My Lords, Ladies and Gentlemen it is a pleasure to welcome you all here this evening.

 

As an industry I fundamentally believe that we are undervalued and under recognised. Whilst all other elements of the healthcare system are rightly heaped with praise and treated delicately and carefully, we are all too often treated with suspicion and I never hear the words 'thank you' for what we have done and continue to do.

I will use CEO prerogative to change that tonight. Don’t worry this is not a Paltrow-esque Oscar performance, and in any case this is about YOU not ME.

Firstly I want to thank you in this room for the work that you do every day, that work translates into safe, effective medicines that has dramatically improved the health of billions of people around the world.  

Secondly I want to thank you for underpinning the success of the UK healthcare system. Without what we do and without our discoveries and our investments the healthcare system would have collapsed a long, long time ago.

Think about it, without the advent of H2 antagonists and the PPIs ulcer surgery would be a major drain on NHS resources, rather than another disease area that we can tick off as “sorted” and not just “sorted” but incredibly cheap to manage as the class of medicines has long since gone generic.

Without the advent of atypical antipsychotics the care in the community drive for people suffering with mental illness would not be possible, turn your mind back to those grim mental asylums to understand the transformation. Again most of these medicines are now generic and so incredibly cheap.

And also take Chronic Heart Disease (CHD) ... significant improvements have been made in reducing mortality in CHD with the death rate amongst under 75s falling by nearly a half since 2006. Moreover, the estimated number of lives saved through the use of statins has tripled and rates of premature death from CHD are now lower than ever before ... Around 4 million people are now receiving statins, saving an estimated 10,000 lives every year ...

Heart disease, diabetes, depression, orphan diseases, many cancers, the list is endless and it is the efforts of our industry that have offered hope, improved quality of life and given more years to life. On a personal note my grandmother whom I never met died at the age of 63 of heart disease, the very same disease that my mother suffers from whom at the age of 81 is very much alive and kicking and rapidly spending any inheritance, thanks to a range of heart medication that has given her great quality of life and minimal inconvenience.

Thank you for the billions invested in discovery and development, that risky and difficult process that has escalated in cost and risk over recent years.  Am I exaggerating our contribution? No. 90% of all medicines have been discovered by this industry.

Thank you for holding the faith in the UK, a difficult and challenging environment for innovation, we still account for 10% of global R&D spending despite being only 2-3% of the global market.  We are the biggest spender on R&D in the UK by far – over 35% of R&D spend in the UK economy comes from our industry. Quality jobs, quality output, positive contribution. A £7 billion trade surplus for the UK. Industry support from Government in recent years such as the patent box and R&D tax credits have helped hugely.

Thank you for putting up with negative press, misunderstanding about what we do and at times downright misrepresentation of our practice and policies. The evil pharma yarn is often too easy to spin. I also want to thank those journalists who do make the effort to get it right! Without doubt we have made mistakes, errors of judgement, we have not always got it right and at times our responses, have in my mind, fallen short of ideal. But who hasn’t?  

Let’s look at one specific compelling story that demonstrates our power to change the world. HIV. I want to welcome Sir Nick Partridge from the Terrence Higgins Trust who is with us tonight whose outstanding patient advocacy and willingness to partner with industry accelerated development and adoption and saved millions of lives. HIV was, of course, a new disease seemingly coming from nowhere with potentially terrifying results. There was minimal expectation of a treatment as anti-viral understanding was in its infancy. The industry invested billions and through a rapid process of learning, collaboration and sharing ... developed a range of combination therapies that today are actually available in one pill a day that has transformed this disease into one that can be managed and allows patients to live normal lives. The developing world programmes that are in place ensure that the medicines are available to the poorest nations. Many of the medicines are now generic so again a fairly cheap disease to treat.

