Objectives
The 2019 Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) is a 5-year voluntary agreement between the United Kingdom’s Department of Health and Social Care (DHSC) and the Association of the British Pharmaceutical Industry (ABPI) that aims to support pharmaceutical industry innovation alongside ensuring affordability. One key aspect is a cap limiting the growth of the branded medicines bill to a maximum of 2% per annum, which is rebated back by VPAS members if exceeded. The COVID-19 pandemic placed unprecedented pressure on healthcare systems’ expenditure and this research reviews its impact in relation to this medicines expenditure cap.
Methods
Publicly-available DHSC VPAS documentation was screened for forecasted and actual repayment percentages/amounts (on 09-May-2022).
Results
Annually, the DHSC set the repayment percentage for that year and forecast it for the upcoming year. The repayment percentage for 2019 was set at 9.6% and forecasted 14.2% for 2020. The 2020 actual repayment percentage was 5.9% and the 2021 forecast was 9.0%. The 2021 actual repayment percentage was 5.1% and the 2022 forecast was 5.8%. The 2022 actual repayment percentage was 19.1% and the 2023 forecast was 26.0%. However, in January 2022 the DHSC and ABPI announced a one-off amendment to VPAS capping the repayment percentage to 15% for 2022. The magnitude of the repayments under VPAS totaled £845m in 2019, £594m in 2021 and £564m in 2021.
Conclusions
Repayments under VPAS have totaled over £2bn during its first 3 years. Whilst this represent significant savings for the DHSC, this may not be sustainable for industry; a forecast 26% rebate in 2023 could, if realized, amount to over £2 billion in repayments for that year alone. The VPAS expires at the end of 2023 and balancing the post-COVID healthcare budgetary pressures alongside financial implications for industry may pose for some very challenging negotiations.