News

HDA UK Media and Political Bulletin – 10 May 2021

Media Summary

NHS to ‘scrutinise’ 44 pharmacies’ pandemic delivery service claims
Chemist and Druggist, Valeria Fiore, 7 May 2021

The Chemist and Druggist (C+D) reports that the NHS Business Services Authority (NHS BSA) is investigating 44 pharmacies which submitted more claims for the pandemic delivery service than anticipated.

The PSNC published a statement on its website on 6 May 2021 which said that the “post-payment verification process” will be carried out for the “advance service component” of the pandemic delivery service.

More than 8,000 pharmacies have offered deliveries under the advanced arm of the service between April and December 2020, “at a cost of just under £15 million”, according to PSNC.

While most of the claims submitted by pharmacies “were at levels to be expected”, a “very small number were higher than might be expected”, PSNC said.

This was also reported by Pharmacy Business.

Patent Waivers Won’t Impact Big Pharma’s Bottom Line—But Could Slow Covid Vaccine Rollouts
Forbes, Alex Knapp, 7 May 2021

Forbes reports that patent waivers will not impact pharmaceutical companies’ revenues as initially expected, although they could slow down Covid vaccine rollouts.

The Biden Administration’s commitment to temporarily waive protection of intellectual property (IP) rights for Covid vaccines during the pandemic was intended to boost production and accelerate vaccine distribution.

Pharmaceutical groups immediately condemned the move, and share prices plummeted accordingly.

However, Wall Street analysts at Morgan Stanley, Jefferies and Brookline Capital Markets, said in reports this week that waiving vaccine IP was unlikely to impact the financials of major vaccine makers, noting that current bottlenecks in vaccine production are related to supply chain, technical knowledge and difficulty in scaling up production.

Moderna CEO Stéphane Bancel said waiving IP rights would have a limited impact on his company, as  it would take months or even years for other companies to scale up manufacturing.

Vaccine manufacturer Novavax stated its opposition to the WTO waiving patents in a press release, arguing that doing so “could further constrain resources by diverting them to entities incapable of manufacturing safe and effective vaccines in the near term.”

A spokesperson for Morgan Stanley also said that waivers could be counterproductive and slow down vaccine manufacturing, creating shortages and disruptions in the supply chain issues.

Parliamentary Coverage

There was no parliamentary coverage today.

 Full Coverage

NHS to ‘scrutinise’ 44 pharmacies’ pandemic delivery service claims
Chemist and Druggist, Valeria Fiore, 7 May 2021

The NHS Business Services Authority (NHS BSA) is writing to 44 pharmacies that submitted a higher-than-expected number of claims for the pandemic delivery service, PSNC has said.

The “post-payment verification process” will be carried out for the “advance service component” of the pandemic delivery service, the Pharmaceutical Services Negotiating Committee (PSNC) stated in an update on its website yesterday (May 6).

Introduced in April last year for extremely vulnerable patients who were self-isolating as a result of the COVID-19 outbreak, the service is currently available until June 30 for people who have been notified of the need to self-isolate by NHS Test and Trace.

More than 8,000 pharmacies have offered deliveries under the advanced arm of the service between April and December 2020, “at a cost of just under £15 million”, according to PSNC.

While most of the claims submitted by pharmacies “were at levels to be expected”, a “very small number were higher than might be expected”, PSNC said.

“NHS England and NHS Improvement (NHSE&I) has decided to scrutinise these,” PSNC added.

NHS BSA will carry out these checks, and it “is in the process of writing to the 44 pharmacies identified to date”.

NHS BSA confirmed to C+D that it is currently “engaging” with 44 contractors across England.

“Contractors may be requested to provide evidence to substantiate their claims,” it added.

Potential reasons for higher-than-expected claims

In some cases, contractors might have claimed more in error, or “for the delivery of medicines dispensed by another pharmacy”, PSNC said.

“PSNC has been consulted on the proposed verification process and has sought to ensure the process is appropriately targeted, proportionate and fair to those contractors asked to provide records, as well as fair to the commissioner and public purse,” the negotiator added.

Contractors who are contacted by NHS BSA should liaise with them directly, but PSNC can offer support, it said.

C+D reported last month that the NHS Counter Fraud Authority is reviewing “some possible threats and vulnerabilities within the pandemic delivery service”.

In response to a written question in parliament, pharmacy minister Jo Churchill said on March 23 that pharmacy contractors and dispensing doctors had claimed for 3,477,259 deliveries to shielded patients between April and December 2020.

