This is a repository copy of Pharmaceutical Pricing : Early Access, The Cancer Drugs Fund and the Role of NICE.

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1 This is a repository copy of Pharmaceutical Pricing : Early Access, The Cancer Drugs Fund and the Role of NICE. White Rose Research Online URL for this paper: Version: Accepted Version Monograph: Claxton, Karl Philip orcid.org/ (2016) Pharmaceutical Pricing : Early Access, The Cancer Drugs Fund and the Role of NICE. Discussion Paper. Policy & Research Briefing. Centre for Health Economics, University of York Reuse Unless indicated otherwise, fulltext items are protected by copyright with all rights reserved. The copyright exception in section 29 of the Copyright, Designs and Patents Act 1988 allows the making of a single copy solely for the purpose of non-commercial research or private study within the limits of fair dealing. The publisher or other rights-holder may allow further reproduction and re-use of this version - refer to the White Rose Research Online record for this item. Where records identify the publisher as the copyright holder, users can verify any specific terms of use on the publisher s website. Takedown If you consider content in White Rose Research Online to be in breach of UK law, please notify us by ing eprints@whiterose.ac.uk including the URL of the record and the reason for the withdrawal request. eprints@whiterose.ac.uk

2 P P E Access, The Cancer Drugs Fund R NICE Policy & Research Briefing March 2016 A B C Acknowlegements: T transcript of a speech given at the Westminster Health Forum in January T comments received from Mark Sculpher M S A responsibility of the author. Project team: Karl Claxton. F Centre for Health Economics, University of York Karl.Claxton@york.ac.uk T unsustainable, it s unsustainable for the NHS and it s also unsustainable I NHS access and an early return on their investments. The real problem has been, and remains, the discrepancy NHS An evidenced based and accountable assessment of the N I H Care Excellence (NICE) has done an excellent job over the years in taking account of other evidence to NICE the NHS. Not just the cost of the drug itself but all future NHS costs, H NHS I health could have been gained NHS W opportunity costs are likely to be across the NHS. Recent research NHS expenditure on the health of all NHS T NHS resources adds one Quality Adjusted Life Year (QALY) to the NHS S NHS year is likely to lead to the loss QALY increased mortality and reduced survival in cancer, circulatory, in neurological diseases and mental What does this mean for the NHS? One thing it means is that increasing expenditure on the NHS appears to be very good QALY NHS W have evidence that every QALY gained or lost through spending NHS I NHS pays for itself. Recent research also suggests that NHS expenditure Y QALY NHS improvements in health. If you do, reallocate public expenditure. I NICE What does this mean for NICE? NICE says it uses a threshold range QALY This range is based on the values implied by the decisions NICE but over recent years it generally per QALY. In fact, the most recent evidence indicates that, on average, QALY T NICE more harm than good to

3 QALY QALY T NICE accelerate the net harm and increase the scale of the net harm done to the rest of the NHS. T A A R C D F V Based Assessment, have all failed to address this fundamental problem. Instead they appear to ignore or deny it. That denial F NHS been ignored by NICE is profoundly mistaken. The principle of the methods of NICE appraisal. Some suggest that the measure of health adopted by NICE QALY B W A C NHS S W S NHS W T is that prices are not determined by the costs. The costs T I there is a normal return on those investments. Costs don t I S NHS supported and investment in research and development UK D Much more important is investment in the type of basic environment in the UK is the best place to develop and U UK T C D F The Cancer Drugs Fund has been a real lesson T CDF T T CDF I B A E QALY CDF to one. A I P P R S PPRS I NHS N NHS W CDF NICE chance they might T NICE T CDF it has in the past. T T NICE and become eligible for CDF funding because there remains T to price as high as possible. All manufacturers should expect CDF T CDF as are as high as possible. Of course, there also remains a NICE R I A T QALY QALY NHS QALY

4 establish a high price at the outset. P I CDF E W I T N I evidence based medicine. T NHS CDF W N A mechanism to take a more sensible approach is available. I NICE NICE should only be used in the context of research and make NICE MRC NICE T NICE R in research means that the type of randomised trials that I NICE or rejected. O that have access to current NHS care and those that also W I C D F outcomes. T P P R S T T P P R S agreed caps on NHS spending on branded drugs. Rebates I I NHS I and can be agreed. W PPRS W NHS I I produce valuable drugs and are responsible in their pricing. F I to retain the greatest share of capped expenditure. Also, prescribing costs that fall directly on their budgets. As a T PPRS A manufacturers could point to the fact that the caps on expenditure have been exceeded and should be increased. U NHS NHS UK D H T NHS T T T I A NICE PPRS T NHS

5 T I NHS I rebates. Manufacturers also need to be able to set prices UK T T PPRS NHS asking manufacturers to change their prices for the UK. M For example, NHS England and the Department of Health T of commissioner and prescribers facing high prices falling A are agreed and local prescribing costs are fully reimbursed, NHS T NICE on the evidence. Manufacturers can then decide if they I I NICE I transparent assessment of the evidence. L NICE NHS F NHS O F NHS expenditure on mortality outcomes. The important thing is that this research demonstrates that it is an empirical A ongoing evidence based and accountable assessment of clear and predictable signal they need in making good NHS References: C K M S S M R N S E H S M N I H C E H W E F C K S M P S C AJ C NHS H E J J L K S G R C D E gains and losses from marginal changes to NHS expenditure in England. Health E S G M J R MD C AJ N I C E BMJ D H D N F Y T NICE H E S E N A O I C D F HC S S C K B A B MJ C AJ M C C W S V NHS B M J F G SC C KP P SJ S MJ D H E F C K P S L L B L G S M K C I NICE of health technologies only in the context of an appropriately designed H T A M K C S M C K B L G S P S U R R D C S D S A J R V S A C K OFT VBP QED H E M C K S M C S V NHS C H E U Y CHE R P Centre for Health Economics University of York Heslington York YO10 5DD UK Tel: Fax: che-news@york.ac.uk