“Uncertainty has hit pharmaceutical manufacturers and patient access to therapies as the UK government increase the VPAS payback rate,” says Ally Robert, Associate Director. In this update, Ally summarizes the key differences between the VPAS scheme and the statutory scheme, and suggests two mitigating actions that manufacturers could take to reduce the impact of high rebates on patient access to therapies.
This is an extract from an ISPOR Europe 2023 poster by the experts at Avalere Health. Please get in touch for a conversation about leveraging these insights in your market access strategies.
Why would leading manufacturers consider quitting the VPAS scheme?
The UK has two regulatory schemes for pharmaceutical pricing: statutory and voluntary. Each of these dictates the rebates drug manufacturers must pay to receive reimbursement through the healthcare system. The VPAS scheme allows manufacturers more flexibility and better contracted terms than the statutory scheme.
However, the UK government’s recent increase to the VPAS payback rate to 26.5% sent shockwaves throughout the industry with leading manufactures announcing they would quit the voluntary scheme in the wake of the increase, while others suggested they would reduce their UK footprint due to difficult market conditions.
This has led to uncertainty on what the best path looks like in the UK to maximize patient access whilst minimizing the impact of rebates on margins.
What are major advantages and disadvantages of each scheme in the current UK pharmaceutical sector?
Experts from Avalere Health conducted a targeted literature search to analyze variations in repayment percentage and average rebate under each scheme. They considered the major advantages and disadvantages of each scheme in the current UK pharmaceutical sector.
Currently, VPAS covers a substantial proportion of UK pharmaceutical sales. The major advantage of VPAS is that repayment percentages have historically been lower than those under the statutory scheme. Additionally, members of VPAS are given the opportunity to consult directly with the government and negotiate on the terms of the scheme.
However, the cumulative effect of a deferred increase to VPAS (expected this year) and the continued growth of NHS spending on branded medicines means that the current forecasted VPAS repayment percentage could be higher than the current repayment percentage under the statutory scheme.
Considerations for reducing the impact of high VPAS rebates on patient access to therapies
Two potential mitigating actions that companies could take in the UK to reduce the impact of high rebates include hopping between the two schemes to maintain the most favorable rate, and de-branding their products to take sales beyond the scope of either repayment scheme.
Get in touch for a confidential conversation
Please get in touch with us if you would like to discuss the points raised in this summary and find out how Avalere Health can help you navigate the evolving policy, access, value, and evidence landscape in the UK and globally.