Patent Waivers Won’t Impact Big Pharma’s Bottom Line—But Could Slow Covid Vaccine Rollouts
Forbes, Alex Knapp, 7 May 2021

On Wednesday, the Biden Administration stated that it would support a proposal to temporarily waive protection of intellectual property (IP) rights for Covid vaccines during the pandemic, in a bid to boost production and accelerate vaccine distribution throughout the world. Industry trade groups immediately criticized the move, and investors reacted simultaneously—share prices plummeted, though they’ve been slowly recovering Thursday and Friday.

Wall Street analysts at Morgan Stanley, Jefferies and Brookline Capital Markets, however, said in reports this week that waiving vaccine IP was unlikely to impact the financials of major vaccine makers, noting that current bottlenecks in vaccine production are related to supply chain, technical knowledge and difficulty in scaling up production. However, they caution that for the same reason, waivers could slow down current production by disrupting the market for raw materials.

“Manufacturing supplies, raw materials, vials, stoppers and other key materials are in limited supply for 2021, and certainly for the 2021 calendar year,” wrote analysts from Jeffries, meaning that waivers can’t solve immediate vaccination needs in India and South Africa, where Covid-19 cases are surging. That report also notes that the mRNA vaccines from Pfizer and Moderna have yet to be authorized for use in India, as regulators desired local clinical trial data, which is another hurdle to overcome.

Morgan Stanley commented that U.S. support alone doesn’t necessarily mean that a World Trade Organization agreement on the waiver would happen, especially since Germany has expressed opposition. The firm additionally notes that “manufacturing vaccines is a much more complicated process than making chemical drugs, and a patent waiver by itself would not enable other entities to manufacture their own copies of complex vaccines.”

Jefferies analysts also remarked that another barrier to increased vaccine production is “ensuring the quality of the product, which is also not trivial.” Contractors for vaccine makers Pfizer, AstraZeneca and Johnson & Johnson have all run into quality-control issues that have led to millions of vaccine doses being discarded.
On a company earnings call yesterday, Moderna CEO Stéphane Bancel said he doubted that waiving IP rights would impact his company much, because it would take months or even years for other companies to scale up manufacturing. Meanwhile, the biotech company has recently committed to expanding its own manufacturing capacity and expects to be able to make up to 3 billion doses of vaccine in 2022.

Morgan Stanley analysts noted that in October 2020, Moderna “stated it would not enforce its patents during the pandemic, but to our knowledge, no one else has started manufacturing a vaccine that would violate Moderna’s patents.” The team at Brookline Capital markets noted that if a company did begin manufacturing vaccines based on Moderna’s patents, the upside would be an additional licensing revenue stream for the company.

On Friday, vaccine manufacturer Novavax, which has reached an agreement with the private-public global health partnership Gavi to provide 1.1 billion vaccine doses to low income countries, stated its opposition to the WTO waiving patents, arguing that it “could further constrain resources by diverting them to entities incapable of manufacturing safe and effective vaccines in the near term.”

Jeffries analysts note that a waiver wouldn’t put Novavax at immediate risk, as a key component of the company’s vaccine “is in limited supply and a majority of the raw material has already been locked up” by the company.

That said, Morgan Stanley struck a similar point to Novavax about the risk involved in waiving patents. The analysts point out waivers could be counterproductive and actually slow down vaccine manufacturing. “An IP waiver now may exacerbate supply issues,” they write, “if some countries start to try to secure raw materials ahead of being able to produce a vaccine and cause shortages and disruptions in the supply chain.”

HDA UK Media and Political Bulletin – 10 May 2021

From Factory to Pharmacy

As part of our mission to build awareness, understanding and appreciation of the vital importance of the healthcare distribution sector, we developed an infographic explaining the availability of medicines. It identifies the factors that can impact drug supply, as well as the measures that HDA members undertake day in, day out to help mitigate the risks of patients not receiving their medicines.

See the Infographic

Apply to become a Member

Membership of the HDA guarantees your organisation:

  • Access to leading policy and industry forums of debate and discussion
  • Invitations to a range of networking industry events organised through the year, including an Annual Conference and a Business Day
  • Representation on HDA working parties, including the Members’ Liaison Group
  • A daily Political and Media Bulletin and HDA Newsletters
  • Access to HDA policy documents and all sections of the HDA website
  • Branding and marketing opportunities
Apply Now

Already a Member?