The National Institute for Health and Clinical Excellence has published final guidance rejecting the use of Merck & Co’s Erbitux for recurrent and/or metastatic head and neck cancer.

The news comes as no surprise, however, given that earlier this year the cost watchdog revealed its intent to reject the drug on grounds that it fails to provide value for money for the NHS in this setting.

Erbitux (cetuximab) is recommended by the Institute alongside radiotherapy as a treatment for locally-advanced head and neck cancer, but an Expert Review Group ruled that the drug should not be used to treat recurrent of metastatic forms of the disease as the price tag is simply too high for this subgroup of patients.

Moreover, an analysis to determine the price for a vial of Erbitux that would generate a cost below the threshold found that a treatment regimen based on the drug appeared not to be cost effective at any price, the ERG said.

Defending the decision, NICE chief executive Andrew Dillon said that, aside from uncertainty over the clinical effectiveness of the drug, the manufacturer’s own analysis for Erbitux plus chemotherapy resulted in the cost of an additional QALY (quality adjusted life year) of £121,367 with a predicted gain in overall survival of ‘just’ over two months, which is well over the limit even taking new advice on the appraisal of end-of-life drugs into account.

“This would mean the NHS making significant funds available for a very expensive treatment which may or may not benefit individual patients. Those funds would not then be available for treating other conditions with greater and more certain benefits for other patients”, Dillon said.

Merck Serono will certain be disappointed by the decision that Erbitux, which is also approved for the treatment of colorectal cancer, is one its flagship drugs on which it had pegged high hopes to drive earnings in the coming years. The exclusion of patients with recurrent of metatsatic head and neck cancer will have a significant impact on sales from the drug in this indication, given that these subgroups account for about 40% of all cases.