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NERA Economic Consulting raises concerns over DHSC’s Statutory Scheme

The proposed changes could limit patients’s access to treatments and clinical trials.

The National Economic Research Associates (NERA) Economic Consulting has raised concerns about the analysis, assumptions and approach taken by the Department of Health and Social Care (DHSC) in its proposed changes to the Statutory Scheme.

Commissioned by the Association of the British Pharmaceutical Industry (ABPI), the proposed changes for branded medicines could deter investment in developing, researching and launching new medicines in the UK – ultimately limiting patients’s access to treatments and clinical trials.

The NERA team found that the DHSC’s proposals were focused on one of three of its stated objectives, constraining the costs of branded medicines and undermining other key objectives.

Additionally, the proposals are likely to result in low-margin medicines being withdrawn from the UK market, and companies may also not locate clinical trials in the UK if perceived as unsupportive of innovation.

NERA said that the proposals are driven by the objective of constraining the growth of branded medicine sales to the NHS to a 2% annual growth gap, with no justification by the DHSC.

Additionally, NERA has deemed the DHSC’s Life Cycle Adjustment mechanism, which aims to implement even higher rebates in parts of the medicines market, to be ‘insufficiently competitive’.

It suggested that statutory scheme consultations should be reviewed by the Better Regulations Executive (BRE) to ensure proper independent scrutiny of the scheme.

George Anstey, senior managing director at NERA Economic Consulting, said: “The ability to make informed policy choices relies on an accurate picture of the cost and benefits of any decision. The findings set out in our report suggest that this consultation falls well short of this goal.

“DHSC should be held to a higher standard and be subject to greater independent scrutiny than is currently the case.”

Richard Torbett, chief executive at ABPI, said: “While we recognise the very acute financial constraints the government faces, left unchanged these proposals will do serious harm to the UK’s reputation as a global centre for life sciences.”