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 For the last 18 years Britain has led the way in measuring drug
cost-effectiveness in a rational and dispassionate way, using a
model of economic benefits developed by the National Institute for
Health and Care Excellence (NICE).
NICE has inspired copycat agencies across Europe - and in countries
as diverse as South Korea and Mexico - giving it an influence beyond
Britain's 3 percent slice of global drug sales.
Now, however, the original system is struggling and patient
charities and drugmakers are alarmed, especially given the wider
funding uncertainties facing the National Health Service (NHS),
which offers free care at the point of delivery.
The new rules mean drugs costing NHS England more than 20 million
pounds ($25 million) a year will no longer get automatic funding,
even if they are cost-effective.
Instead, firms will have to haggle to get them used, resulting in a
potential delay of three years.
Peter Johnson, professor of medical oncology at the University of
Southampton, fears his patients may lose out on a wave of costly new
immunotherapy drugs that are starting to transform treatment.
"Just when we are seeing an increase in the pace of progress with
these drugs, I'm worried that this country is going to be
unnecessarily slowed down by the new affordability cap," he told
Reuters.
Since immune system-boosting drugs like Merck & Co's Keytruda,
Bristol-Myers Squibb's Opdivo and Roche's Tecentriq can be used
against a wide range of cancers, their budget impact will be
significant.
"Almost all these new cancer drugs will hit the 20 million pounds
ceiling very quickly indeed, particularly when they are used for
common cancers like lung cancer," said Johnson, who also acts as
chief clinician for Cancer Research UK.
Meeting rising demand from medical advances and aging populations is
a universal problem, whether healthcare is funded by UK-style
general taxation, compulsory social insurance common in western
Europe or private insurance as in the United States.
But NICE is unusual in putting a clear number on the benefit it
expects from new drugs, using quality-adjusted life years (QALYs),
where one QALY equals a year of perfect health or two years of
middling health.
Its basic cost-effectiveness threshold is up to 30,000 pounds per
QALY and in future it wants to incentivize drugmakers to come in
below 10,000 pounds by offering rapid approval for "exceptional
value" products.
NICE data, however, shows only 10 to 15 percent of the drugs it
approves currently meet this lower cost-effectiveness hurdle.
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RESPONSIBLE PRICING
Carole Longson, director of NICE's center for health technology
evaluation, says the onus is on drugmakers to price medicines
responsibly.
"Given the pace of technological innovation, the demands of people
who need healthcare and the return on investments that shareholders
wish for, the system is struggling," she said.
In some cases that may mean phasing payments, rather than simply
cutting prices, when treatments like cancer immunotherapy or gene
therapy offer long-lasting benefits.
"We need to find ways to structure the budget impact," she said in
an interview.
NICE's QALY thresholds have long provoked controversy and complaints
among drugmakers whose products have fallen on the wrong side of the
equation, yet the system has stood the test of time, albeit with
tweaks such as looser requirements for end-of-life care.
The new budget test, however, is "a kind of fudge", said Karl
Claxton, a health economist at the University of York, who served on
NICE's appraisal committee from 1999 to 2012.
"As a result of trying to put patches on all of this, we end up with
a very confusing and rather arbitrary approach," he said.
The upheaval comes at a tricky time for the government, which is
about to trigger proceedings to leave the European Union but wants
to encourage investment by pharmaceutical firms, which account for a
fifth of all UK business R&D spending.
"It's a disastrous signal to send to the rest of the world," said
Mike Thompson, chief executive of the Association of the British
Pharmaceutical Industry, who still hopes the government could change
its mind before the end of the month.
(Editing by Greg Mahlich)
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