High Court dismisses challenge to pharmaceutical pricing-agreement scheme


The High Court has, today, dismissed a challenge by the British Generic Manufacturers Association (the “BGMA”) against the Secretary of State’s decision not to allow the BGMA to negotiate the next Voluntary Scheme for Branded Medicines Pricing and Access (“VPAS”).

For many years, the Secretary of State, with the agreement of the Association of the British Pharmaceutical Industry (the “ABPI”), has set up a voluntary scheme by which manufacturers and suppliers of branded medicines who sign up agree to limit the profits made on the sale of certain branded medicines to the NHS – currently known as VPAS. This voluntary scheme runs for 5 years and is enforced by the powers in s.261 of the National Health Service Act 2006 (the “2006 Act”). These enforcement powers only apply if the voluntary scheme was agreed between the Secretary of State and the “industry body”. The “industry body” is defined in s.266(6) of the 2006 Act as “any body which appears to the Secretary of State appropriate to represent manufacturers and suppliers.”

The Secretary of State took into account a number of factors in deciding not to permit the BGMA to negotiate the scheme, including the fact that having three parties at the negotiation would make agreement less likely.

The BGMA argued that, properly construed, it was also an “industry body” for the purposes of s.261 of the 2006 Act such that any voluntary agreement had to be made not just with the ABPI but also with the BGMA. It was argued that the ABPI’s interests, which were focused on originator and in-patent medicines, were in fundamental conflict with the BGMA’s interests, which were focused on generic and biosimilar products. As such, the decision to exclude it from the negotiations was unlawful, unfair and irrational.

Following a rolled-up hearing on 27 June 2023, Turner J dismissed the challenge. He found that the Secretary of State’s decision to exclude the BGMA was lawful. The Secretary of State had a wide discretion in deciding who would be a formal negotiating partner under the terms of ss.261 and 266(6), acted entirely rationally when excluding the BGMA and did not take into account any irrelevant considerations.

Yaaser Vanderman appeared for the Secretary of State for Health and Social Care.

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