Drugmakers Eli Lilly, AbbVie Leave UK Medicine-Pricing Agreement

Drugmakers Eli Lilly & Co. and AbbVie Inc. have pulled out of a voluntary drug-pricing agreement with the UK in a blow to the country’s attempts to control costs for medicines.

(Bloomberg) — Drugmakers Eli Lilly & Co. and AbbVie Inc. have pulled out of a voluntary drug-pricing agreement with the UK in a blow to the country’s attempts to control costs for medicines.

Opposition is rising amid the industry against the country’s attempt to control prices, the Association of the British Pharmaceutical Industry said Monday. The current voluntary price agreement, which is due to end in December, caps the growth of NHS-branded medicine spending at a nominal rate of 2% per year, with the industry returning any spending beyond the limit. 

This year, companies that are part of the agreement will need to repay 26.5% of drug revenue to the government. Healthcare demand and the use of new medicines has grown further than industry pre-pandemic projections, driving up repayment rates beyond sustainable levels, according to the ABPI. 

“The current scheme has harmed innovation, with costs spiraling out of control,” said Laura Steele, president and general manager of the Northern Europe region for Eli Lilly. “We want to see action on a new settlement that allows life sciences to thrive in the UK.”

The exit is another blow to the national health service, which is struggling to deal with surging demand and massive backlogs.

Eli Lilly and AbbVie’s prices will be now covered by a different regulatory framework, which previously had a higher repayment rate.

Makers of branded medicines within the voluntary program will be required to return almost £3.3 billion ($4 billion) in sales revenue to the UK government this year, compared to around £600 million in 2021 and £1.8 billion in 2022. 

“Leaving is not a decision we take lightly,” said Todd Manning, AbbVie’s UK general manager. “Without a positive signal that the future scheme will deliver more reasonable rates, I fear it will be increasingly difficult to advocate for the UK.”

The ABPI said it’s seeking talks with the government to set out a “completely new future settlement.”

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