(Source: EMA 2014-3-20)
A looming review of how the NHS values drugs will be closely watched as a test of whether the UK can find a way to balance the need for more savings in the health budget with the rising cost of a new generation of medicines.
The agency that decides which new drugs should be used in the NHS is set to announce draft proposals for how the “wider societal impact” of medicines should be considered, as well as their cost-effectiveness on narrower clinical grounds.
Drugmakers hope that this will open a new era where the long-term social and economic benefits of their products – such as a heart drug that staves off hospitalisation or a kidney therapy that averts the need for dialysis – can help justify steep upfront costs.
But there are also fears that the proposals for so-called “value-based assessment” could lead to discrimination against elderly patients in favour of treatments that help get more economically productive people back to work.
“There are deep moral and ethical concerns here that threaten to call the whole health system into disrepute,” says David Taylor, professor of pharmaceutical and public health policy at University College London.
The government agreed in its 2010 coalition agreement to seek a “much closer link between the price the NHS pays and the value that a medicine delivers”. Plans for a full-scale overhaul of pricing were later scrapped but the National Institute for Health and Care Excellence (Nice) was ordered to look for ways to judge “wider societal benefits” when assessing drugs.
The institute admitted in January that such an approach risked creating tensions with the principle of equitable access that is a central tenet of the NHS. To overcome this, the agency said it was working on a broader definition of “societal impact”, less focused on a crude calculation of people’s economic productivity.
“Nice will not allow age itself to tip the balance of a recommendation against the use of a treatment,” the agency said.
However, these reassurances have failed to quell anxiety over the consultation, the launch of which has been repeatedly pushed back as Nice fine-tunes its proposals.
The agency has often faced criticism that its current formula, measuring the cost of drugs against the number of additional “quality-adjusted life years” offered to patients, is too rigid and leads to rejection of too many treatments.
Drugmakers complain that, while the industry provides more than a quarter of private sector investment in UK research and development, the country’s health system is reluctant to adopt the fruits of their innovation.
“The system isn’t working,” says Deepak Khanna, president of the Association of the British Pharmaceutical Industry.
“We have among the lowest prices in Europe for drugs – yet we also have among the lowest uptake of new medicines.”
Per capita spending on pharmaceuticals is eighth lowest in the EU at €289, compared with an average of €349.
To many taxpayers this is something to be welcomed: proof that the government is using NHS buying power effectively, while Nice acts as a tough gatekeeper against drugs with poor cost-effectiveness.
But critics warn that the approach is denying patients access to life-saving treatments and deterring investment in an industry that includes two of Britain’s most important corporate champions: GlaxoSmithKline and AstraZeneca.
“If we systematically undervalue today’s innovations and say that they are unaffordable . . . we risk undermining both investment and patient confidence in the NHS,” says Professor Taylor.
Drugmakers agreed a deal with government in November to freeze NHS spending on drugs for two years with increases of no more than 2 per cent in the following three years. In return, industry is pressing ministers to make the NHS more open to breakthrough therapies.
Mr Khanna says smarter use of medicines can produce savings throughout the health system as the government faces a £30bn NHS funding gap over the next seven years.
Critics of big pharma say there is plenty of fat to cut from the £13bn spent annually on drugs. “Every extra pound you spend on medicines is a pound less on people and nursing care, which is what really makes the difference in healthcare,” says Des Spence, a Glasgow-based GP and health commentator.
Nice’s challenge is to come up with a way of valuing medicine that both sides of the argument can respect.
[More Information on Financial Times]