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Government Policy in Medicines May Halt Growth

Our partners, Lilly are calling for the Government to freeze the statutory scheme repayment rate for 2023, in a bid to ensure growth in the UK pharmaceutical industry.

Recently, the Association of the British Pharmaceutical Industry (ABPI) announced that Lilly had left the UK’s Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) – the pricing scheme for NHS medicines that is agreed between industry and Government.

This week mark a pivotal crossroad for UK life sciences as the statutory scheme – of which Lilly is now part, following the company’s departure from VPAS – is discussed as the consultation period reaches a conclusion.

Lilly is now calling for Government to freeze the statutory scheme repayment rate at 24.4 percent for 2023 to demonstrate that they are ready to take immediate action to protect science, medicines and innovation across the UK.

The company’s comments arrive as the Chancellor and the Government set out their plans to boost UK growth, which includes maximising the potential of the life sciences sector. Maintaining the rate at its current level, while not raising it further, will send a clear message that the Government still considers life sciences as a vital contributor to the economy.

UK payment rates exceed those in any comparable countries – 12 percent in Germany, 7.5 percent in Spain and 9 percent in Ireland. Furthermore, the UK spends less than other countries on medicines; just 81 pence for every £100 of GDP, compared to £1.95 in Germany or £1.84 in Japan.

Lilly is now calling for Government to use the statutory scheme consultation to demonstrate that they are listening to the challenges that the pharma industry is facing in the UK and maintain the rate at 24.4 percent for this year.

Laura Steele, President and General Manager, Northern Europe at Lilly and Company, explained: “The future of the UK life sciences sector is hanging in the balance. It is simply impossible to back up Government’s claim that such a punishingly high clawback rate of a quarter of revenues is reasonable or sustainable.

“If ministers are to have any chance of delivering on their life sciences vision and most importantly enable a system that can deliver innovative medicines to UK patients, then the UK landscape needs to be internationally competitive, fast, as payment rates for business far exceed European competitors, which dramatically impacts the level of investment coming into the country.

“There is an opportunity for Government to provide a future pricing scheme that allows life sciences to thrive in the UK now and over the long-term, to boost investment here and to ensure patients can benefit rapidly from cutting-edge clinical trials and medicines.”

She added: “We are committed to partnering with the Government, NHS and wider industry to realise the potential of world-leading science and medicines in the UK. With so much to gain for UK patients and taxpayers, fixing the current punishing and counter-productive medicine pricing policy is a must.”

Final thought

Lilly have made a needed point to ensure the pharmaceutical industry can grow and achieve outcomes for patients. As a major sector of the economy, harnessing the innovative potential of the life science sector is essential. As the UK economy looks to shrink and the NHS faces record pressures – it is vital for the Government to facilitate growth for life science organisations to provide economic output and life-saving innovations for patients.

Harnessing the UK’s potential in life sciences has been the focus of Curia’s NHS Innovation & Life Sciences Commission. The Commission published the 2022 report here, following a launch in Westminster. Please see below for further information.

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