Change is needed, concedes NICE chief, but defends record
pharmafile | November 30, 2010 | Feature | Sales and Marketing | Andrew Dillon, NHS reform, NICE, cost-effectiveness, health technology assessment, hta, value-based pricing
The chief executive of NICE acknowledges changes are needed in how drugs are assessed in the UK – including more direct negotiations on price with the pharma industry.
Sir Andrew Dillon told Pharmafocus he is in agreement with the government on its plans to introduce a value-based pricing (VBP) system in 2014, even though it will also mean NICE losing its power to decide which drugs should be used on the NHS.
Sir Andrew made the comments in his first media interview since health minister Lord Howe revealed NICE will be stripped of its power to issue binding guidance to the NHS.
Initially saying NICE would be made “redundant” by VBP, Lord Howe has since stressed the ongoing importance of the Institute, but it is clear NICE’s role as the final arbiter on drugs access will end in 2014.
Many commentators have criticised the government’s plans to take this responsibility away from NICE, but its chief executive insists its role will remain undiminished.
Since being set up in 1999, NICE has issued guidance to the NHS on what drugs should be used, but neither it nor the Department of Health has been able to negotiate prices with the pharma industry.
High prices and relatively modest benefits for patients is the most frequent reason for NICE saying no to drugs, particularly new cancer treatments like Avastin. Damaging rows over access to life-extending treatments have frequently resulted, and the UK lags behind the rest of Europe in terms of access to new drugs.
Since becoming health secretary in May, Andrew Lansley has taken a number of steps to end the politically damaging controversies. The first of these was the setting up of an annual £200m fund to pay for cancer drugs which NICE has rejected or restricted their use.
Then, from 2014, VBP will allow the government to negotiate with pharma directly on price. Under this system, NICE will continue to appraise new drugs, but will no longer issue the binding ‘recommends’ or ‘does not recommend’ notice to the NHS. Instead its assessment is likely to be passed onto government officials who will negotiate a launch price for the drug.
Speaking exclusively to Pharmafocus, Sir Andrew said it was time to move the process forward.
“I think everyone recognises – the government, and I imagine the pharmaceutical industry as well – that we need to build in elements that enable us to go beyond the point that NICE technology appraisals currently include.”
The introduction of VBP will bring pricing discussions out into the open for the first time, and the government will hope it can resolve problems which earlier tinkering with NICE’s system have failed (see box).
Dillon was unwilling to talk about the removal of its powers to provide guidance to the NHS, but is sure NICE will not be diminished by its changing job description.
He said it would “continue to be at the heart of the new architecture”, but refused to speculate on exactly how the system will work before the government launches its consultation in December.
Dillon says it is clear that after ten years of NICE, pharma companies now have a “pretty good understanding” of the way in which judgments are made by NICE’s advisory bodies.
This means pharma companies aren’t surprised that higher prices are a major cause of ‘no’ decisions from NICE, but simply can’t or won’t back down on prices.
Dillon said: “[Negative decisions come] typically when there’s insufficient benefit or if the benefit is so uncertain then the judgment of the ICER and the advisory committees cannot justify the prices the companies are asking for.”
Media criticism of NICE
The Daily Mail has been a consistent and vocal critic of NICE, and declared Lord Howe’s comments to be a ‘victory for patients’.
Asked about the Daily Mail’s relentless attacks, Dillon refused to condemn the paper’s editorial stance, but quietly suggested its position is unrealistic, seemingly believing that the NHS “ought to make available automatically” any new drug launched.
He added that many popular commentators believe “those decisions ought to be taken by physicians and patients and that this decision shouldn’t be fettered by other influences, including NICE.”
The belief in clinician-led decision making is, however, something very close to the line taken by the health secretary Andrew Lansley. He has championed GP-decision making and his radical White Paper reforms aim to hand them majority financial control of the NHS by 2013.
Spectre of postcode prescribing
Despite their antipathy towards NICE, UK pharma companies are wary of how the proposed VBP system will work.
Richard Barker, director general of the ABPI, recently said that VBP wasn’t a “magic bullet”, and that the government shouldn’t believe that this system would help reduce prices.
