HDA UK Media And Political Bulletin – 13 June 2017

Conservative calamity could lead to Softer Brexit

Pharmaphorum, Andrew McConaghie, 12 June 2017

 

Pharmaphorum discusses the implications of the loss of a majority by Theresa May’s Conservative party on the future of Brexit, with its new political partners and its own ministers said to be calling for a much softer Brexit. Theresa May had promised that ‘no deal was better than a bad deal’ but this hard approach is seen as less likely in this recomposed political environment. While this ‘softer’ approach was welcomed by the pharmaceutical industry, an ABPI spokesperson played down the importance of the recent political events. He said the industry organisation had always supported a ‘pragmatic’ approach to the challenges of Brexit, and said the government had (in principle) pledged to support its calls for a ‘free and frictionless’ border and open access to talent in highly skilled industries, such as pharma.

 

Hung parliament: who will pharma negotiate with on new PPRS?

Pharmaphorum, Leela Barham, 12 June 2017

 

The UK General Elections and subsequent hung parliament have resulted in the delay of negotiations for the replacement of the 2014 Pharmaceutical Price Regulation Scheme (PPRS). Pharmaphorum reviews the different political scenarios likely to unfold in the coming months. Given the current uncertainty, the pharmaceutical industry should prepare itself for all possibilities when it comes down to negotiating the final agreement on the successor to the 2014 PPRS.

 

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There is no Parliamentary coverage today.

 

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Conservative calamity could lead to Softer Brexit

Pharmaphorum, Andrew McConaghie, 12 June 2017

 

The loss of a parliamentary majority by Theresa May’s Conservative party has cast doubt on the future of Brexit, with its new political partners and its own ministers said to be calling for a much softer Brexit.

 

While the Conservatives are still the biggest party within the House of Commons, it has been forced to call on Northern Ireland’s Democratic Unionist Party (DUP) to help it create a workable majority.

 

While the ‘confidence and supply’ deal between the two parties hasn’t yet been finalised, the DUP is known to want a much ‘softer’ Brexit than that originally proposed by Theresa May.

 

The Unionists, led by Arlene Foster, want to minimise the impact of Brexit on Northern Ireland and its relationship with the Republic of Ireland – which will signal a need for a much less hardline approach to the forthcoming Brexit negotiations with the EU.

 

Theresa May had promised that ‘no deal was better than a bad deal’, but this hardline approach must now be jettisoned.

 

Thursday’s calamitous result has also left May hugely weakened within her own party, and the Prime Minister has already signalled a move towards conciliation with pro-European MPs.

 

Sir Michael Fallon, the defence secretary is among those in the Conservative party publicly exerting pressure for a re-think on Brexit.

 

He told the BBC’s Andrew Marr Show yesterday: “We want to work with business on this. It is very very important that we are careful about the existing trade we do with Europe, about access to the single market in whatever new arrangement that we come to.”

 

ABPI response

 

So what might this mean for the UK pharmaceutical industry?  While the sector had vehemently backed the ‘Remain’ vote in last year’s referendum, it has largely come to terms with the prospect of Brexit.

 

Nevertheless, the idea of the government taking a more flexible, ‘softer’ approach to Brexit will undoubtedly be welcome in the industry, as the sector has always made it clear it wants to remain as closely aligned with the EU as possible.

 

A spokesman for the ABPI played down the significance of this latest political drama, however.

 

He said the industry organisation had always supported a ‘pragmatic’ approach to the challenges of Brexit, and said the government had (in principle) pledged to  support its calls for a ‘free and frictionless’ border and open access to talent in highly skilled industries, such as pharma.

 

Nevertheless, the shock election results will have a long-lasting impact on UK politics and Brexit – with many betting that a new election won’t be far away.

 

Even if May manages to cling on to power, there could be significant delay to Brexit and many other areas of government policy, such as the Life Sciences Industrial Strategy.

 

The first sign of that disruption came today, when it emerged that the Queen’s Speech, which sets out the government’s legislative programme, has been delayed.

 

The Queen’s Speech had been scheduled for Monday 19 June, but will now be delayed by a few days in order for  the Conservatives and the DUP to agree on a legislative plan – with several manifesto pledges expected to be watered down or abandoned.

 

Finally, May has announced a partial reshuffle of her cabinet, including the return of Michael Gove and Damien Green, the latter being a well known pro-European MP.

 

New appointments will also be needed at the Department of Health, as two junior ministers, MPs Nicola Blackwood and David Mowat, both lost their seats.

