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Pharmaceutical industry regulation undermines NICE drugs appraisal work

System lacks accountability and evidence base, say health economists

Caroline White

Wednesday, 29 April 2015

The system for pharmaceutical industry regulation lacks accountability, is not evidence based, and undermines the drugs appraisal work carried out by the National Institute for Health and Care Excellence (NICE), argue health economists in the Journal of the Royal Society of Medicine.*

Professors Alan Maynard and Karen Bloor, of the Department of Health Sciences at the University of York, say the technology appraisal work carried out by NICE, has been a target of pharmaceutical industry hostility since it was established in 1999.

They highlight the evaluation of end-of-life products such as cancer drugs. In 2009, NICE was instructed to increase the threshold of the cost: QALY ratio (where a QALY is one year of good quality life) for these drugs from £30,000.  

If a product is shown to produce a QALY for an acceptable cost, NICE approves it for use in the NHS and commissioners are obliged to fund it.

Provided firms do not exceed regulated rates of return on historical capital set out in the Pharmaceutical Price Regulation Scheme agreements, they are free to set their own prices.

“This system is inflationary and has added billions to NHS costs since 1999, partly because the cost-per-QALY threshold is relatively high, contentious and is not evidence-based,” say the economists.

Also singled out for criticism is the Cancer Drugs Fund, which allocates £280 million a year to cancer drugs not approved by NICE on a case-by-case basis.

The Coalition government renewed and increased the Cancer Drugs Fund to serve two political goals: the garnering of votes from public interest groups and the subsidisation of the pharmaceutical industry, they say, describing the Fund as an unfair and inefficient scheme.

“It is inefficient because pharmaceuticals are financed regardless of whether they meet an appropriate cost-QALY threshold, subverting NICE processes. It is inequitable because it discriminates against other diseases which may be equally in need of additional funding,” they write.
To illustrate how policy may support the pharmaceutical industry at the expense of the NHS, the authors point out how switching patients with age-related macular degeneration from one drug to another very similar drug that is licensed for the treatment of colorectal cancer could save the NHS in England £100 million each year.

However, licensing issues and the threat of legal challenges from the pharmaceutical industry are thwarting NHS commissioners seeking greater efficiency in the use of their constrained budgets, they contend.
They suggest that: “Government continues to subvert the efficiency of technology appraisal work carried out by NICE in order to subsidise industry.”

And they ask: “Does this benefit the UK taxpayer and NHS patients? Or does government tacitly wish to tax the NHS with high pharmaceutical prices of sometimes inefficient drugs and, in so doing, increase the wealth of industry?”

* Alan Maynard and Karen Bloor. Regulation of the pharmaceutical industry: promoting health or protecting wealth? J R Soc Med April 28, 2015 0141076814568299

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