The Voluntary scheme for branded medicines pricing and access (“VPAS”) is a voluntary agreement that regulates the price of the vast majority of branded medicines sold in the UK (including branded generics and biosimilars).  VPAS is critical to the commercial interests of most innovative pharmaceutical companies operating in the UK.  It has traditionally been negotiated and agreed upon by the Association of the British Pharmaceutical Industry (“ABPI”) and the Secretary of State for Health and Social Care (“SoS”). 

These negotiations take place pursuant to Sections 261 – 263 of the National Health Service Act 2006 (the “Act”), which permit the Secretary of State to agree to a voluntary scheme with “the industry body.”

The current VPAS expires at the end of the year, and is set to be replaced by a new scheme in January 2024.  Negotiations between the ABPI (as the industry body) and the Department of Health in respect of the new VPAS commenced on 4 May 2023.

The British Generic Manufacturers Association (“BGMA”) has brought a judicial review to challenge the decision taken by the SoS not to include BGMA in these negotiations. 

BGMA argues that the VPAS not only affects branded innovator products (whose interests are traditionally represented by the ABPI) but also branded generics and biosimilars.  It argues that the relevant “industry body” in respect of those products must be BGMA and not the ABPI.  According to BGMA, it must therefore have a seat at the negotiating table.

The SoS has stated that he prefers to deal with one “industry body” in the negotiations – namely the ABPI – and would only grant BGMA “observer status” in the current negotiations. 

The ABPI is also involved in the case as an interested party.

While the detailed grounds of the SoS and the ABPI are not yet available, we note the following initial observations from the court papers currently available:

  1. The application for permission to apply for judicial review will be rolled up with the substantive claim.  In other words, if the Court grants permission then the substantive case will be heard at the same time.
  1. BGMA applied for an expedited timeline, which the Court has granted.  Given that the preparatory steps set out in the Court’s directions will not be completed until the week commencing 12 June 2023, it is likely that the hearing will take place in late June 2023 (although the timing is not totally clear).
  1. It appears the SoS offered observer status to BGMA for the VPAS negotiations on condition that BGMA discontinue any legal proceedings.  BGMA rejected this.
  1. It appears to be common ground between the parties that BGMA does indeed represent the interests of manufacturers of branded generics and biosimilars.  The SoS, however, has said he wishes only to negotiate with a single industry body (rather than multiple bodies) – on the basis that this is most advantageous to the interests of the NHS – and has the discretion to do so. The SoS believes the appropriate body here must be the ABPI.
  1. BGMA contends that:
  • Section 261 of the Act does not require, nor provide the discretion for, the SoS to select and deal with a single body.  According to the claim, the SoS has therefore made an error of law, given consideration to irrelevant factors, and has frustrated the relevant statute.  Rather, according to BGMA, the Act requires the SoS to make a judgment as to whether a body is “appropriate” to represent a section of the industry in negotiations.  The SoS has failed to carry out a reasonable and objective assessment of who the relevant industry body/bodies is/are here.
  • In the alternative, if the SoS does have discretion to select the relevant industry body/bodies, then in this case the SoS has exercised that power unreasonably, unfairly and incorrectly.

We will continue to follow this case closely and provide updates. At this stage, given the claim is now expedited, we imagine the outcome will be known by mid-Summer.  In commencing negotiations already (and only with the ABPI), the Department of Health seems to have taken a pragmatic “continue as before” approach, unless and until the Court requires it to change tack.

If you would like to discuss the case and what it may mean for your company’s operations, please contact: Grant Castle, Robin Blaney, Brian Kelly and Raj Gathani.

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Photo of Grant Castle Grant Castle

Grant Castle is a partner in London and Dublin practicing in the areas of EU, UK and Irish life sciences regulatory law. He supports innovative pharmaceutical, biotech, medical device and diagnostics manufacturers on regulatory, compliance, legislative, policy, market access and public law litigation…

Grant Castle is a partner in London and Dublin practicing in the areas of EU, UK and Irish life sciences regulatory law. He supports innovative pharmaceutical, biotech, medical device and diagnostics manufacturers on regulatory, compliance, legislative, policy, market access and public law litigation matters in the EU, UK, and Irish Courts.

He is one of the Co-chairs of Covington’s Life Sciences Industry Group and is Head of Covington’s European Life Sciences Regulatory Practice.

Grant regularly advises on:

  • EU and UK regulatory pathways to market for pharmaceuticals and medical devices, including in vitro diagnostics and on associated product life cycle management;
  • Pharmaceutical GxPs, including those governing pharmacovigilance, manufacturing, the supply chain and both clinical and non-clinical research;
  • Medical device CE and UKCA marking, quality systems, device vigilance and rules governing clinical investigations and performance evaluations of medical devices and in vitro diagnostics;
  • Advertising and promotion of both pharmaceuticals and medical devices; and
  • Pricing, reimbursement and market access for both pharmaceuticals and medical devices.