 

Jeremy Hunt, who has been the health secretary since September 2012, will remain in the post.

 

Hung parliament: who will pharma negotiate with on new PPRS?

Pharmaphorum, Leela Barham, 12 June 2017

 

Negotiations for the replacement to the 2014 PPRS should be underway, but the recent UK election, and subsequent hung parliament, mean they are delayed. Leela Barham highlights the names of those – on all sides of the political spectrum – who could influence the makeup of the new scheme.

 

The results are in from the UK’s General Election: a hung parliament. It may not be what the Conservatives expected, nor what Labour hoped for, and the Liberal Democrats are probably pleased to have gained seats, but they never expected to win. However, the hung parliament does not give certainty over key issues that will affect the pharma industry in the next five years.

 

Another election?

 

If the Conservatives form a new minority government, another election could still happen, as they will be on shaky ground. Having lost their previous majority, losing 12 seats and falling short of the 326 seats needed for a majority, Theresa May is looking to make a deal with the Democratic Unionist Party (DUP). DUP secured 10 seats, and adding their backing would provide a narrow majority in the House of Commons.

 

Commentators have already noted that the UK history of minority governments is fragile. The Economist points out that the normal pattern is for a minority government to limp along for a short period and then collapse. The result is a return to the polls.

 

Industry must know the key players across parties – just in case

 

Given the uncertainty about how long a new Conservative government could last, industry will need to be ready to sit down opposite whatever colour of government will be in place when it comes to negotiating, and, crucially, putting the ink to the final agreement on the successor to the 2014 Pharmaceutical Price Regulation Scheme (PPRS). The PPRS is a voluntary agreement and represents a key opportunity for industry to table its wishes with government.

 

Negotiations usually start around 18 months before the end of the current scheme and, with the 2014 PPRS due to end on 31 December 2018, we are firmly in renegotiation territory now. The delay has probably been driven by the snap election.

 

If a new government only lasts for 12 months, who sits opposite the industry at the table could change.

 

It also means that a new PPRS is likely to be negotiated, uncomfortably, alongside Brexit.

 

On the blue team

 

If the Conservatives stay in power – at least for a while – some of the key players will be familiar to industry.

 

Despite some suggestions that Jeremy Hunt might go, he retained his seat and was kept on as Secretary of State for Health in yesterday’s cabinet reshuffle. Philip Dunne, Minister of State for Health, kept his seat too.

 

Nicola Blackwood and David Mowat, Parliamentary Under Secretary of State for Public Health and Innovation and Parliamentary Under Secretary of State for Community Health and Care both lost their seats. Blackwood had previously been given particular responsibilities for genomics, data and digital health and emerging health technologies.

 

It is not only those Ministers responsible for health that (should) play a role in the PPRS, but also Ministers at the Department for Business, Energy and Industrial Strategy (BEIS), given the importance of industrial policy.

 

All of the Ministers at BEIS kept their seats. Of note for industry is Jo Johnson, Minister of State for Universities, Science, Research and Innovation.

 

Industry may hope for a return of the post of Minister for Life Sciences. This could help pull together responsibilities that affect the industry, which is perhaps needed now more than ever.

 

On the red team

 

Industry will also need to know who may step in should an election happen during the PPRS negotiations. Labour’s Shadow Secretary of State for Health, Jonathan Ashworth, kept his seat. So too did Rebecca Long-Bailey, Shadow Secretary of State for BEIS.

 

On the yellow team

 

The new normal is that anything can happen in politics. So, despite the Liberal Democrats ruling out a coalition in the run up to the 8 June election, they could play a role if another election were to take place before the end of 2018.

 

Norman Lamb is the Lib Dems’ Shadow Secretary of State for Health. He retained his seat this time, and he was previously Minister for State for Health from September 2012 to May 2015 under the Conservative-Liberal Democrat Coalition government.

 

Lord Don Foster is the Lib Dem Shadow Secretary of State for BEIS, and as he is in the Lords, his position is unchanged since the 8 June election.

 

On the DUP team

 

A hung parliament was not a surprise to everyone, but the Conservatives partnering with the DUP is probably a surprise to most. Jim Shannon is the DUP spokesman for health and he retained his seat. David Simpson is the DUP spokesman on business, innovation and skills and he too retained his seat.

