UK life sciences and the changing commercial environment

The BIA asks government to make sure changes to the commercial environment for medicines in England do not damage UK life sciences’ global reputation

The BIA has this week responded to two government consultations that are likely to have significant impacts on the commercial environment for medicines in England.

Over the summer, the Department for Health and Social Care published consultations on proposed changes to the statutory pricing scheme for branded medicines and the introduction of regulations to allow NICE to charge companies for their health technology appraisal programmes.

The consultation on the statutory pricing scheme proposes changes to legislation to introduce new payment percentages. This will prevent any notable growth in the spend on branded medicines, despite the new funding settlement for the NHS which will see its budget grow by 3.4% over the next 5 years. If the government goes ahead with their proposals, the new payment percentages will come in to force in January 2019. In addition, according to the measures outlined in the second consultation, NICE will be able to charge companies between £88,000 and £251,000 to apply for its health technology appraisal programmes from 1st April next year.

In our responses to both consultations we argue that the measures proposed are sending a damaging message to the international life sciences community about the UK as a location to research, develop and launch innovative medicines at a critical time for the sector. As the UK prepares to leave the EU, the delivery of an internationally-competitive industrial environment for bioscience companies is more important than ever. Rather than showcasing the UK as a good place to do business, the proposals set out in the two consultations have caused alarm in the life sciences industry and have sent a negative signal to global-looking boardrooms.

This is exacerbated by broader developments affecting UK life sciences. Brexit is creating a great deal of uncertainty for UK companies. Depending on the outcome of the negotiations, the UK’s exit from the EU could pose a number of risks for the success and sustainability of the UK’s life science sector. For instance, recently published government guidance has now made it clear that a ‘no deal’ Brexit would mean a significant increase in replicative bureaucratic red tape for developers of innovative medicines that choose to sell their products in the UK.

On top of this, there have been various changes to NICE processes over the last 18 months, including the introduction of the Budget Impact Test, the use of a cost-effectiveness threshold when assessing medicines for very rare diseases and changes to technology appraisal methods to increase NICE’s capacity, all of which industry are yet to see the full impact of. The BIA believes that the potential negative impacts of the proposals set out in the two consultations will be compounded by these broader developments.

Following the EU referendum, the government has consistently stressed the strategic importance of the UK biopharmaceutical sector to the UK’s future prosperity. However, the changes proposed in these two consultations, and broader developments affecting UK life science companies, go against this and suggest government believes that there is no link between an internationally-competitive medicines access environment and investment in the UK. This is in direct contrast to sentiments expressed in the Life Sciences Industrial Strategy and the Accelerated Access Review, both of which government have committed to implementing in full. In conjunction with broader developments, the proposals set out in these consultations are likely to result in a poor commercial environment which, when further exacerbated by the complications of Brexit, will reduce the attractiveness of the UK as a place for bioscience companies to do business. The BIA is calling on the government to take in to account the collective impact of broader developments, including Brexit, on the UK’s life science ecosystem when deciding how to take the proposals set out in these two consultations forward. Government needs to be consistent and transparent about its ambitions for the sector and ensure its actions on the UK’s commercial environment for biopharmaceutical companies match its rhetoric.

Our response to the consultation on the Statutory Pricing Scheme is available here

Our response to the consultation on the introduction of charging for NICE technology appraisals is available here

 

Rachael Stewart

Policy and Public Affairs Manager
BioIndustry Association (BIA)
 

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