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David Haslam: NICE, drug pricing and ethics

Published on 02/06/14 at 01:22pm
Haslam image
Professor David Haslam, NICE chairman

Since 2010, I have spent a great deal of time of writing about NICE, covering nearly all of all its technology appraisals, interviewing its chief executive Sir Andrew Dillon on many occasions – as well as its former chairman Sir Michael Rawlins. But now, for a first, it’s time I met its latest chairman Professor David Haslam. 

Sir Andrew and Sir Michael were worlds apart: the former is the most savvy media operator I have encountered – he knows when to deflect questions, when to give just a snippet of an answer to make you think he’s given you the full one, and how to remove any personal feelings from the role. 

At an Economist Pharma Summit some years ago I spoke to Sir Andrew just after he had given a speech on NICE, and I asked him: “If you were to take your NICE hat off, just what do you think about drug prices – are they too high?” 

He smiled affably but said he couldn’t take his NICE hat off – it was there for a reason, and would remain so as long as he was working at the body. “Couldn’t you take it off, just this once?” No, he said smiling, and walked away.  

Sir Michael was far more candid, willing to give journalists either on or off the record comments covering exactly what he thought about issues affecting his organisation. When I
asked him what patients should do if NHS trusts weren’t giving them medicines the NHS has recommended, his answer was simply: ‘sue the bastards’. 

And what did he think of the government’s £200-million-a-year Cancer Drugs Fund that undermined NICE’s decision on new oncology products: “It’s a political drive aimed at appeasing worried voters.” 

But now NICE has Professor Haslam at the helm, a former GP who rose up the ranks to become president of the British Medical Association, before taking on his latest role at NICE a year ago. After a just a few minutes of speaking, it is clear that he appears to be a mixture of Sir Andrew and Sir Michael – candid on the issues he cares about, and quiet on those beyond the remit of NICE and himself. 

The evolution of NICE

This will serve him well as he arrives at a time when NICE is in a state of flux: just two years’ ago it looked as if the body would be severely downgraded and its ability to assess new medicines for their cost-effectiveness all but removed. 

This was the idea of the former Conservative health secretary Andrew Lansley, whose ideological baby value-based pricing (VBP) was set to turn drug pricing policy in the UK on its head. But as readers of Pharmafile will know, VBP died a long, slow death last year and was replaced with value-based assessment (VBA), a system that keeps NICE as the sole health technology assessor – along with adding new elements to its remit.

Haslam says: “It’s been a very interesting journey from the original development of VBP which Lansley originally put forward to where we are now – I’d say overall that it’s been an evolution.”

He says it took ‘a lot of work’ and discussion by groups within NICE and others to really unpick all the concerns that might have arisen from VBP. One of the major issues would have been the much derided and confusing element of adding ‘wider societal benefit’ into NICE’s QALY formula.

This would have meant that NICE would have had to look at the fiscal benefits to society for each individual. “I think the more we looked at this, the trickier it became,” Haslam admits. “We became aware that it wasn’t appropriate in any way at any time to discriminate purely on the grounds of age or, indeed, of sex.

"That’s an issue that we realised was coming from VBP as, if you’re looking at earning capacities, men sadly still out-earn women. That shouldn’t be the case but that’s where it is – and if we were to look at a fiscal benefit to society, we’d have to favour one over the other”.

It quickly became clear that VBP simply wouldn’t work so, in effect, it was quietly discarded and replaced with the compromise that is VBA, with the idea of a wider societal benefit now taking a back seat.

But does VBA sit more neatly within NICE’s remit? Haslam says that we are now “somewhere completely and significantly different from the original plans”, but that he’s ‘comfortable’ with where VBA is, at least at the moment. 

The caveat he adds, however, is that just exactly how VBA and NICE will work is still out for consultation until the summer – he will have to wait and see what issues arise from that before moving forward. Despite this, he’s still optimistic: “The reason for that is I think VBA gives our committees [those who appraise new drugs] much more guidance to use their judgement appropriately.

“Since becoming chairman, one of the critical roles of the NICE committees I have tried to ensure is for them to use their judgement, not just to follow simple algorithms. If we had simple algorithms that could do this, we could replace everyone with a computer, but that’s not the point: we’re here to make complex judgements on behalf of society.