 

Behind the scenes, power brokers remain

 

In the fallout from the hung parliament, whatever colour of government finally signs up to whatever succeeds the 2014 PPRS, some key power brokers will remain. These are not only the civil servants at the Department of Health (DH) who have been working on the PPRS for years, but also key players including Her Majesty’s Treasury (HMT) and staff from NHS England and NICE. They will have influential voices, even if they are not formally at the negotiating table, alongside staff from the devolved nations.

 

Industry must ensure that it builds and maintains relationships like these, as they may offer the ‘strong and stable’ element that Theresa May has failed to deliver to date.

New UK law to control generic drug prices – implications for pharma

Pharmaphorum, Charlotte Tillett and Astrid Arnold, 7 June 2017

 

The UK’s Health Service Medical Supplies (Costs) Act 2017 obtained royal assent in the ‘wash up’ before the General Elections taking place today. The Act, which has broad cross-party support, clarifies and extends the Government’s powers to regulate the cost of medicines and medical supplies and to collect sales and pricing information. It provides extensive statutory powers to require manufacturers, distributors and suppliers of branded and unbranded products to record and supply pricing and sales information. Some have argued that the provision of this level of information will be unfairly onerous for businesses, while the UK Government believes it will enable a more accurate reimbursement price to be set for generic drugs.

 

Meet the GP trying to unseat Jeremy Hunt in the election

C&D, Annabelle Collins, 6 June 2017

 

Chemist and Druggist interviews Dr Louise Irvine about her “track record in terms of being a community activist”. Dr Irvine is one of five candidates being fielded across England by the National Health Action (NHA) Party, originally formed to oppose the government’s 2012 reforms to the NHS. While she concedes that people view the party as a single issue organisation, she says it has a wider point to make. Dr Irvine is standing against Jeremy Hunt in his constituency as she believes that “everything is much worse” than it was during the 2015 election, and attributes some of these failings to Mr Hunt.

 

Parliamentary Coverage

 

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New UK law to control generic drug prices – implications for pharma

Pharmaphorum, Charlotte Tillett and Astrid Arnold, 7 June 2017

 

New UK regulation seeks to clarify and extend the Government’s powers to regulate the cost of medicines and medical supplies and to collect sales and pricing information from pharma. Charlotte Tillett and Astrid Arnold outline the aims and implications of the new drug pricing legislation, the Health Service Medical Supplies (Costs) Act 2017.

 

Charlotte Tillett and Astrid Arnold

 

Drug pricing legislation update

 

The UK’s Health Service Medical Supplies (Costs) Act 2017 obtained royal assent on 27 April in the process known as the ‘wash up’ – wherein legislation is rushed through before a general election.

 

The Act, which has broad cross-party support, clarifies and extends the Government’s powers to regulate the cost of medicines and medical supplies and to collect sales and pricing information. Its primary purpose is to limit the NHS’s spiralling drugs bill: NHS spend on medicines is estimated to have been over £15.2 billion in 2015-16 and, as Secretary of State for Health, Jeremy Hunt, stated, these costs can “only continue to grow”.

 

The Act has three key aims. First, it will allow the Government to ‘beef up’ the statutory price regulation scheme for branded medicines, bringing it more in line with the voluntary Pharmaceutical Price Regulation Scheme (PPRS). Second, it will enable the Government to step in to control dramatic price increases in unbranded generics, an issue which has attracted considerable adverse media attention recently. Third, it will create a comprehensive statutory power to require sales and other information from manufacturers, distributors and suppliers at all levels of the supply chain.

 

Branded medicines

 

Currently, the PPRS covers approximately 80% of branded medicines sales to the NHS. It is a voluntary scheme negotiated between the Department of Health and the Association of the British Pharmaceutical Industry (ABPI), whereby the industry agrees to a variety of measures to control prices and spend. Chief among these is the PPRS payment mechanism, whereby members make payments ‘back’ to the NHS if growth in NHS spend on branded medicines supplied by PPRS members exceeds an agreed percentage. Despite this, the PPRS has not been as successful as the Government hoped in delivering savings to the NHS, thought to be partly because some companies have chosen to move their products out of the PPRS into the alternative statutory scheme, which does not include such payments back, resulting in lower savings for the NHS. The new Act will enable the Government to introduce a payment back into the statutory scheme, with the intention of levelling the playing field between the two schemes and discouraging movement out of the PPRS.

 

New statutory scheme

 

Draft regulations on the new statutory scheme have been published, which are subject to consultation. These include a payment back of a fixed percentage of sales income from relevant medicines. This differs from the payment mechanism in the PPRS in that the payment represents a percentage of both old and new products; under the PPRS, to encourage innovation, products containing new active substances launched after 31 December 2013 are excluded.

