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Statutory Scheme Response

Mark Samuels, Chief executive of the British Generic Manufacturers Association (BGMA), said: “As the industry association for generic and biosimilar medicine manufacturers, we welcome that via the statutory scheme consultation, the Government has delivered on its promise to listen to industry and has developed proposals which balance the needs of all stakeholders.

“In particular, the proposal for Lifecycle Adjustment (LCA) is both pro-innovation by rewarding the UK launch of innovative medicines as well as encouraging launch and competition among off-patent generic and biosimilar medicines. BGMA will now seek to work through the proposal with the Department of Health & Social Care as to how it can best work in practice and to mitigate any supply risks in introducing a new way of seeking a rebate from industry.

“The proposal for differentiated rebate levels depending on the market characteristics of the drug matters to patients and the NHS because we must avoid worsening the medicine supply risk. As we have already seen in breast cancer, a one size fits all high rebate rate can make low-priced drugs loss-making and no longer viable to supply. Competition brings the NHS the benefit of the lowest medicine prices in Europe. However, manufacturers cannot afford to pay a soaring rebate on top and therefore, seeing competition recognised within the consultation scheme is heartening.

“We have consistently stated that growth rates, cost pressures and market dynamics are different for on- and off-patent branded medicines. A single rebate rate is simply inequitable. This is already starting to have implications for the supply of medicines, which will worsen over the next five years if the status quo is maintained.

“Therefore, the Government's proposals for a lifecycle adjustment are to be welcomed, and furthermore, they attempt to support new medicines, as well as existing medicines where competition is evident and has been shown to both save the NHS money. These savings are more than Government gets in VPAS payments and will widen treatment access to patients.

“Specifically, the Government has proposed a lower flat rate over the next five years for medicines where the regulator requires a brand name and where competition exists, be that in a branded generic or biologic market. This lower, predictable rate for medicines facing competition and those that have launched in their first year to encourage competition will boost the UK launch and supply of the next generation of biosimilars and branded generic medicines.

“Overall, it is our firm sense that we must move away from the clear inequity and supply risks posed by a one size fits all rate, and there are features we would like to develop through consultation in the Statutory Scheme proposals. The LCA is a potentially bold and creative concept which provides the best way of finding an acceptable agreement for the whole pharmaceutical industry, while meeting the NHS' financial constraints and ensuring patients gain faster, earlier, and wider access to new and existing treatments”.