"What are your views on value-based pricing?" That is the question I've probably been asked more than any other since I took over as Chief Executive three months ago.
In this week’s Daily Telegraph, my views on the subject appeared for the first time.
Plain and simply, I think a value based approach to pricing medicines is a good thing. I welcome any move that will take into account the full range of benefits medicines deliver, including wider societal benefits. In short, more comprehensive value assessments is something I support.
But I also hold the Pharmaceutical Price Regulation Scheme (PPRS) in particularly high regard and I know from speaking with industry colleagues that they do to. In fact, it is so highly valued that I can say, clearly, for the first time, that we should not get rid of a system that has served the Government and industry so well over the last 50 years. But I think it is important to state why I value the PPRS so much, before addressing how value-based pricing (VBP) should fit with our aim of retaining the current scheme.
The key strengths of the PPRS, as I see them, are minimal bureaucracy, a single holistic system that spans all nations in the UK, stability, flexibility, and freedom of pricing at launch. I’ve expanded on each of these points below:
The PPRS simply has too much going for it, and scrapping it for the sake of a new VBP system would risk throwing out the baby with the bath water. But running VBP parallel to the existing PPRS is simply not practical - that is why our solution needs to be incorporating VBP in to a single, holistic, integrated, voluntary and negotiated scheme. This allows the strengths of the PPRS to be retained, while its inherent flexibility can be used to include a broader definition of value for the assessment of new medicines.
Ultimately, I think patients will be better served with a single agreement in place, allowing for a stable environment in which innovation can thrive and medicines are available early.
Stephen Whitehead, CEO of the ABPI