 

The draft regulations do not contain any figures, but this point suggests that the statutory scheme will be less attractive to companies with larger portfolios of new products.  It remains to be seen how the two schemes will eventually compare overall and whether, in the long run, two separate schemes will be maintained.

 

Generic medicines

Unbranded, generic medicines fall outside the PPRS and statutory schemes. Reimbursement prices for generics (i.e. the price at which pharmacists dispensing on NHS prescriptions are reimbursed) under the NHS Drug Tariff are generally set by reference to market prices. However, this relies on there being competition in the market.

 

Recently, the media has highlighted a number of instances where, in the absence of competition, the price of an old generic drug has been increased dramatically. Examples include the anti-epilepsy drug phenytoin sodium, the price of which was reportedly increased by up to 2600%, and hydrocortisone tablets where the price of generic 10 mg tablets are reported to have been increased by more than 12,000%. Both have been subject to investigation by the Competition and Markets Authority (CMA)[1].

 

The new Act gives the Government broad power to control the price of unbranded generics and should enable it to step in when an unreasonable price is being charged. This closes a ‘loophole’ in the existing legislation that barred it from controlling the prices of unbranded generics supplied by companies that were members of the voluntary PPRS. The circumstances and manner in which the Government will intervene, and what will be regarded as an unreasonable or excessive price, will be consulted on.

 

Comprehensive information requirements

 

The Act provides extensive statutory powers to require manufacturers, distributors and suppliers of branded and unbranded products to record and supply pricing and sales information. An issue here is that much of the information on generic prices used in setting the reimbursement price is currently provided on a voluntary basis, and not all manufacturers and suppliers participate. The Government’s view is that collection of accurate and comprehensive pricing information, including in relation to discounts, should enable a more accurate reimbursement price to be set. It may also result in the Department of Health becoming aware of any unfair pricing practices at an earlier stage.

 

The information which can be required is, however, detailed and extensive and goes beyond prices to revenues and profits, including costs in making those profits, such as manufacturing, distribution and supply costs. Some have argued that the provision of this level of information will be unfairly onerous. Among other things, the published draft guidelines provide for quarterly returns to be made in respect of unbranded generic products covering prices and quantities, including the identities of buyers and sellers and the terms of any discounts, as well as for information about manufacturing, R&D and operational costs to be recorded and supplied on request.

 

Obligations to provide information also apply to medical supplies. During the passage of the Bill, considerable concern was expressed that the information requirements could prove onerous to the medical technologies sector, which is dominated by small and medium-sized companies. The draft regulations allow small producers – with a total UK turnover of £5 million or less – to provide the information as pre-existing documentation, including invoices, rather than in a form specified by the Secretary of State in relation to other companies.

 

Implications of the Act

 

So, the detail of how the Government will exercise the powers granted in the Act is subject to discussion. What is clear at this stage, though, is that this very short Act has the potential to introduce significant change. All eyes will be on how the balance between the statutory and voluntary pricing schemes for branded medicines evolves in future, and on the approach the Government takes to control excessive generic prices – specifically, how an excessive or unfair price will be identified.

 

The information requirements are equally important. An MP commented during the passage of the Bill: “We cannot underestimate the importance of having more consistent, viable and useful information gathering, because information is power.”

Life sciences companies must now engage during the consultations on the new drug pricing legislation regulations which will govern that power to ensure that legislators and Government understand their legitimate needs on price.

 

[1] In the first case the Competition and Markets Authority (CMA) issued an infringement decision and the case is currently under appeal to the Competition Appeal Tribunal, and in the second the CMA has not yet issued a decision.

About the authors:

Charlotte Tillett and Astrid Arnold work at Stevens & Bolton LLP. Charlotte is IP Partner and Head of Life Sciences, and Astrid is a Professional Support Lawyer.

New Government ‘must be more ambitious in securing a world-class NHS’, says UK pharmaceutical industry

ABPI, 27 April 2017

 

The Association of the British Pharmaceutical Industry (ABPI) published its manifesto for the 2017 UK General Elections this morning calling on the Government to be more ambitious in securing a world-class NHS for patients and improve access to medicines in line with other developed nations. Launched at the ABPI’s Annual Conference in London, this manifesto sets out the industry’s three priorities to improve the use of medicines and grow the UK’s status as a global hub for life sciences and pharmaceuticals including 1. Securing a world-class NHS for patients 2. Securing global investments and jobs and 3. Securing a new relationship with the European Union (EU) that prioritises patients and public health.

