Words by GOLD newsdesk
The British Generic Manufacturers Association (BGMA) has launched legal action over the decision to only grant it ‘observer’ status in the upcoming voluntary pricing and access scheme (VPAS) negotiations between the UK government and the Association of the British Pharmaceutical Industry (ABPI).
The BGMA, which represents the manufacturers of generics and biosimilars, is challenging the decision because four out of ten products in VPAS are branded generics or biosimilars, yet they have not been offered an equal seat at the table to patented manufacturer body, the ABPI.
Mark Samuels, Chief Executive, BGMA, said he was “deeply concerned” by the decision and that observer status was “not sufficient given the existential impact the rate is, and will have, on branded generic and biosimilar manufacturers”.
The VPAS scheme, which requires on-and off-patent branded manufacturers to pay 26.5% tax on their net profits from sales of certain medicines to the NHS, has been the subject of scrutiny in recent months after the UK government increased the tax by 11.5% for this year.
Samuels called the rise “unprecedented” and said it would be a challenge for his industry as it “subsists on thin margins” because branded generic and biosimilar medicines do not benefit from patent-protected prices.
The scheme is due to be reviewed before it expires on 31 December 2023, and while BGMA would like to represent its own interests in the negotiations, the ABPI is also advocating for change following criticism from its members and warnings of innovation being taken out of the UK.
“We are disappointed that the BGMA has decided to take this action – but we recognise that it has been perpetuated by the extreme challenge placed on all parts of the industry from the surge in the branded medicine payment rates,” said Richard Torbett, Chief Executive, ABPI.
The ABPI has recently produced a report addressing their concerns with the VPAS. The paper suggests a number of recommendations for the UK government to consider as it negotiates a new deal, including ensuring the UK regulatory system remains world-class and efficient and increasing access to innovative medicines for patients through flexible pricing and reimbursement models.