NHS England: Commercial Framework for 2020

January 15, 2020

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The Voluntary Pricing and Access Scheme (VPAS) triggered NHS England to publish a framework describing their commercial approach to branded medicine. This article covers the objectives, responsibilities, and commercial options presented in the draft. 

The Pharmaceutical Price Regulation Scheme expired at the end of 2018, and was replaced by the Voluntary Pricing and Access Scheme (VPAS) as the new agreement between the Department of Health and Social Care and the Association of the British Pharmaceutical Industry. VPAS aims to create some stability in an environment of uncer-tainty through incentivized innovation, fairer access, and greater affordability. It committed NHS England (NHSE) to publishing a framework setting out their approach for commercial activity in relation to branded medicine, and a draft was issued in November.

The draft framework describes how NHSE, the National Institute for Health and Clinical Excellence (NICE) and pharmaceutical companies could work together flexibly to support rapid patient access and fair funding for clinically and cost-effective branded medicines.

Role, responsibilities and commissioning route 
NHSE is expanding its influence and increasing collaboration with NICE. NICE will be responsible for clinical and cost-effectiveness assessment of all new indications (with a small number of exceptions), while NHSE will decide if commercial arrangements can support mitigating economic issues (including cost-effectiveness and affordability), if any.

Commercial options
The framework supports NHSE and pharmaceutical company collaboration on identifying commercial solutions for affordability challenges: 

  • Patient Access Schemes (PAS): Simple, confidential discounts remain the preferred option and must be consistent across indications. Only when discounts have been demonstrated unsuitable should a more complex non-confidential PAS be considered. 
  • Confidential Commercial Agreements (CCAs): NHSE will consider CCAs on a case-by-case basis in the two following circumstances: 
    • Companies wanting to enhance their value-offer (e.g., value at or below the lower end of the standard NICE threshold or other applicable thresholds). The framework confirms openness to financial schemes such as budget capping, price-volume agreements, risk-sharing, and outcomes-based agreements. 
    • Unusual and unique circumstances when a launch is considered particularly challenging or commercially unviable (i.e., when there is clear differentiation in health gain between indications, significant loss in revenue without commercial flexibility, and the impossibility of recovering from revenue loss in later years). By not clearly defining those elements, the discretionary terms on which NHSE decides on offering a CAA are retained. 
  • Managed Access Agreements (MAAs): MAA should be considered if there is a plausible potential for a drug to satisfy the criteria for routine commissioning but clinical and financial uncertainty remain. A time-limited data collection agreement is added to the PAS or CAA and treatment is offered at a cost-effective price for the duration of the MAA. 
  • Budget impact test: Even if a medicine is cost-effective, costs greater than £20 million in any of the first three years of launch will result in NHSE engaging in commercial negotiation to address affordability.

Next steps
Overall, the draft framework emphasizes the increasing influence of NHSE and signals that complex commercial schemes will likely be more frequent going forward. The finalized framework is expected in early 2020 and feedback can be provided until January 10th, 2020.

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