 

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Health Service Medical Supplies (Costs) Bill 2016-17

House of Lords, 26 April 2017

 

Consideration of a Commons amendment to the Bill took place in the House of Lords on 26 April. Both Houses agreed on the text of the Bill which now waits for the final stage of Royal Assent when the Bill will become an Act of Parliament. Royal Assent is scheduled for 27 April.

 

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New Government ‘must be more ambitious in securing a world-class NHS’, says UK pharmaceutical industry

ABPI, 27 April 2017

 

The new Government must be more ambitious in securing a world-class NHS for patients and improve access to medicines in line with other developed nations.

 

Launching its manifesto ​for the 2017 UK General Election, the Association of the British Pharmaceutical Industry (ABPI) is calling on the Government elected on June 8th to set out a clear strategy to make NHS patient outcomes the best in the world. This should start by:

 

Increasing healthcare investment in line with the G7 average of 11.3% of Gross Domestic Product (GDP): the UK is currently sixth lowest out of the G7 nations for investment in healthcare, spending 9.9% of GDP. Only Italy invests less.

 

Improving access to medicines, ensuring that the UK is in the top quartile of OECD countries for patient access to new medicines and vaccines by 2022: UK patient access to medicines is poor in comparison to similar nations; in the first year of launch, patients in France and Germany are around five times more likely to receive a new medicine than patients in the UK.

Lisa Anson, new ABPI President (taking over the post on Thursday 27 April) and Country President of AstraZeneca UK, said:

 

“This General Election comes at a critical juncture. Do we want to improve NHS patient outcomes and ensure Britain continues to be a global player in Life Sciences, or run the risk of the UK becoming a desert for healthcare innovation? Patients and voters will expect each party to set out a clear strategy to address this important issue.

 

“The new Government should commit to bringing healthcare investment in line with the G7 average in order to deliver the services and outcomes that British patients deserve. Ensuring that the NHS and Life Sciences industry are at the heart of the new industrial strategy, and Brexit negotiations, is also crucial for securing this ambition.”

 

The manifesto – ‘Securing the Opportunity for UK Life Sciences by 2022’​ – launched today [27 April] at the ABPI Annual Conference in London – sets out the industry’s three priorities to improve the use of medicines and grow the UK’s status as a global hub for life sciences and pharmaceuticals.

 

1. Securing a world-class NHS for patients

 

The ABPI is asking the next Government to commit to improving patient outcomes fairly and consistently throughout the UK, by:

 

Agreeing a new long term, voluntary Pharmaceutical Price Regulation Scheme (PPRS) in partnership with the pharmaceutical industry that ensures patients in Wales, England, Scotland and Northern Ireland receive medicines at the same levels as the best countries in Europe

 

Balancing the need to maintain a strong pharmaceutical industry by rewarding innovation with the need to secure the best value for money for the NHS

Creating a streamlined, National Institute for Health and Care Excellence (NICE)-led, system for the assessment of medicines in England, integrated into a new, voluntary PPRS, which reduces bureaucracy

 

Measuring NHS patient outcomes through a new, independent assessment

2. Securing global investment and jobs

 

The ABPI is asking the next Government to implement a new industrial strategy that cements the UK’s position as a leading global hub for life science, and attract significant new international investment, by:

 

Reaching a target of 3% of GDP spend on research and development by 2022 through a strategic vision for publicly funded science research

 

Attracting global scientists to the UK and enable the UK to collaborate at scale in global scientific projects

 

Improving the global competitiveness of UK medicines manufacturing, through targeted infrastructure investment in advanced manufacturing

 

Ensuring the NHS is seen as a global early adopter of new cost effective medicines and vaccines

3. Securing a new relationship with the European Union (EU) that prioritises patients and public health

 

The ABPI is asking the next Government to negotiate a new relationship with the EU through a phased transition that secures patient access to medicines and protects public health.

 

Mike Thomspon, ABPI Chief Executive, said:

 

“As we leave the EU, the new Government’s agenda will need to set out the UK’s stall in the global marketplace.

 

“This manifesto lays out the pharmaceutical industry’s vision for an NHS that embraces innovation as the route to greater productivity and sustainability, as well as healthier lives for us all. Alongside targeted investments in our science base and making the right choices in Brexit negotiations, we can cement the UK’s position as a leading global hub for our industry.”​

From Factory to Pharmacy

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