Cost effective but unaffordable: an emerging challenge for health systemsBMJ 2017; 356 doi: https://doi.org/10.1136/bmj.j1402 (Published 22 March 2017) Cite this as: BMJ 2017;356:j1402
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NICE’s Carole Longson suggests that our recent editorial on NICE’s new affordability test indicates that we “have misunderstood its primary purpose” . We beg to differ. We are acutely aware of the need to minimise costs to the NHS, as the recent update to the Five Year Forward View underlined . The crisis facing the NHS requires more—not less—debate about how NICE and NHS England (NHSE) should address the challenge of drug cost inflation.
In its response, NICE seeks to downplay the significance of the new budget impact test . In addition to affecting only a “minority of drugs”, the test will apparently lead to only minimal delays, as price negotiations will begin “well before” appraisals and “be completed by the time NICE publishes its guidance” . If this is the case, why is the new budget impact test needed at all? NICE can already waive the 90-day funding requirement if it considers that the recommended technology “cannot be appropriately administered until other appropriate health services resources […] are in place” .
NICE argues that the new test does not seek to delay access to cost-effective technologies, but aims to trigger price negotiations with industry . Stephen Duckett rightly points out that if this frees up money to be spent gainfully elsewhere, it may be ethically justified . However, the ethical imperative to minimise costs exists for all technologies, not just those costing more than £20 million a year. In addition, the Pharmaceutical Price Regulation Scheme (PPRS) already guarantees the Government a rebate when its annual cap for drug spending has been reached—a routine event in recent years . It would be a shame if upfront price discounts simply replace the existing PPRS repayment, leading to a small cash flow advantage but no actual cost reduction.
Greg Fell questions the fairness of how NICE and NHSE currently judge value for money for health services . We believe that NICE’s “ethics of opportunity costs” framework is generally fair . However, the new budget impact test increases rather than reduces unfairness, particularly if access to some technologies is “phased in” gradually as NICE suggests , raising the prospect of inequities arising not just between patient groups but also within them. It is important that this debate on affordability continues to ensure that the NHS achieves maximum value for the money it spends on drugs .
With thanks to Catherine Max for her contributions to both the original article and this response.
1. Longson, C. Re: Cost effective but unaffordable: an emerging challenge for health systems. BMJ 2017;356:j1402.
2. NHS England. Next steps on the NHS five year forward view: NHS England, March 2017. https://www.england.nhs.uk/wp-content/uploads/2017/03/NEXT-STEPS-ON-THE-...
3. Duckett, S. Re: Cost effective but unaffordable: an emerging challenge for health systems. BMJ 2017;356:j1402.
4. Ward A and Neville S. ‘Pharma groups to pay NHS £550m ‘rebate’’. Financial Times, December 23 2015. https://www.ft.com/content/6c34f7de-a966-11e5-843e-626928909745
5. Fell G. Re: Cost effective but unaffordable: an emerging challenge for health systems. BMJ 2017;356:j1402.
6. Rid A, Littlejohns P, Wilson J, et al. The importance of being NICE. Journal of the Royal Society of Medicine 2015;108(10):385-89. doi: 10.1177/0141076815598877
7. Charlton V, Littlejohns P, Rid A, et al. Cost effective but unaffordable: an emerging challenge for health systems. BMJ 2017;356:j1402.
Competing interests: No competing interests
Fairness in implementation would be the critical aspect of this policy.
As long as NICE implements their "imperfect" proposal in a fair manner, many people might come around to supporting it.
A condition/disease (eg breast cancer) which has significantly more lobbying power should be treated in the same manner as a condition which has less lobbying power (eg ovarian cancer).
Competing interests: No competing interests
The NHS is facing enormous pressures as demand increases and resources are tightened to unprecedented levels. NICE has always had to align its guidance with the ambitions and constraints under which the NHS operates. The introduction of a budget impact test is just the most recent example of how this alignment is maintained.
In condemning the budget impact test as inequitable, the authors have misunderstood its primary purpose. The test identifies when NHS budgets may be at risk of being destabilised by new treatments and for the risk of that happening to be managed, in whole or part, through negotiations which will begin well before, and will be completed by the time NICE publishes its guidance. By doing this, positive guidance on high budget impact treatments has the best chance of being implemented as soon as the guidance is published.
