Euro Roundup: UK government, pharma industry fail to agree on medicines payment scheme

Negotiations between the UK government and the pharmaceutical industry have ended without an agreement on changes to the medicines payment scheme.

ABPI, the UK pharma trade group, has argued that the current Voluntary Scheme for Branded Medicines, Pricing, Access and Growth (VPAG) is in crisis because it imposes an “extremely high payment rate” on companies. The government raised the payment rate to 23.5% of revenues in December, exceeding the 15.9% expected by the industry and the single-digit rates used in countries such as France and Germany.

AbbVie and Eli Lilly left VPAG in 2023, when repayment rates hit 26.5%, but the rate for the statutory scheme that applies to companies that opt out of the voluntary model has a similarly high payment rate. Seeking to resolve the situation, ABPI and the government brought forward a mid-scheme review of the 2024 VPAG agreement. The goal was to find a mutually acceptable way to address the rise in VPAG rates.

ABPI said the industry and government were unable to reach an agreement “despite good faith and best efforts on both sides.” The trade group said negotiators failed to agree on a way to “meaningfully deliver” on the UK government’s ambition for the life science sector and wider economic growth or the industry’s aspiration for improved access to new medicines.

“Specifically, industry and government have not been able to reach agreement on the changes needed to rapidly return the UK to single-digit, internationally competitive payment rates on medicines sales to the NHS, nor address the way in which NICE fundamentally values innovation, for which the standard decision-making parameters have not changed for almost a quarter of a century,” ABPI said.

For too long the “UK has sought to be the place where innovation happens, but not the place where it is used,” said Richard Torbett, chief executive of ABPI. He added that unless that changes, the UK will fail to realize its ambitions in life sciences and “will continue to fall down international league tables for research, investment and patient access to medicines.”

The Financial Times reported that talks ended after UK Health Secretary Wes Streeting sent a private ultimatum to the pharma industry. Streeting reportedly accused companies of “repeatedly” delaying a decision on the government’s “generous” offer and set a deadline for reaching agreement. Pharma CEOs reportedly considered the offer vague and insufficient and let the deadline pass.

ABPI Statement

MedTech Europe warns rules on carbon emissions of imports face significant challenges

MedTech Europe has warned that rules on the carbon emitted during the production of imported goods pose significant technical feasibility challenges to medical device manufacturers.

The EU introduced the Carbon Border Adjustment Mechanism (CBAM) in 2023 to try to put a fair price on the carbon emitted during the production of certain imported goods. CBAM is intended to encourage cleaner production in countries outside the EU. The Commission recently sought feedback on extending CBAM to products further down the value chain.

MedTech Europe published its response to the consultation this week. The response centered on carbon leakage, a term for when manufacturers move production abroad to avoid increased carbon costs in the EU. MedTech Europe said it has no evidence of carbon leakage that would justify the inclusion of medical technologies or components in CBAM. The trade group warned CBAM could deter EU-based production.

“Extending CBAM to medical technology components could even stimulate a risk of ‘manufacturing’ leakage from the EU to non-EU countries as the sourcing of global components would become more expensive for manufacturing operations in Europe, considering that global markets do not compensate for higher manufacturing costs occurring in Europe,” the trade group said.

MedTech Europe said it appreciated the EU’s efforts to simplify CBAM. However, the trade group said the proposed policies will still pose technical challenges to manufacturers because “it is not uncommon for routinely used devices to have hundreds and thousands of different components.” MedTech Europe concluded the administrative burdens and costs will have negative effects on industry and patients.

Press Release

EMA cuts scientific advice turnaround times in pilot of new features for PRIME scheme

The European Medicines Agency (EMA) has reported a 37% decrease in processing times for scientific advice (SA) requests during a pilot of changes to its PRIME priority medicines scheme.

EMA held a two-year pilot program for new PRIME scheme features, including expedited SA. The agency handled 12 expedited requests during the pilot. The average time from scientific document submission to the final advice letter was 50 days, compared to 79 days under the standard pathway. EMA received feedback on how to improve the expedited advice program.

“Developers suggested improvements, such as providing more agile advice outside published timelines and applying expedited SA to initial advice,” EMA said. “Assessors emphasized the importance of preserving active review time to prevent detriment to the advice and recommending increasing predictability of expedited SA requests to facilitate the Rapporteur team participation.”

EMA discussed the findings at a recent meeting with industry representatives. The agency also used the meeting to flag a problem with industry adherence to the pre-payment requirements it implemented for SA requests in January. EMA said there “have been multiple instances of applicants missing pre-payment deadlines.”

The agency took a flexible approach to missed pre-payments in the transition period immediately after the move to the new requirements. That policy ended last month. Going forward, companies that fail to make pre-payments by the pre-set deadline will have their SA applications postponed to the next month.

EMA Report

EFPIA seeks urgent dialogue with European Commission after US erects tariff trade barriers

EFPIA is seeking an urgent dialogue with the European Commission and Member States to “secure the future of the industry in Europe” amid concerns over the impact of US tariffs.

The publication of the US-EU Joint Framework Agreement carved out a lower rate for generic drugs but only capped the tariff on branded pharmaceuticals at 15%. While the tariff is lower than the 250% that President Donald Trump threatened during negotiations, pharma trade group EFPIA expressed concerns about the impact of the planned tax on medicines shipped from the EU to the US.

“Adding barriers to highly functioning and complex supply chains is not a route to national resilience, increased manufacturing or better patient care. They impact our ability to collaborate on discovering new treatments to tackle global health challenges, with billions of Euros diverted away from medical research,” Nathalie Moll, director general at EFPIA, said.

Moll urged the EU and Member States “to secure exemptions for innovative medicines to protect patients and ensure the EU pharmaceutical industry is competitive.” Seeking to make their case, Moll and EFPIA are urgently seeking a strategic sector dialogue with the Commission and Member States.

Press Release

Other news

The UK Medicines and Healthcare products Regulatory Agency (MHRA) has updated its guidance on clinical investigations for medical devices. MHRA added a flow chart and accompanying guidance on the submission of applications to run medical device clinical trials. The flow chart is designed to help sponsors determine if they need to submit an application to MHRA. MHRA Guidance

Euro Roundup: UK government, pharma industry fail to agree on medicines payment scheme

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