UK Law and Practice Contributed by: Jackie Mulryne, Ewan Townsend, Adela Williams and Libby Amos-Stone, Arnold & Porter
ship agreement with Japan, which provides for mutual recognition of conformity assessments for GMP. The UK has entered into free trade agreements and mutual recognition agreements (MRAs) with Australia and New Zealand which provide for no tariffs or quotas on trade in most medicinal products and medical devices as well as mutual recognition of conformity assessment of medical devices and GMP. The UK-USA MRA provides for mutual recognition of conform- ity assessments for GMP of pharmaceuticals. The UK-Switzerland Trade Agreement provides for mutual recognition of GMP inspections and certifications. The UK-Canada Trade Continuity Agreement includes a protocol relating to mutual recognition of conformity assessments for GMP of pharmaceuticals. The UK-Israel Trade and Partnership Agreement provides for mutual rec- ognition of GMP inspections and certifications. The UK-Singapore Free Trade Agreement pro- vides preferential tariffs and a reduction of non- tariff barriers for medicinal products and medical devices. The UK remains a member of the World Trade Organization. 8. Pharmaceutical and Medical Device Pricing and Reimbursement 8.1 Price Control for Pharmaceuticals and Medical Devices Statutory controls on pharmaceutical pricing are set out in the National Health Service Act 2006 and subordinate legislation. There are currently two schemes for controlling prices of branded medicines purchased by the national health ser- vices in the UK: (i) a Voluntary Scheme; and (ii) the Statutory Scheme. The Voluntary Scheme for Branded Medicines Pricing and Access (VPAG or the “Scheme” ) is an agreement, which is non-binding under the
laws of contract, negotiated between DHSC, NHS England and the ABPI. It controls the prices of branded health medicines by: • limiting the profits made by scheme members from their NHS business; • controlling the maximum prices which may be charged for medicines within the Scheme; • establishing a budget cap on the total expenditure by the NHS on branded health service medicines, with member companies making scheme payments to the DHSC as quarterly rebates (calculated as a percentage of eligible net sales) to cover excess expendi- ture. New branded health services medicines that contain a new active substance and are sup- plied by VPAG member companies are subject to free pricing at launch, as are line extensions of such medicines launched within 36 months of licensing of the initial indication in the UK. The prices of such products must be notified to the DHSC prior to launch. The price for all other branded health service medicines supplied by VPAG member companies must be agreed with the DHSC. If a company is not a member of the VPAG, it is regulated by the parallel Statutory Scheme. The Statutory Scheme is applicable only to brand- ed health service POMs. Since 1 April 2018, it has involved a payment scheme calculated as a percentage of net sales, and from 1 January 2025, the Scheme has differentiated between older and newer medicines in a manner simi- lar to VPAG. The maximum price that may be charged for a branded health service medicine within the Statutory Scheme is that directed by the Secretary of State. The DHSC has stated that it aims for broad commercial parity between the schemes and has in recent years made various
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