Budget impact and the application of a budget impact test, will not influence NICE’s judgements on the clinical and cost effectiveness of a technology. NICE will continue to recommend clinically and cost effective health technologies, regardless of their impact on NHS resources.
We know from looking at technology appraisals we have published over the last two years that only minority of drugs have a net budget impact in excess of £20 million, in any of the first three years of their use in the NHS. Fewer still will need a longer period (than the standard 90 days) to manage their adoption by the NHS, after the effect of commercial negotiations and the impact on patients have been taken into account. Even when a longer period is needed, funding will be phased in from the start.
There is no cap on the amount of money the NHS will spend on a new drug that NICE recommends. The £20 million net annual figure is simply the trigger for the commercial negotiation, not a maximum amount the NHS will pay in any one year.
NICE can consider extending the standard 90 day period if it considers that one or more of the criteria is satisfied. One of these criteria indicates that NICE may vary the funding requirement if it considers that: ‘the health technology cannot be appropriately administered until other appropriate health services resources, including staff are in place’. By considering applications from NHS England to phase in funding for high budget impact technologies over a longer period, we are properly interpreting ‘health services resources’, to include the immediate allocation of funds, which can be made available without putting other services at risk, and to ensure that the administration of a new technology does not unduly risk disrupting other services.
Consultees will be able to give their views on any request made by NHS England for more time to introduce a new treatment, before NICE makes a decision.
Competing interests: Director at NICE.
There are two proximal stakeholders in the decision to list a new drug: current patients who will benefit and the drug company who gains revenue from selling the drug. Charlton et al argue that delaying introduction damages the former group. There are also more distal stakeholders in particular taxpayers and future patients.
The price charged by pharmaceutical companies is a business decision and its decision in England sets a precedent for other developed countries. Nevertheless, the market in England is large and so can generate a large revenue stream for the company. NHS England thus has important leverage and bargaining power.
Assuming the NHS budget is capped, which as the authors point out is a political decision, and that any money saved by negotiating a better price is retained in the NHS, the question at issue is whether slowing introduction is ethically or economically reasonable. If NHS England is able to negotiate a better price in the 'delayed introduction period', then economically the issue becomes whether the benefits foregone by delaying the introduction of the drug are worth the benefits which will be realised by spending the money now available on a different class of patients. The answer to that is unknown and depends on the incremental cost-effectiveness ratios of the delayed drug and the alternative use to which the money released by a better price is put.
A time limit on negotiations means that the patients who are adversely affected and those who will gain are not too separated in time.
Unfortunately, the Charlton et al paper does not consider the alternative use of the saved money so one could argue that the full ethical implications have not been considered.
Competing interests: No competing interests
I enjoyed reading the Charlton et al editorial.
It succinctly describes the key challenge at the heart of NICE and why the responsibility for budget impact wasn't set up within NICE at the time Of inception. This is an issue that deserves a far wider debate.
It was a timely reminder of a problem that isn't actually "an emerging challenge" - but something that emerged many years ago and the NHS has been struggling with for some time. What us emerging perhaps is NICE suggested solution.
Yes of course it is flawed. There is no perfect way out of this.
Charlton et al point to the implementation of the solution leading to delayed access of patients to innovative drugs. This may be true and is obviously troubling. It may be worth remembering that often many of the treatments appraised through the TA process are pretty close to the margin in terms of cost effectiveness, way above it if one uses the Claxton work on thresholds. Often the drugs appraised offer pretty marginal clinical benefits and many others are denied treatment as as result of the opportunity cost.
Similarly I was struck with the example of the application of the budget impact model and how that might set up inequity between those with Crohn's disease and ulcerative colitis.
Is this inequity worse than the inequity of access to aTNF for conditions that are subject to a NICE TA compared to those that aren't? Or inequity in terms of the many thousands of highly effective interventions and services that don't get funding priority afforded by a TA compared to the few, often marginally effective, treatments that do. Do we wonder why we've never scaled up investment in mental health? Some may suggest the oncoexceptionalism that is the Cancer Drug Fund may be as good a place as any to start looking.
I agree the solution is political. It's also social. I agree the solution derived by NICE has its problems. NICE should be congratulated for trying.
Competing interests: I have been a member of a NICE TA committee in the past, I have done work for Bayer Healthcare in an advisory capacity, my previous employer was reimbursed for my time