Drugmakers in the UK have told Parliament that the National Institute for Health and Clinical Excellence has become overly reliant on a single means of assessing the cost-effectiveness of new treatments, and that it should be taking a more holistic approach.

NICE relies too much on cost per quality-adjusted life years (QALYS), a mathematical prediction of a medicine’s potential incremental cost-effectiveness, in deciding which treatments should be available on the National Health Service in England and Wales, industry spokesmen told the House of Commons Health Select Committee’s investigation into NICE last week.

QALYS are predictive of future cost/benefits, “like 10-year weather forecasts,” said David Brickwood, vice president of international and government affairs, Europe, at Johnson & Johnson, who argued with other industry speakers that they should be “a tool and not the rule” for NICE recommendations.

The Association of the British Pharmaceutical Industry initially presented its misgivings to the Commons inquiry about QALYS in its written evidence, but at last week’s session, its spokesmen also pointed out that the health authorities in Sweden now also use severity of illness and clinical need to determine the threshold at which cost-effectiveness is determined. This approach has led to Sweden making a number of recommendations which differ from NICE’s, for example in the case of Millennium/Janssen Cilag’s cancer drug Velcade (bortezomib) and Eli Lilly’s mesothelioma treatment Alimta (pemetrexed).

Moreover, NICE’s initial decision, on the basis of the QALY alone, that Velcade was not cost-effective, indicated that this measure is a disincentive for firms to “make leaps”- conduct R&D into unmet medical needs - the industry spokesmen warned.

Fairer decisions?

At an earlier evidence session, NICE’s chairman Prof Sir Michael Rawlins acknowledged that the QALY does not take into account the severity of the underlying condition which the drug is being used to treat, adding: “intuitively, I am not sure that is right.” This is the way it is done now in most developed countries, and any change would be big, he said, but added: “I think it is the sort of area where we should be prepared to change, if we have evidence that it would give a more equitable, fairer answer.”

MPs have also heard conflicting views about the cost/QALY threshold – the amount which, under NICE appraisals, the NHS can spend on extending a patient’s life for a year. The range is £20,000-£30,000, but additional factors can come into play above the £30,000 and “social value” judgements are added in, according to Felicity Harvey, head of the Medicines, Pharmacy and Industry group at the Department of Health. “I think what we need to remember is that, as a result of these, you do actually very expensive treatments through the NICE process,” and these have included Roche’s breast Herceptin (trastuzumab), Johnson & Johnson/Schering-Plough’s Remicade (infliximab) and Eli Lilly’s Gemzar (gemcitabine), Dr Harvey told the MPs.

Sir Michael had described the QALY to the panel as “a reasonably robust approach,” but added: “the important thing is that we recognise that not everything can be expressed necessarily in QALYS.” NICE expects its advisory bodies to use these measures, plus other assumptions, calculations and estimates, to inform decisions but not be ruled by them. “That is why…. we do not have a strict threshold of £30,000 and you are out if it is above. We have been as high as £48,000 before on one occasion,” said Sir Michael, adding: “we use it as a tool but not as the rule.”

Nevertheless, at the June 28 evidence session, Stirling Bryan, director of the health economics facility at the University of Birmingham, assured MPs that the £20,000-£30,000 cost-effectiveness threshold is “definitely a real threshold.”

“I sit on the appraisal committee of NICE and so I see it being used,” said Prof Bryan. “When we have examples of technologies that are above that threshold there is very little opportunity for them to receive a positive endorsement. Where we have results from cost-effectiveness analysis that fall well below that threshold, we see those technologies being supported universally,” he stated.

Setting a threshold

An alternative approach to setting the threshold could be to ask patients and prescribers how the cost of health compares with, say, the cost of their mobile phone or car, suggested Raymond McAllister, professor of clinical pharmacology at University College London. They could be asked, for example, what choices they would make, depending on the cost of a particular drug, and if they would be prepared to pay the extra cost for the added benefit of that drug. This would provide some feel for how society values the cost of health care, he said.

Ian Beaumont of Bowel Cancer UK called on NICE to get involved in the R&D process at a much earlier stage, specifically for the revolutionary new drug treatments for bowel cancer which are emerging.

“To try to value the efficacy of an individual drug within the QALY system, in particular NICE’s view of overall survival, is…not sophisticated enough,” Mr Beaumont told the panel. He called for NICE to be looking at progression-free and disease-free survival after surgery, instead of finding the QALY and the overall survival rate. “If NICE’s appraisals and reviews were more in line with the way drugs actually worked, then their method of evaluating them would be more meaingful – the way it works at the moment is just too broad-brush,” he said.

QALYS are the currently the best tool for understanding the opportunity cost of a implementing NICE decision, ie, what this means the NHS will not be able to spend on something else, and it is important that this tool is applied consistently, said NICE chief executive Andrew Dillon. Economic modelling, which generates the QALY, is better now than when the Institute came into existence, but improvements are still needed in the extent to which quality-of-life measures are incorporated in terms of manufacturers’ clinical studies, he went on, stressing: “we need that quality-of-life data.”

QUALYs and drug costs

Earlier in last week’s hearing, health officials had expressed conflicting views when asked whether NICE should be able to influence drug prices. Gill Morgan, chief executive of the NHS Confederation, had rejected the idea, pointing out that assessing value for money requires a completely different set of political and societal skills to those needed to assess cost-effectiveness. Costs per QALY have nothing to do with drug costs, she stressed.

However, Tim Crayford, president of the Association of Directors of Public Health suggested that, with the Office of Fair Trading’s recent recommendations that the current Pharmaceutical Price Regulation Scheme should be replaced with a system of value-based pricing, there could be a role for NICE to be able to state that the NHS would be prepared to pay a certain amount for a given level of effectiveness.

The Select Committee, which plans to hold at least another oral evidence session in the autumn as part of its NICE inquiry, was told that the cumulative cost of the Institute’s appraisals so far is £1.2 billion.

This report includes comments taken from the uncorrected transcript of the Committee’s oral evidence sessions, which neither the witnesses nor the Members have had the opportunity to correct.