Grant also handles procedural matters before EU, UK and Irish regulators and UK and Irish market access bodies, where necessary bringing judicial reviews for his life sciences clients before the EU, UK and Irish Courts.

Chambers UK has ranked Grant in Band 1 for Life Sciences Regulatory for the last 18 years. He is recognized by Chambers UK, Life Sciences as “excellent,” “a knowledgeable lawyer with a strong presence in the industry,” who provides “absolutely first-rate regulatory advice,” according to sources, who also describe him as “one of the key players in that area,” whilst Chambers Global sources report that “he worked in the sector for many years, and has a thorough understanding of how the industry ticks.” He is praised by clients for his “absolutely first-rate” European regulatory practice. Legal 500 UK notes that he is “highly competent in understanding legal and technical biological issues.”

Photo of Robin Blaney Robin Blaney

Robin Blaney is a partner in the firm’s Life Sciences practice. He advises pharmaceutical, biotechnology, medical device and cosmetic manufacturers and trade associations on a wide range of regulatory, compliance, transactional and legislative matters, as well as the full range of commercial agreements…

Robin Blaney is a partner in the firm’s Life Sciences practice. He advises pharmaceutical, biotechnology, medical device and cosmetic manufacturers and trade associations on a wide range of regulatory, compliance, transactional and legislative matters, as well as the full range of commercial agreements that span the product life-cycle in the life sciences sector. His expertise includes clinical trial agreements, manufacturing and supply agreements, distribution and other marketing agreements, regulatory services agreements, and tenders. He has particular experience structuring and documenting EU pharmaceutical distribution arrangements and transitional arrangements relating to product acquisitions. Robin writes and speaks regularly on subjects such as medical device regulation, pharmacovigilance and clinical trials.

Photo of Brian Kelly Brian Kelly

Brian Kelly is a partner in the European Life Sciences group and also co-chair of Covington’s Global Food Industry Group. Brian’s practice focuses on EU food and drug regulatory law, public and administrative proceedings, EU procurement advice and challenges, internal investigations, European Union…

Brian Kelly is a partner in the European Life Sciences group and also co-chair of Covington’s Global Food Industry Group. Brian’s practice focuses on EU food and drug regulatory law, public and administrative proceedings, EU procurement advice and challenges, internal investigations, European Union law, and product liability and safety. The Chambers Europe Guide to the legal profession lists Brian as part of our “world-class [regulatory and public affairs] team and describes him as a notable practitioner who is “very ambitious, thorough with a sharp intellect”. The Chambers UK Guide quotes clients saying: “his communication and work ethic stand out, he is very hard-working and dedicated when it comes to his cases.”

Brian’s advice on general regulatory matters across all sectors includes borderline determinations, food classifications, tissue and stem cell regulation, adverse event and other reporting obligations, manufacturing controls, labeling and promotion, pricing and reimbursement/procurement, procurement/tenders (including emergency use tenders, EU-wide tenders, Covid-19-related tenders), product life cycle management (foods and medicines), nanotechnology, and anti-bribery and corruption advice. Brian has also been advising on UK and European “Brexit” related issues including tariffs.

Brian has also advised and co-ordinated international projects on advertising/promotion, clinical research, data protection, the regulatory status of borderline products, food/cosmetic ingredient reviews and advises on regulatory aspects of corporate/commercial deals, particularly regulatory due diligence.

Brian is also experienced in representing clients in administrative and enforcement proceedings before regulatory authorities and in the UK and EU courts.

Brian is an honorary lecturer at University College London.

Photo of Raj Gathani Raj Gathani

Supporting clients in the pharmaceutical, healthcare, medical device and consumer products sectors, Raj Gathani’s practice is built around EU and UK regulatory and strategic advice.

Increasingly, Raj concentrates on post market-launch projects, such as advising on advertising compliance, communications, interactions with healthcare professionals…

Supporting clients in the pharmaceutical, healthcare, medical device and consumer products sectors, Raj Gathani’s practice is built around EU and UK regulatory and strategic advice.

Increasingly, Raj concentrates on post market-launch projects, such as advising on advertising compliance, communications, interactions with healthcare professionals and patients, pricing controls and reimbursement strategies particularly in the UK and the Republic of Ireland.

Healthcare, its structure and delivery are specialist practice areas for Raj, particularly having operated healthcare and pharmacy businesses for eight years prior to joining the firm. This experience enables Raj to provide in-depth advice to healthcare clients –particularly those in the digital health space – as well as other life sciences companies whose work engages medical practice, dispensing and health-services rules.

Photo of Dan Spivey Dan Spivey

Dan Spivey is an associate in the Life Sciences Regulatory team. Dan advises clients in the pharmaceutical, healthcare, medical device, and food and beverage sectors on a range of regulatory matters.