The NHS is paying too high a price for new medicines and the Cancer Drugs Fund represents particularly poor value.

These are the key claims to come out of research from the University of York which claims that the threshold used by the National Institute for Health and Care Excellence when gauging the cost-effectiveness of new drugs is too high. This means that their approval at this level “is doing more harm than good to NHS patients overall”.

The analysis notes that currently NICE uses a threshold of £30,000 per Quality Adjusted Life Year (QALY) but claims this should be £13,000 to provide most benefit across the NHS. The present level is leading to increased mortality in cancer, circulatory, respiratory or gastro-intestinal diseases and reduced quality of life in neurological diseases and mental health, the researchers argue.

The report also argues “the scale of the harm that has been done to other NHS patients” of devoting £280 million to the Cancer Drugs Fund in 2014/15 (a loss of 21,645 QALYs).

Co-author Karl Claxton said that “the increasing pressure to approve new drugs more quickly at prices that are too high will only increase the harm done to NHS patients overall”. He added that “the political pressure to support a multinational pharmaceutical sector cannot justify the real harm that has and will continue to be done to NHS patients”.

NICE: QALY threshold ‘fair and equitable’

Sir Andrew Dillon, NICE’s chief executive, said that Prof Claxton’s work is important “because it brings to life the dry concepts of cost effectiveness thresholds and opportunity costs. It shows that when you decide to move with the cutting edge of medicine, that there’s a price to pay, and with his work, we have one researcher’s views on who’s paying it”.

He added that “over the last 16 years, we think we’ve found a balance that reflects what the public expect the NHS to do”. Sir Andrew suggested that the £20,000-£30,000 per QALY “represents a reasonable compromise between ensuring everyone has fair and equitable access to the NHS and enabling access to new and innovative treatments”.

He went on to say that “unless you believe that drug companies would be prepared to lower their prices in an unprecedented way, reducing the threshold to £13,000 per QALY would mean the NHS closing the door on most new treatments”. The NICE chief concluded by saying that “whether we’ve got the balance right is a question for everyone to reflect on; it’s certainly not a decision just to be left to health economists”.

ABPI: ‘some academic interest but no basis for policy’

Paul Catchpole, the Association of the British Pharmaceutical Industry’s director of value and access, said the University of York report “is likely to be of some academic interest but should not be used as a basis for policy or decision-making”. He added that “very few healthcare decisions are made using the QALY alone” and “if a threshold of £13,000 were applied to decisions about all healthcare interventions then many vital services would cease to be considered viable including A&E, palliative care for dying patients and maternity services”.
Mr Catchpole said that as an industry, “we are acutely aware of the cost pressures that the NHS operates under”, which is  why, via the voluntary Pharmaceutical Price Regulation Scheme,(PPRS) it is “underwriting all medicines expenditure by the NHS over agreed levels”. In 2014 the pharmaceutical industry paid the Department of Health £229 million under this scheme, and it is expected to reach £800 million this year.

He agreed with Prof Claxton that  the CDF “has been nothing more than a sticking plaster to fix a broken process”.