The NHS can claim money back under a new deal signed with drug major GlaxoSmithKline. GSK will reimburse the money if rival producer’s drug outperforms its own drugs.
The deal comes close on the tuition fee hike, measures by which the government is trying to cut down public expenses and wasteful expenditures in the two biggest public welfare sectors – education and health.
A radically new concept was drafted by ministers this month. Under the new scheme, effective 2014 – drug makers and the government may agree to a price, contingent upon the clinical evidence of the drug’s efficacy.
For example, if rival drug maker Pfizer’s Sutent proves more effective in treating Kidney cancer than GSK’s Votrient; GSK has to offer partial rebate to NHS.
Votrient will find the backing of National Institute for Health and Clinical Excellence (NICE) only if it agrees to the new pricing mechanism. Although NICE is supporting Votrient on pricing front, it has shot down similar proposals in the past.
NICE’s Chairman Sir Michael Rawlins said recently that he will prefer medicine companies offering discount initially rather than come out with complex pricing strategies such as rebates.
GSK has agreed to reduce the price of Votrient by 12.5 percent from the current £14,000 annual price tag, bringing it at par with Pfizer’s Sutent. However, the comparative efficacy of the drugs will not be known before 2012 and hence, it’s not possible to find out the discounts.
““If we fail to confirm that they are comparable in efficacy – which we do not expect – then we provide a rebate back to the NHS as a result”, Head of GSK in Britain, Simon Jose said to Reuters.