Pharmaceutical policy: balancing innovation, access and affordability
- This project, led by London School of Economics and Political Science, reviewed the literature and relevant data to better understand pharmaceutical policy in the UK.
- The research team explored the policy environment surrounding pharmaceutical discovery, development, approval, pricing, and adoption. They outline population health and industrial sector objectives, describing their contribution to government policy. In addition, they identify shortcomings of current pharmaceutical policy and outline principles for building a more coherent system.
- Pharmaceutical policy is an area the UK government can rethink, especially this year as the Voluntary Scheme on branded medicines (VPAS) is renegotiated. An opportunity to reinstate the importance of prioritising patients and the health system, recent controversy has suggested some companies are willing to leave the agreement and stop launching their products in the UK. This work aims to provide a better economic theory-based framework for thinking through the current regulatory and policy landscape.
- The research team published a series of reports in March 2023 highlighting key findings and exploring the trade-offs for policymakers concerning innovation, access, and affordability of new medicines.
Prescription drugs play an important role in improving health outcomes. Over the past few decades, they have offered new opportunities to treat people with substantial unmet need, and many debilitating and life-threatening diseases have become preventable, treatable, or curable because of pharmaceutical innovation. However, not all new drugs are transformative. Drug prices are rising, high drug prices often do not correlate with improved clinical outcomes for patients, and there is a mismatch between pharmaceutical innovation and unmet medical need.
Increasing drug prices have important implications for NHS budgets. In addition, recent reforms of the UK pharmaceutical landscape, and the current renegotiation of the voluntary price agreement affect medicines regulation and the future of the pharmaceutical industry, potentially adding further pressures on the cost of health services.
This work fits within the REAL Centre and policy teams' objective of supporting better long-term decision making in government amid these uncertainties and cost pressures.
The research focuses primarily on the population health objectives of pharmaceutical policymaking: how governments can strive to promote innovation of, and access to, affordable medicines to improve the health of their populations. In addition, it highlights industrial policy considerations: how governments can leverage and benefit from the pharmaceutical industry to foster economic growth. The research identifies the trade-offs between population health and industrial sector objectives in pharmaceutical policymaking.
The research team have produced a series of reports which will be published in March 2023:
- A primer on pharmaceutical policy and economics
A global overview of the pharmaceutical sector and the economics involved.
- Design principles for a coherent pharmaceutical system
Defining the principles needed to build a coherent pharmaceutical system.
- Pharmaceutical policy in the UK
A closer look at the UK landscape, in the context of the first two reports.
These reports adopt a ’bench to bedside’ framework to describe the lifecycle of pharmaceutical products from discovery to use in health systems, covering in order:
- Key issues in the pharmaceutical sector
- Research and development
- Clinical trials
- Regulatory review
- Pricing and reimbursement
- Adoption and use
The reports are relevant to policymakers and their advisors, civil servants and others involved in pharmaceutical policy. Researchers and students in the field of health policy should also find the reports useful for understanding the unique features of the pharmaceutical sector.
Contact details
Dr Huseyin Naci
H.Naci@LSE.ac.uk
Dr Elaine Kelly
Elaine.Kelly@health.org.uk
REAL Centre contacts
Further reading
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