UK government to include biosimilars in price controls

The British government has launched a consultation on proposed changes to the statutory scheme for pharmaceutical pricing that would include biosimilars in the scope of its price controls. To coincide with the new Pharmaceutical Price Regulation Scheme (PPRS) scheme, which is expected to come into force after the current scheme expires on 31 December 2018, the government is proposing changes to the statutory scheme from the beginning of 2019.

One change would be to include all biological medicinal products (including biosimilars) within the scope of health service medicines captured by the payment mechanism, price controls and information requirements.  Other changes include changing the payment percentage mandated by the statutory scheme. The payment percentage applied in the statutory scheme was set at 7.8%; this was aligned with the payment percentage operational in the PPRS for 2018. In the proposed changes, the Department of Health has constructed a forecast against which the payment percentage for 2019 can be set. The percentage is set to recover the difference between forecast sales value and allowed sales value per year. Currently, the proposed payment percentages are 9.95 for 2019, 15.8% for 2020 and 21.7% for 2021.

The government has said this is a more effective and reliable mechanism for controlling the cost of branded health service medicines and re-establishes an appropriate level of commercial equivalence with the PPRS that had been lost when the 2014 PPRS agreement adopted a payment percentage mechanism.

However, the proposed changes provoked a strong reaction from the Generic Manufacturers Association (BGMA) and the British Biosimilars Association (BBA), with director Warwick Smith saying: “It makes no sense for the government to intervene in pricing when competition or tenders already very effectively control prices of branded generics and biosimilars. In particular, the consultation appears significantly to underestimate the savings already delivered by biosimilars where we have seen price reductions of more than 80% for some products… These proposed changes will significantly impact biosimilars and manufacturers may be unable to launch products as a consequence.”