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England’s medicine prices ‘too high’

New analysis finds NICE is too lenient on pharma’s price tags


NICE is paying too much for new drug treatments and this hurting patients and the NHS, according to research publish today by health economists from the University of York.

The specialists say high drug prices risk harming patients and are taking services away from other areas of the NHS. 

NICE's current system for assessing how cost-effective a medicine is uses a quality-adjusted life years (QALY) system. The watchdog sets the limit for this at £30,000 per QALY gained. 

Professor Karl Claxton, professor of health economics at the University of York and his colleagues, argues that the QALY threshold should be dropped by more than half to just £13,000. Above that level, other patients will pay the price in inferior treatment.

NICE has a long history of saying no to costly drugs, notably oncology medicines, because of their price. 

However, it has also allowed through some very expensive treatments, such as Bristol-Myers Squibb's Yervoy (ipilimumab), which costs around £80,000 per patient, and more recently Gilead's hep C pill Sovaldi (sobusifivir) that has a price tag of around £35,000 per course of treatment.

According to the NHS data monitoring service the HSCIC, the spend on medicines in England for April 2013 - April 2014 was £14.4bn, up from the £13.3bn the year before, and growing despite a number of key UK drug patents losing protection, such as Pfizer's blockbuster statin Lipitor (atorvastatin). 

Where NICE is not paying for oncology products, the government has created a £280m a year silo Cancer Drugs Fund. The total spend for this is expected to reach more than £1.2bn by 2016. 

Co-author of the research Prof Claxton, who has been critical of medicine prices before, said: “Our research makes the unidentified NHS patients who bear the real costs a little more real. 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.

“I think the implications of this work are that if we stopped spending money on drugs that are more than £13,000 per quality-adjusted life year, we would improve health outcomes overall for the NHS.”

Sir Andrew Dillon, chief executive of NICE, hit back at the research, saying: “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.

“Drug companies need the discipline of a critical market to make sure that price matters. Over the last 16 years [since NICE's creation in 1999], we've achieved a balance between these two extremes that reflects what we believe the public expects the NHS to do.”

The research is funded by the National Institute of Health Research and Medical Research Council.

Article by
Ben Adams

19th February 2015

From: Sales, Regulatory



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