Yesterday I took part in a discussion on the BBC Today programme on the cost of medicines, together with Roy Lilley, health consultant. This coincided with a new forecast we released with the help of the Office of Health Economics.

 

I wanted to emphasise two points in particular from the findings – firstly, our spending on medicines is low and firmly under control. Secondly, the NHS’s spending on branded medicines – in simple terms our newest and most innovative treatments – is set to decline significantly in real terms over the next three years. This second point became the focus of our discussion, and is a major concern for me because if new medicines are not bought by the NHS, patients health outcomes suffer and there is much less revenue to research and develop new treatments.

There are a few issues I would like to address which were raised by Roy Lilley and Earl Howe, Department of Health Minister, who spoke later in a separate interview.

To start with, were the concerns I raised on the Today Programme about low spending on innovative medicines simply “special pleading” from industry? That was how it was put to me. Well, besides being a bit simplistic, I don’t think it is right to pose it like this. If the system doesn’t spend on the new medicines that our industry produces, we will be unable to make sufficient returns that can then be invested back in to the discovery of new treatments.  The NHS simply could not function without our medicines, which touch the lives of everyone.  This can hardly be described as special pleading.

Later, Earl Howe acknowledged the importance of our industry, and I would like to thank him for his continued public support. However, he did go on to say that pharmaceutical companies have a medicine under patent for around twenty years, and this in his view, was enough time to make a healthy return on investment. While it is true we have patents for that length of time, I think it is important that we make clear that on average, for the first ten to twelve years of this period, the medicine is being researched and developed, and is not on the market generating revenue. The R&D process costs over £1bn and typically only one in every 5,000 compounds ever actually makes it to patients. Our industry is a high risk one and we have to generate funds from today’s sales of medicines to continue investing in research and development.

Secondly, it is not yet clear to us how value-based pricing (VBP) will help improve uptake of the newest and most innovative medicines as Earl Howe claimed. In fact it could inadvertently create a whole new layer of additional bureaucracy which will slow down the time it takes for new treatments to reach patients. Using VBP as a means to force medicine prices down, as was suggested, would neither solve the problem of uptake nor support industry in researching and developing new medicines.

Our forecast is both comprehensive and thorough and I don’t think the criticism levelled at it or our case for greater spend on new medicines have any real grounds. I will be making this point again and again, loud and clear in the coming months – spending on medicines in the UK is under control and the system is still spending less on innovative treatments than it should be.


Stephen Whitehead
ABPI Chief Executive

 
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