"I think being able to take on board things like burden of illness and the wider societal impact of certain diseases is something that is really quite important, and VBA should allow us to do that.”

Cancer drugs

One of the main reasons that the government wanted to change drug pricing policy in the UK was as an attempt to increase market access for new medicines, especially cancer drugs. To this end, the government established the Cancer Drugs Fund (CDF) in 2010 to pay for drugs not recommended by NICE, or still under appraisal by the watchdog.

Just as Sir Michael saw it, Haslam is aware of its political undertones. When I ask him about its continued use after its 2016 end date, he tells me: “My ultimate aspiration is that there wouldn’t be a need for a separate Cancer Drugs Fund. 

“I want to find a way of coherently, across the system, having a methodology that addresses all the issues around cancer drug pricing and finds a solution. I understand the political drives – but it’s a pity they’re necessary.

“And it is easy to understand the politics – everyone is terrified of cancer, but as I said to the Health Select Committee during my appointment interview: there remains many other conditions like motor neuron disease or Alzheimer’s, for instance, which are just as tough – and ultimately you’re just as dead whether you die from cancer or something else.” 

But he points out that the majority of the time, NICE is in fact saying yes to new treatments. The latest data released by the watchdog shows that for cancer appraisals from March 2000 to February this year, NICE has said ‘yes’ 58% of the time. 

“But cancer drugs are extremely expensive,” Haslam says. “There’s no doubt the real issue is: is that the best use of the money for the health service? For any individual patient, of course you can come up with a powerful emotional argument that a drug for them should be spent on that person. But that isn’t extra money; that’s money that can only be spent once.”

Pharma versus NICE battles ‘must end’

I tell Haslam that one of my pet peeves over the years has often been the reactions by pharma firms to a NICE rejection, whether at the draft stage or a final recommendation. 

In the past two years, there has been an escalation in the PR push by companies attempting to deride NICE’s negative decisions, especially on new cancer medicines, using terms such as ‘perverse’ to describe rejections, and calling on the body to be reformed. 

This is almost always picked up by the press, notably the ring-wing tabloids in the UK such as the Daily Mail and the Daily Express – who then call on NICE to reverse its decision on ‘X’ miracle drug and produce a patient who has been taking it for years, and is still alive as a result. 

But within a few weeks this is all forgotten after a firm offers a patient access scheme that effectively lowers its overall cost to the NHS – and NICE waves it through – happy it now meets its cost-effectiveness threshold. 

I ask Haslam how necessary all of this is, and whether it becomes frustrating. “I certainly agree with you that there’s a predictability about the ‘dance of positions’ that happens whenever we’ve said ‘no’,” he says. “I’m always slightly puzzled by the criticism from the media which is normally aimed at NICE for saying no rather than at the industry for having high prices…you know it takes two to tango.” 

He also says that it’s ‘absolutely essential’ that NICE defends its position against such attacks; something Sir Andrew has been doing publicly a lot more during the past 12 months. “We have a complex task here – there are many people who would love us to say ‘yes’ to everything and I can understand that, but for everything you say ‘yes’ to, there is a downside, and it’s about getting that balance right.” 

So how can NICE and the industry get around these sort of PR battles? Haslam says the onus is on pharma, namely around its transparency around how it prices its drugs. This is key, he explains, as no one outside the boardroom doors currently knows how a company comes up with a price for a drug. 

“If we could have greater transparency about pricing, then a lot of this could be by-passed. It’s not just that drugs are expensive and NICE says ‘no’. If we could understand why – I mean really ‘why’ – these drugs are so expensive; well, this might have an impact on the way decisions are made. I think the industry is now understanding that there is a real need to be as transparent as possible – and the more we can do to avoid this drama each time we say ‘no’, the better.”

Greater transparency 

For Haslam, the transparency agenda doesn’t end at pricing, but extends to clinical trial data as well. Last year NICE took the bold decision to sign the AllTrials register, a UK initiative aimed at making pharma release all of its study information for its drugs, something that is not yet taking place. 

This was an assertive move because NICE is an arm’s-length government body and one that is in many ways legislated not to think outside its remit. But by signing AllTrials, this sent a strong message to the industry about what the watchdog expects. 

