The Department of Health and Social Care (DH) will cover the cost of the UK’s drug pricing deal with the US, science minister Lord Patrick Vallance has confirmed.
In a letter dated January 30 and published this week, Vallance said the DH, NHS England (NHSE) and the National Institute for Health and Care Excellence (NICE) had “produced a joint analysis to estimate the cost impact” of the deal.
The analysis found that the “deal commitments will cost around £1bn in England over the remaining three years of the spending review”, he added.
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He said the bill “will be funded by allocations made to DH at the spending review, where front-line services will remain protected through the record funding secured”.
And he added that it “is a vital investment that builds on the strength of our NHS and world-leading life sciences sector to increase access to life saving medicines across the NHS”.
What’s the deal?
The UK-US pharma deal, announced in December, makes the UK the “only country in the world to secure a zero percent tariff” on pharmaceutical exports to the US.
The government said UK medicines will be exempt from US tariffs “for at least three years”, and there will be “no additional new tariffs” on UK medtech exports.
It also committed to investing “around 25% more in innovative, safe and effective treatments” under the deal, and secured “mitigations under the US’s ‘most favoured nation’ drug pricing initiative” so that it can “continue to ensure access to the latest treatments”.
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Vallance said the final costs associated with the deal “will depend on future growth in spending on medicines, which in turn depends on factors including the medicines NICE approves as well as the NHS uptake of these products”.
“This is not something we can accurately model at this time as it will depend on which drugs come to market and which are approved for use in the NHS accordingly,” he added.
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He said the government “is committed to accelerating spending on innovative medicines over the next 10 years to bring it back to historical levels” - and that the cost of this “depends on assumptions about future growth in underlying medicines spend, the NHS budget and GDP”.
“Future funding will be settled at the next spending review.”
“Significant cost”
Science, Innovation and Technology Committee chair Dame Chi Onwurah said “greater transparency” on the UK-US drug pricing deal “is vital to give much-needed confidence and clarity to the NHS, the public and to the life sciences sector”.
“This deal carries a significant cost and it is up to the government to ensure that it delivers significant return,” she added, and “it is crucial that the benefits to UK patients outweigh the projected financial cost, particularly given the huge existing demands on the NHS”.
“As the deal progresses, domestic health and life sciences policy must remain the priority - not the interests of US pharmaceutical companies.”
Concerned
NHS Confederation director of policy Dr Layla McCay said that while NHS leaders “will be reassured to hear that frontline NHS service budgets will not be raided to fund” increased drug prices, they will “also be concerned to note that, against an already very challenging financial environment, DH budgets will be used”.
She added that it “also remains unclear which planned DH spending will need to be cut to cover the costs of higher medicines spending”.
“Against rising demand for care and huge pressure on all parts of the health service, any increases in medicines spending paid for through either NHS or DH central pots must not adversely impact the quality of health service provision”, she said, “or force health care leaders into making further difficult choices of where to pare back patient care”.
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It comes after a new report by the House of Lords found that medicine supply issues “are not prioritised as the potential national security issue that they represent given the significant risk to people’s health”.
The DH instead “focuses on reactive actions when shortages have already occurred”, it said, and “does not effectively communicate shortages, or solutions, to frontline staff such as pharmacists and GPs”.