The innovation in HIV treatment was paid for by the healthcare systems around the world and here in the UK by the NHS. If the NHS had not been willing to pay for these early treatments then continue to pay for the newer developments in combination, the disease would never have become manageable. And I draw this parallel for one reason only – we must ensure that new medicines for difficult diseases are funded and utilised otherwise we close the door on hope and on conquering more disease. This is why the series of rejections from NICE, the resistance to uptake of innovation in the NHS cause me real concern. If a new cancer medication offers a six-month quality life extension then we must use it to learn and develop. If we don’t adopt, we close the door on hope in several disease areas. Investment in new medicines is an investment in the continuing understanding of disease.

The Innovation Health and Wealth Report from Sir David Nicholson is welcomed and explicitly recognises that there is an innovation deficit that we must address and we have been hugely impressed by the openness and candour with which we have been included as partners. This is a good start.

Now let me turn to the vexed issue of pricing.  Let’s dispel a few myths shall we ...

Myth number one, the UK medicines bill is out of control:

  • There is surprisingly poor understanding of the complex issues around the cost of medicines in the UK. However, the latest PPRS report to Parliament shows us that the UK has amongst the lowest priced medicines in Europe. The UK spends only 0.9% of GDP on medicines – less than the European average of 1.2%....less than we spend on tobacco

Myth number two, NHS spends too much on medicines:

  • NHS spend on medicines is approximately 10% of overall expenditure down from 13% in four years.
  • Of this spend only 10% goes on innovative medicines making the UK the slowest uptake in Europe
  • In fact, the UK is very efficient when it comes to paying for medicines, as around two-thirds of all prescriptions dispensed in the UK are for cheaper generic medicines.

Myth number three, the NHS will not stand to benefit from the patent cliff:

  • In reality, between 2009 and 2015 the NHS will save more than £3 billion because of medicines coming off patent.

It is vital we communicate these messages to all stakeholders as we prepare ourselves for negotiations with Government ... and I am delighted to welcome The Earl Howe here tonight ...

It will not have escaped your attention that this includes a proposal around the concept of value-based pricing (VBP) ...

It is important we discuss this as VBP, which of course, raises several issues about pricing innovation fairly.

Let’s be clear, what we want our next pricing system to look like in order to develop the medicines of the future ... whilst also remembering that from 1 January 2014 100% of value of medicines will be in the next PPRS scheme ...

So it must value and support industry ...

It must reward innovation in all its forms ...

It must give immediate access to innovative new medicines ...

Reduce burden of bureaucracy ... especially for SME’s

The applicability across the four nations of the UK …

And the potential impact on the attractiveness of the UK environment for investment …

I share these concerns but I think it is important we continue to fully engage with government to shape the next pricing environment, and avoid a situation where are left on the sidelines – unable to influence the final outcome…

So that is why at every opportunity when we talk to government we are stressing industry’s need for a pricing scheme that is flexible, holistic, negotiated in a single agreement and which rewards research and development ... and that embraces value ...

The new pricing system should reflect the changing face of industry, the modernisation of industry, our move towards partnerships, externalisation, and joint working that moves us away from the “them and us” buyer seller relationship of the past...

You can see this change at the heart of what we are doing at the ABPI ...

We are pioneering a new model of NHS partnership – we also need to recognise that as an industry we have a huge amount to offer to our partners in addition to our medicines … the bedrock of the healthcare system

This is a core strategic priority for the ABPI which has seen us work collaboratively through joint working in the NHS and with the NHS Confederation to showcase examples to NHS managers through a series of conferences looking at how different disease areas can be tackled in partnership ...

And earlier I announced that the ABPI will be recruiting a new NHS partnerships team.

This team represents a step change in our engagement and will establish strong, sustainable relationships between industry and key regional NHS figures to address a range of healthcare challenges and spur more rapid access and uptake of new medicines…

I am clearly an advocate for our industry, I believe in what we do and I also believe in collaboration and partnership.  It is said that the best a person can do is to first understand and then be understood.  We have started that journey.

Once again thank you for all that you do.

 
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