I ask Haslam whether he was happy to see new EU laws (namely the Clinical Trial Regulation) signed into life at the beginning of April, something that will go toward making more study data available in the future.

“Absolutely I am. But, to be honest, I’ve met a lot of people from the industry over the last year and had a lot of helpful, mainly off-the-record conversations – and I’ve found that most people from the industry absolutely get this [the need for transparency].

“They understand it from a point of view concerning the future of the industry: in terms of trust, in terms of their relationship with the public. For all these reasons, the issue of transparency is incredibly important. And I must say there are folks in the industry who are tearing their hair out looking at what happens to their reputation around some of these issues. And there is an answer [i.e., to be more transparent].

“So for me, we need greater clarity as to why drugs are priced as they are and establishing why they are as expensive as they are is key. And I know – I’m not naïve about this – I do understand that the pharma industry is not a charity.

“Most of the people I’ve met and work with are clearly committed to making a difference to patients and the public – but we just need to find a way in which the industry is both viable and transparent and is able to bring innovations to the market more speedily. 

“But at the same time we don’t want to simply say ‘yes’ to everything without being sure that the state is getting value for money in terms of cost-effectiveness.”

Drug prices: too high?

A routine question I ask senior NICE heads is about drug prices: are they too high and would NICE like to see them lower? The responses are varied, but mostly comprise offerings that I suspect deflect the real feelings of the interviewee.

But Haslam simply says he doesn’t know “because, again, there isn’t enough transparency as to how these prices are arrived at…I would be purely guessing if I tried to answer that”. He goes on: “But there is no doubt that many drugs, especially cancer drugs, are extraordinarily expensive, and we have to balance that.

“The fact that one particular sector [i.e., cancer] can be more vocal on their views on this is not always a good thing. Other conditions such as mental health issues, dementia, and so on are equally important, and can be equally life-threatening. So our responsibility at NICE isn’t to negotiate price, but rather to take a holistic view to the benefit of all the patients served by the NHS. That sounds a bit grand, but that’s effectively what we’ve been set up to do.” 

Patient access schemes

But when I ask him about more transparency coming from his body, he becomes a lot less candid. Since the creation of patient access schemes in the 2009 PPRS deal, pharma has been able to go to the Department of Health (DH) after NICE has rejected a medicine and offer a discount. 

The new deal gets sent back to NICE who will re-appraise the treatment on the new price, and will generally recommend it, should it fall within its £20,000-£30,000 QALY threshold. But just how much of a discount is offered has never been revealed: there is a ‘commercial in confidence’ clause written into the PPRS deal which bars NICE from saying what the new price is. 

Why? Because the UK is a pricing reference market to around 25 other important countries for pharma, and if its discounts there are known, this could drive prices down elsewhere. I ask Haslam whether a good start on the transparency drive would be for NICE to sit down with the DH and the ABPI, which represents the UK pharma industry, and agree to make this information public.

He replies: “I think that, whilst I might have personal opinions about this, I have to be clear about what NICE’s remit is and the DH’s remit is, and we do not get involved in that pricing discussion. I understand where your question is coming from, however.”   

But if he could, would he want NICE to have the ability to directly negotiate price and price cuts with pharma? This would surely cut out the middle-man, I suggest, and potentially speed up the time it takes for new medicines to be used by the NHS. 

“I think everyone working in the system would like one that was logical, as speedy as possible, encouraged innovation and new developments, and which got the right products onto the market quickly. If that required a re-think about who asked what to do what, then so be it. But it’s very much not an issue for NICE.

"So in an ideal world, yes, a faster, more logical system would be helpful. But at the moment there are benefits to the way we are going as well as it makes it absolutely clear what NICE’s role is.”

Rare diseases

One of the quieter additions to NICE’s remit was made last year, namely its new role to assess ultra-rare drugs for use on the NHS. This was, since 2005, formerly undertaken by the Advisory Group for National Specialised Services (AGNSS), but the UK government decided to remove this body in 2013 and hand over its reins to NICE.

Ultra-orphan medicines cater for an important patient population, as they represent a major unmet medical need and are in desperate need of effective treatments. But with rarity comes a price: the costs of drugs to treat ultra-orphan conditions are the highest of any type of medicine, typically coming with an eye-watering price tag of between £100,000 and as much as £400,000 per patient, per year. 

