UK Government's New Appointment Offers Inside Track on Pricing and Procurement

The UK is entering into unchartered waters between Brexit – offering the opportunity to potentially change approaches to procurement – and negotiating a successor to the main pricing scheme for branded medicines, the Pharmaceutical Price Regulation Scheme (PPRS). To get the inside track, the government has recruited Steve Oldfield as Chief Commercial Officer.

Prepping for negotiations

For some it might just be the perfect storm to change the way that medicines are bought and priced across the UK. There’s the potential to change procurement approaches as the UK negotiates it’s exit from the European Union by the March 29, 2019, as well as the current end date of the 2014 PPRS being the December 31, 2018.

The backdrop includes a new Statutory Scheme for Pricing of Branded Medicines too; the alternative if a successor to the PPRS can’t be agreed or if individual companies would rather opt out of the voluntary PPRS. The new Statutory Scheme hasn’t had time to bear fruit, but with the potential for changes every year in the amount that companies need to pay to Government, it will no doubt encourage industry to do it’s utmost to get as best a deal as they can for a successor PPRS.

Although much remains unclear, it is clear that the government wants to be in the best position it can to cut a deal with industry. That’s not only by working on a Life Sciences Strategy with leading figures across industry (the carrot), but also through negotiations on the PPRS (the stick).

Part of that preparation and positioning is the creation of a new role, Chief Commercial Officer at the Department of Health (DH). The DH has traditionally be the sole negotiator on the PPRS with the Association of the British Pharmaceutical Industry (ABPI) on the other side, on behalf of industry. On the DH side it has been civil servants who have negotiated on the PPRS.

Insights from experience

Steve Oldfield brings a wealth of industry experience. That ranges from starting out as a brand manager at P&G both in the UK and in Italy, before taking up a role of marketing manager at Sanofi. Oldfield moved on within Sanofi, working internationally, before taking on the role of managing director in the UK and Ireland for over five years. From there Oldfield moved to Teva to his most recent role as Chief Operating Officer at PGT Healthcare.

Oldfield has also held a position on the ABPI Board and been influential for joint work on the introduction and adoption of new medicines. Oldfield was the Chair of the Ministerial Industry Strategy Group (MISG) Medicines Access Group (MAG) back in 2013, and also led work on metrics on NICE uptake, as the Chair of the Metrics Oversight Group. He was Chair of the European Medicines Group in 2014 too.

That means Oldfield can take an international perspective and one that encompasses innovative to generic medicines. This will no doubt inform what appears to be the first item on his to-do list at the DH when he joins in October: creating and developing a commercial strategy. The DH says that this will underpin negotiations with a number of commercial suppliers, including a successor to the PPRS.

Although a break from tradition in bringing in Oldfield, there are still going to be key civil servants who will bring the much-needed corporate memory, as well as civil servants new to the area to bring in fresh perspectives to Government thinking on a successor to the PPRS. This time though, they may be spread across the DH and in other places in Government, and the NHS from HM Treasury to the Office for Life Sciences to NHS England (NHSE).

Negotiations will be tough…but fair?

Steve Oldfield’s LinkedIn profile gives some insight into what he might want to achieve. He says about himself that he is “highly results-focused.” That has led to a “strong record of delivery against ambitions P&L targets.” At the same time though, Oldfield, many will hope, will have the understanding of the balance that needs to be struck between the short-term and the long-term. Afterall, the NHS needs new medicines to help it manage the future costs of diseases like dementia for which there is currently no cure. It’s no time to be penny-wise and pound foolish.

Oldfield was one of many who were not happy with the way that the 2014 PPRS was shaping up during the last negotiations, so he’ll be bringing those thoughts with him too.

Oldfield will be reporting to the DH Permanent Secretary, Chris Wormald. Given Oldfield’s experience – where networking and joint work has featured heavily - he’ll also be likely to be wanting to develop good relationships with others. Some might not be formally involved in negotiations on the PPRS, but are influential. This includes those at NHS England. To avoid criticisms about engagement across the UK, he’ll be wise to develop good relationships with those working in the devolved nations too.