NHS England has recently published draft proposals on how it plans to approach doing commercial deals with pharmaceutical companies for branded medicines. This draft “Commercial Framework” is now open for comment and consultation (stakeholders can submit their views here). The consultation period ends on 10 January 2020, with Commercial Framework expected to be finalized later in 2020.

The Commercial Framework describes how NHS England, the National Institute for Health and Care Excellence (“NICE”) and pharmaceutical companies could work together to support the introduction of clinically and cost-effective branded medicines into the NHS, by striking commercial deals.

Developing and publishing the Commercial Framework makes good a commitment made in the 2019 Voluntary Scheme for Branded Medicines Pricing and Access (“Voluntary Scheme”). The Voluntary Scheme is one of two price control schemes operational in the UK, which restrict prices that the NHS pays for many branded medicines. The 2019 Voluntary Scheme refreshed and replaced the former Pharmaceutical Price Regulation Scheme (“PPRS”). One of the key themes of the new scheme was to add more flexibility to market-access, including in some cases by finding commercially negotiated ways forward.

The draft Commercial Framework makes clear its intention to support NICE’s health technology appraisal process (by which NICE issues a recommendation on a product’s use within the NHS), rather than act as an alternative or substitute to it. In that context, the draft sets out various commercial options available to companies through the market-access process. Some of these options are already well-established parts of the NICE’s assessment framework, including (for example):

  • Simple or Complex Patient Access Schemes – by which a reimbursement recommendation from NICE is contingent on a company offering a confidential percentage discount to the NHS or more complex, non-confidential value propositions; and
  • Managed Access Agreements – which are, in essence, commercial deals for a fixed period that allow time to resolve clinical or cost-related uncertainties at the time of a NICE appraisal.

Importantly, the draft Commercial Framework also proposes when and how NHS England might agree to so-called “Confidential Commercial Agreements.” NHS England might consider these agreements in the following circumstances:

  1. When a company intends to put an “enhanced value” offer to the NHS. In essence, this allows a company to put together a complex and confidential commercial deal, with the emphasis on delivering cost-effectiveness under NICE’s standard assessment methods.
  2. When “unusual or unique circumstances” surrounding a NICE appraisal make launch a particular product challenging or commercially unviable to the company developing it. In those circumstances, NHS England has the ability – on a case-by-case basis — to reach a bespoke solution with the company concerned. The draft proposal states that NHS England would have this level of commercial flexibility only when the product offers a significant health gain and when the company would otherwise lose significant revenue that it could not recover in later years. This could be an important development for high-cost; high-benefit products resulting from expensive, pioneering innovation.

Separately, the draft Commercial Framework sets out how NICE and NHS England aim to engage with pharmaceutical companies at an early stage to discuss market access and give preliminary direction to the process.

The draft document also makes clear that the Commercial Framework is designed to be a living document. Eventually, the aim is to broaden its scope to cover biosimilar and generic products, in addition to branded medicines.