NICE cannot use its QALY formula as it would instantly bar any of these types of treatments from being recommended, and Haslam admits the body is still in a ‘learning mode’ when it comes to just how it should assess these drugs.

He says: “I think we are at the beginning of a really interesting new model that we’re all going to have to develop – that includes industry and regulators as well as NICE – to look at these much smaller patient populations.”

The fact that a model to assess these medicines has not yet been developed has been a source of frustration for Alexion, whose ultra-orphan drug Soliris (eculizumab) is currently under appraisal by NICE, but has faced continual delays. 

In fact, this drug was given approval for use on the NHS by AGNSS last year, but the government rejected it given the high cost – around £300,000 per patient – and gave it back to NICE to re-assess, causing something of a political hot potato between NICE, the government and Alexion.

But despite the problems, taking on the role of AGNSS is a positive development for NICE, Prof Haslam insists. “One of the things that has fascinated me about the NICE board since I joined is that I think we spend more time discussing ethics than we do discussing money.

“That’s because many of these issues [around rare drugs and drug costs in general] are extraordinarily ethical. To what extent, for instance, should a patient be disadvantaged because they have a very rare condition? Is it ethical to disadvantage someone just because they happen to have something that’s rarer than what someone else has got? 

“Well of course it’s not, but at the same time, the drug development costs for ultra-rare conditions are inevitably extremely high because it is a very small market.”

The link between the science and the cost is inextricable, he says, and believes that there is a “bigger and even more fascinating question” that’s coming out of all this, which relates to the new discoveries around genetics.

He says researchers can now identify small, sub-populations of patients within apparently common conditions, meaning that rather than having 100,000 patients with one condition, you actually turn out to have 1,000 patients with a rare disease.

But this brings new problems: “How are we going to assess those patients and how are drugs going to be developed for them? At the moment, an awful lot of drugs have to be studied in large groups of people to get the benefit for a few. If in the future we can identify who the few are before we study the drugs, what then happens to the drug’s costs? What happens to the analysis?” 

These are the questions that NICE is now dealing with, and it is certainly taking its new role seriously – although some in pharma would want them to find a working formula more quickly. 

NICE: a barrier to market access?

In April, at the ABPI’s annual conference, the lobby group released a new report suggesting, among other things, that market access in the UK was a real problem, and said that this was primarily due to health technology assessment bodies – i.e., NICE.

This is a drum the industry bangs on regular occasions, but it remains true that once a drug is approved for use in England, it can take between six and nine months for it to be funded by the NHS. This is a source of frustration for pharma, which wants the revenue as soon as possible, and patients who want to access the latest treatments.

I put the report to him and ask whether he sees market access problems in the UK and England specifically. 

“I don’t think it’s specific to the UK: the issue of market access, I think, is worldwide,” he explains. “I’ve certainly been involved in discussions in several countries – before becoming chair of NICE – about this issue and there is a desire from everybody to get the right drugs on the market as speedily as possible. 

“This may require new systems of adaptive licensing. If that were to be adopted around these methodologies, then those discussions need to be had. But I understand that pharma is keen to get drugs out earlier.” 

But it goes further than just NICE being – or not being – a barrier, he argues, and things could be sped up in many ways, not least by changes within the industry. "I think the large, multi-centre, double-blind, control-trial methodology isn’t necessarily appropriate for many of these conditions.

"As we go forward […] maybe trials need to be run differently. That’s because there are new ways of looking at how research and evidence can be developed and, really, we’re right at the beginning of that.”

There is so much still to do and NICE’s future is never guaranteed, especially when it is under attack from the industry and the media. Is his time as chair going to become just one long battle?

“Despite everything, I’m extraordinarily optimistic,” he says. “This is because so much is changing, and so rapidly, in terms of this combination of genetics and transparency. I’m very keen that NICE works with industry – I meet with them all the time and I understand what they’re trying to do and what their business model is.

“But in turn I also understand clearly what my responsibility is. Trying to find a way through what appears to be impasses, I think, is going to be really exciting and positive. But it does all come down to trust.” 

Ben Adams

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