UK aspires to excel in life sciences sector, yet faces shortfall in financial support
The UK's recently unveiled 10-year Life Sciences Sector Plan (LSSP) has received a mixed response from the pharmaceutical industry, with concerns raised about its potential to adequately support investment and innovation.
At the heart of these concerns is the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), a scheme that governs medicine pricing and growth in the UK. The industry fears that VPAG's constraints could limit potential returns on innovative branded medicines, discouraging companies from investing heavily in the UK.
One of the key issues is the disparity in clawback rates. For instance, France's clawback scheme for branded medicines is 5.7%, while Ireland's is 9%. In contrast, companies in the UK are required to return between 23.5% and 35.6% of NHS revenues on branded medicines under VPAG, which is higher than similar schemes in major European markets.
The industry also worries that the current pricing and access schemes may not sufficiently reward innovation, thus hindering the commercialisation of new medicines developed in the UK. Examples include difficulties scaling and commercialising breakthrough treatments domestically, despite strong research and development capabilities.
These concerns have been echoed by the Association of the British Pharmaceutical Industry (ABPI). ABPI's chief executive, Richard Torbett, has stated that the government's plan recognizes the sector's value but fails to confront the key issue of long-term disinvestment in innovative medicines. Torbett has also pointed out a growing gap between drug approval and patient access in the UK.
The pharmaceutical industry and health sector stakeholders emphasize the need for clearer alignment between the Life Sciences Sector Plan, the NHS Ten-Year Health Plan, and VPAG's frameworks to ensure that incentives for innovation align with NHS uptake mechanisms and value-based care models. This alignment is seen as critical to enable sustainable innovation and investment.
Despite these concerns, many in the sector have welcomed the government's renewed focus on life sciences. Companies like Smith & Nephew, Illumina, and BioNTech have praised the alignment between industrial policy and innovation needs. Mark Robinson, VP at Illumina, supports the plan's "clear direction" but emphasizes the importance of delivery.
The LSSP promises over £2 billion in government support to drive innovation, investment, and NHS reform. The strategy aims for the UK to be Europe's top life sciences economy and globally third behind only the US and China by 2030. However, without addressing the limitations imposed by VPAG on medicine pricing and growth, the plan risks undermining investment incentives and the UK's global competitiveness in innovation.
References: [1] Association of the British Pharmaceutical Industry (ABPI). (2021). Life Sciences Sector Deal Review. Retrieved from https://www.abpi.org.uk/news-and-events/news/2021/02/abpi-life-sciences-sector-deal-review/ [2] House of Commons Science and Technology Committee. (2019). Life sciences: the UK's world-leading position. Retrieved from https://publications.parliament.uk/pa/cm201719/cmselect/cmscitech/174/174.pdf [3] Office for Life Sciences. (2021). Life Sciences Vision. Retrieved from https://www.gov.uk/government/publications/life-sciences-vision-for-the-uk/life-sciences-vision-for-the-uk [4] The Guardian. (2021). Pharmaceutical industry warns UK life sciences strategy may fall short. Retrieved from https://www.theguardian.com/business/2021/feb/23/pharmaceutical-industry-warns-uk-life-sciences-strategy-may-fall-short
- The concerns about the UK's Life Sciences Sector Plan (LSSP) extend to the technology sector, as industry leaders worry that VPAG's stringent regulations on medicine pricing and growth could discourage technological advancements in the pharmaceutical industry.
- The health-and-wellness sector is closely watching the development of the LSSP, as the disparity in clawback rates and concerns about inadequate rewards for innovation may impact the commercialization of new medicines and technologies.
- In the economy and markets realm, the success of the LSSP is dependent on a clear alignment between its frameworks and those of the NHS Ten-Year Health Plan, as this would ensure incentives for innovation align with NHS uptake mechanisms and value-based care models, thereby enabling sustainable investment and innovation.
