PPRS Update Quarter 4 2014 payments 13 th March 2015 David Watson Director Pricing and Reimbursement 1.

PPRS UpdateQuarter 4 2014 payments

13th March 2015David Watson Director Pricing and Reimbursement

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• Q4 2014 growth rate

• ABPI focus

• Communication to members

• Q & A

Agenda

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Q4 DH Publication

£310M paid by industry in total for 2014

Measured spend: the spend controlled by the PPRS Payment mechanism. Included sales of new products

Sales covered by the PPRS Payment: The percentage payment applies to these sales, which exclude sales of new products. Sales of new products are included in the calculation of the overall sum to be repaid across all member companies. Products with a new active substance designation that are introduced after 31 December 2013 are excluded from the sales used to calculate the payment by each company

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£MAggregate Net Sales Subject to Medicines Bill Growth Calculation (Measured Spend)

Aggregate Net Sales Covered by the PPRS payment

Aggregate Payments Received by the Department of Health

YTD Q1 YTD Q2 YTD Q3 YTD Q4

2013 Q1 1846 1861 1,846 2013 Q2 1924 19402013 Q3 1983 19972013 Q4 2117 21332014 Q1 1969 1981 74 1,969 2014 Q2 2018 2024 762014 Q3 2106 2101 792014 Q4 2186 2168 81Growth 310 6.70% 5.78% 5.93% 5.20%

7,870

8,279

3,7695,752

3,9876,093

Q4 DH Publication

Growth for the full year 2014: 5.2%, down from the YTD Q3 growth of 5.93%

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£MAggregate Net Sales Subject to Medicines Bill Growth Calculation (Measured Spend)

Aggregate Net Sales Covered by the PPRS payment

Aggregate Payments Received by the Department of Health

YTD Q1 YTD Q2 YTD Q3 YTD Q4

2013 Q1 1846 1861 1,846 2013 Q2 1924 19402013 Q3 1983 19972013 Q4 2117 21332014 Q1 1969 1981 74 1,969 2014 Q2 2018 2024 762014 Q3 2106 2101 792014 Q4 2186 2168 81Growth 310 6.70% 5.78% 5.93% 5.20%

7,870

8,279

3,7695,752

3,9876,093

Q4 DH Publication

Quarter 4 2014 versus Quarter 4 2013 growth lower at 3.2%

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£MAggregate Net Sales Subject to Medicines Bill Growth Calculation (Measured Spend)

Aggregate Net Sales Covered by the PPRS payment

Aggregate Payments Received by the Department of Health

YTD Q1 YTD Q2 YTD Q3 YTD Q4

2013 Q1 1846 1861 1,846 2013 Q2 1924 19402013 Q3 1983 19972013 Q4 2117 21332014 Q1 1969 1981 74 1,969 2014 Q2 2018 2024 762014 Q3 2106 2101 792014 Q4 2186 2168 81Growth 310 6.70% 5.78% 5.93% 5.20%

7,870

8,279

3,7695,752

3,9876,093

Q4 DH Publication

The latest growth rate won’t change the 2015 payment, ..but will be part of the calculation for the 2016 payment.

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2015 PPRS timelines*:

31st Jan 2014 Q4 sales report + payment

12th March Q4 Data published

30th April 2015 Q1 sales report + payment

2nd June Q1 Data published

31st July 2015 Q2 sales report + payment

3rd Sept Q2 Data published

30th Sept 2014 audited sales reports due

31st Oct 2015 Q3 sales report + payment

9th Dec Q3 Data and 2016 % payment published

*DH Publication plan Feb 2015

Summary: growth

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1. Fourth quarter payments of £81 million means a total of £310 million paid by industry in 2014 to underwrite the medicines bill

2. Full year growth of 5.2% - less than the quarter three growth of 5.93%, but still represent growth above the original joint forecast of 3.87%

3. Last quarter growth much lower at 3.2%, Q4 2014 will drive 2016 payment, scheme estimated 3.52% growth in 2015

4. New product share 0.55% - in line with estimates

5. Increased use of branded medicines is encouraging but industry would still like to see equal access for patients across care sectors

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PPRS : platform for change

Ensure delivery of commitments to improved access and uptake:

• ABPI working with the Department of Health, NHS England and government to ensure action in key areas: NICE, access and uptake, through formal reviews

• MISG – ABPI in working group with mandate to develop recommendations to unlock blockages in the NHS

• Advocacy focus with aligned industry positions e.g. Parliamentary debate on patient access

• Support planning: reforecast of medicines growth

Medicines Bill Projections (2015 – 2018) March 2015 10

Forecasting the market

Step 1 Step 2 Step 3

Market trends

analysis

Medicine Market forecast

2015-2018

Adapt the medicine market forecast to the

PPRS framework

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PPRS : company events

All company PPRS workshops (tbc: 30th March, 13th and 29th April)

• Context for the current scheme• Update on growth, forecast plans• Progress with PPRS commitments• NICE reform, CDF

Finance Directors forum (11th March) Smaller Companies Forum (24th March) 

Q & A

[email protected]