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NICE is ‘setting prices too high’ for NHS

Published on 19/02/15 at 12:02pm
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The cost threshold NICE uses when approving drugs is too high and is doing more harm than good, new research claims.

NICE currently considers a new drug cost-effective if it costs up to £20,000-£30,000 for each Quality Adjusted Life Year (QALY) it adds to patients. However, health economists from the University of York say this is excessive because the NHS usually only uses £13,000 of its resources to add one QALY to the lives of its patients.

In their model, a new drug that costs the NHS £10 million a year will provide 333 QALYs, but the high amount spent on that drug would mean that 773 QALYs would be lost from other patients.

“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,” says study co-author Professor Karl Claxton. “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.”

The researchers conclude that the NHS is paying too much for new drugs as the amount it can afford to pay for their benefits is lower than previously thought. They point to the Cancer Drugs Fund as being particularly harmful, with its £280 million budget estimated to cause a loss of almost 22,000 QALYs.

However Paul Catchpole, the ABPI’s director of value and access, says that although the research “is likely to be of some academic interest” it should not be used “as a basis for policy or decision-making”.

He explains: “Very few healthcare decisions are made using the QALY alone and in reality a wide range of other factors are used for decision-making.”

Sir Andrew Dillon, chief executive of NICE, says that the watchdog believes the £20,000-£30,000 per QALY threshold “represents a reasonable compromise between ensuring everyone has fair and equitable access to the NHS and enabling access to new and innovative treatments”.

He adds: “Unless you think that drug companies will be prepared to lower their prices in an unprecedented way, using a threshold of £13,000 per QALY would mean the NHS closing the door on most new treatments.

“At the other end of the spectrum, we obviously can’t just say yes to anything and everything. We don’t have enough money and anyway, not everything is worth having. And drug companies need the discipline of a critical market to make sure that price matters.

“Over the last 16 years, we’ve achieved a balance between these two extremes that reflects what we believe the public expects the NHS to do.”

George Underwood

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