefully about
value-based drug pricing in the UK and let common sense prevail (2020health blog) – September 2012
Proposal: No VBP system can possibly take into account
all the relevant facts affecting the likely benefit of a drug to every patient because individual circumstances differ too much. Some patients are bound to be the victims of decisions that appear unfair.
Response: VBP was finally abandoned by the Government in November 2013 some three years after my campaign began.
The Pharmaceutical Industry – Friend or Foe? (2020health blog) – July 2012
Proposal: The pharmaceutical industry is one of the major drivers behind the progress of mankind. We must not allow the shame of wrongdoing in the industry to distract us from seeing the big picture.
Response: The pricing agreement in November 2013 demonstrates the ability of the industry and Government to work together with mutual respect.
A wrong decision on UK drug pricing could seriously undermine all the good work that HM Treasury and the Department for Business, Innovation
and Skills have done to encourage the UK pharmaceutical industry (2020health blog) – May 2012
Proposal: The Treasury, the Department for Business, Innovation & Skills and the Department of Health should work closely together. They should be asked to advise ministers
on whether value-based drug pricing is an unacceptable risk.
Response: The November 2013 pricing agreement is so different from the original Dept. Of Health proposals
that an input from other departments seems likely.
Parallel importing and exporting of pharmaceuticals severely limits
the options in designing an effective UK drug pricing scheme. (2020health blog) – November 2011
pure value-based pricing system that excludes the transfer of revenue between products, outlaws patient access schemes and disallows the negotiation of direct arrangements with pharmaceutical companies is not the way forward.
Response: The November 2013 agreement keeps patient access schemes allows transfer of revenues between products and permits direct arrangements with companies.
The UK Government's Latest Thinking on the Value-Based Pricing of Medicines (2020health blog) – July 2011
Proposal: The Government has learned a lot but further careful thought is needed in the light of the UK's limited flexibility in fixing drug prices and the current pressures on the drug industry. Drug pricing anomalies must also be avoided.
Response: The issues of international pricing, pressures on the industry and unwanted anomalies are fully taken into account in the November 2013 agreement.
Dept. of Health Consultation on Drug Pricing: “A new value-based approach to the pricing of branded medicines”
(2020health blog) – March 2011
Proposal: Satisfying unmet healthcare needs is the goal of commercial, pharmaceutical
R&D. Innovation is always a part of R&D but is not an end in itself.
Response: The Department of Health response to the first drug pricing consultation that
closed in March has clearly indicated that the Government has recognised the importance of understanding this issue.
attention needs to be paid to pricing policies over the whole commercial lives of drugs rather than just on launch.
Response: The agreement on drug pricing reached
between the Government and industry in November 2013 focused on total drug sales of all branded products
risks involved in implementing the new pricing system could be reduced by keeping more of the positive features of the old system (PPRS).
Response: In November 2013
the Government announced that the PPRS would continue for all branded drugs.
approach to the pricing of branded medicines (Consultation response) – March 2011
Proposal: The Government must recognise that EU law removes a lot of pricing freedom from the UK authorities by permitting parallel imports and exports.
The November 2013 agreement with the Government over drug pricing makes special provision to minimize the consequences of parallel importing and exporting.
Health & Household Investors’ Brief #30, 31 & 32 (Leading UK publication on healthcare in City of London) – November & December
Proposal: Changes to planned Limited List of drugs no longer to be available on the NHS. The Government's original proposals
would have led to serious patient suffering.
Response: Following distribution of relevant editions of Health & Household Investors’ Brief to all MPs and
other lobbying of the Prime Minister (Margaret Thatcher), the Secretary of State for Health (Kenneth Clarke) implemented all Barbara’s proposals
drug pricing plan could trigger ‘avalanche of problems’ Financial Times, Article by Andrew Jack
(paywall) 6 May 2013, citing a report I authored
The Delicate Trick The
New York Times Article by Philip Crawford - 14th December 1991
But appearances can be deceiving. "Companies can be quite convincing in presenting a new product
as the most advanced and effective in the field," said Barbara Arzymanow of Kleinwort-Benson Securities in London, "but a little research can often reveal a competitor to be several years ahead. You have to be careful not to get drawn in by what corporate
officers, or anyone else for that matter, might want you to think."