The Week 3 March 2023

A?deal?in Northern Ireland and?3 King James bibles?worth of government WhatsApp messages to trawl through. It’s been quite the week in Wesminster. But, as usual, we’re here to highlight the things you might have missed.

Over the past few weeks, the?Reform?team has been?deep diving?into England’s woeful A&E performance. But we haven’t taken our eyes off the NHS’s other core challenge — clearing enormous care backlogs. Quick recap: long waits were growing before the pandemic, but the suspension of non-emergency healthcare in 2020-1 saw them balloon as COVID pressures eased. In?December last year, 7.2 million people were waiting for care, with roughly 400,000 of them having waited more than a year.

In?February 2022,?backed with ￡14 billion of dedicated funding, the NHS set out a targeted plan for recovery. A year on, and?here?is the verdict of Public Accounts Committee Chair (and?Reform?Advisory Board member), Meg Hillier:?“The NHS will not achieve the targets in its recovery plan, and that means health, longevity and quality of life indicators will continue to go backwards for the people of this country.” PAC notes that cancer waiting times are at their worst ever level and that the NHS had not met its headline target of eliminating two year waits by July 2022. The problem? Unrealistic assumptions in planning, failures in strategic management by NHS England, and a lack of insight into the core challenge holding back activity — getting patients out of hospital. So, the usual suspects.

Elsewhere this week, the Association of the British Pharmaceutical Industry set out its?proposals?for a future medicines pricing scheme. This is a highly technical area, but one of great importance. Quite rightly, the NHS is a hard negotiator when it comes to drug prices — the Service spends around ￡17 billion on medicines a year and getting a fair price is vital for its sustainability. But at the same time, pricing arrangements must be reasonable to medicine producers. Under the current agreement hatched pre-pandemic in 2019, pharmaceutical companies are paying back?more than 25%?of their revenues (not profit) to the NHS, up from around 5% in 2021.

This huge increase makes the UK a challenging place to do business, and in a country with big?life sciences ambitions, should be of major concern. Put simply, unfair arrangements risk the exodus of an industry which is the single biggest private funder of R&D in the UK and adds almost ￡40 billion to GDP annually.

A different approach is clearly necessary, and the ABPI proposes a fixed annual contribution of 6.88% of revenue. This would put the UK more in line with comparator nations and still net the NHS more than in any year prior to the pandemic. With health services under acute pressure and in search of short term revenue streams, this will be a hard sell, but government must think longer term on this one.