Pharma companies are also concerned about a return to the problems of postcode prescribing as each individual GP consortium will be free to make its own decisions, meaning that there could be great variation between regions.
Dillon said: “I think it’s very important that whatever the system will be, that it will ultimately make good decisions about what is provided locally.”
Dillon did imply that postcode prescribing could be limited by NICE in its new role, as “good decisions” could be made from the evidence from the body that looks centrally, rather than regionally.
A view from the pharma industry
Paul Catchpole, director of value and access at the ABPI, said he believes frontline doctors are better placed to make decisions on their patients’ needs, although quite how this will dovetail with a nationally negotiated VBP system is unclear.
He said that much still needs to be done by the industry, and by NICE itself, in respect of how to best deliver new concepts in the value-based pricing of medicines.
“This calls for a markedly different approach to the assessment of medicines than is currently undertaken within NICE’s health technology appraisal systems.”
NICE AND PATIENT ACCESS SCHEMES
Patient Access Schemes, whereby pharma companies offer price discounts on their medicines in line with how well patients response to them, have proven to be only marginally successful.
The schemes, originally known as ‘risk-sharing’, were introduced in 2007/08 as a method to increase the uptake of new cancer drugs.
Janssen’s Velcade
The first successful drug to pass through this system was Janssen’s multiple myeloma drug Velcade, which was passed through NICE’s appraisal system in a ‘response-rebate’ scheme in 2008.
This scheme allowed those patients who responded to the drug to carry on with their treatment and have this fully funded by the NHS. Those patients who showed no response would subsequently be taken off the drug, with costs refunded by Janssen.
Roche’s Tarceva
Roche also scored an early success with this type of scheme for its lung cancer drug Tarceva, but only after an 18-month wrangle. The company managed to have its drug recommended by NICE after it effectively offered a 10% price cut on the treatment.
These early decisions were heralded to be a new way forward between NICE and the pharma industry on the uptake of new cancer drugs, but the PAS has not lived up to initial expectations.
Roche has not been so lucky in getting Tarceva through NICE’s system as a maintenance therapy. The Swiss pharma firm has offered a 14.5% price cut, but NICE is still not satisfied and in its latest draft guidance released in November, the body was still minded not to recommend the drug.
Roche’s Avastin
Roche has also suffered a major headache with the colorectal cancer indication for its drug Avastin. It was first rejected in a series of appraisals in 2007 and NICE is still minded not to recommend the drug in a second, ongoing appraisal.
Roche’s PAS for Avastin means it would supply the drug for a fixed cost of around £20,800 per patient for one year and would be free after 12 months of cumulative treatment, and it would also reimburse the cost of the oxaplatin, the chemotherapy agent used in conjunction with the drug.
In a recent addition to sweeten the deal, Roche would also include an additional upfront payment to the NHS for each patient starting Avastin as a first line treatment.
However, clinical trial data shows that Avastin plus certain chemotherapy agents would extend life by only six weeks – NICE says this does not justify cost, even with the PAS.
GlaxoSmithKline’s Tyverb
Final guidance released in September for GlaxoSmithKline’s breast cancer drug Tyverb recommended that the drug be restricted to use only in clinical trials.
GSK originally offered a PAS to lower the cost to the NHS, under which the drug would be free to patients in the first 12 weeks of treatment.
It had been looked at in conjunction with Roche’s Xeloda, but NICE felt that Tyverb did not represent good money for value against Xeloda as a monotherapy, and did not recommend on these grounds.
Ben Adams
Related Content
Combination treatments: Takeda’s Implementation Framework and the broader landscape
Pharmafile talks to Emma Roffe, Oncology Country Head (UK & Ireland) about the combination treatment …
NICE recommends Pfizer’s new once-weekly treatment for haemophilia B on NHS
Walton Oaks, 21st May 2025 – Pfizer Ltd announced today that the National Institute for Health and Care …
Dual immunotherapy for bowel cancer now available under NHS
Dual immunotherapy, a combination of Opdivo (nivolumab) and Yervoy (ipilimumab), has been granted extension in …
