Following much hype and fanfare at the Olympics, news reports have begun to trickle out on the costs of the Games and the longer term impact they might have on the British economy. While not immune to Europe’s economic spluttering across the Channel, many of the issues facing Britain’s bottom line are unique, and they may have broader implications for drug development, more specifically for drug pricing and reimbursement.
The British government provides healthcare to residents through the National Health Service (NHS). (Similar, but not identical, services exist across the broader UK for Wales, Scotland and Northern Ireland). This includes covering the costs of general doctors’ consultations, emergency medicine, surgeries, some dental and ophthalmological services, and, to a certain extent, medical devices and drugs. Although funded centrally, the NHS is run at local levels, with specific administrations overseeing much of the organisation’s work. Healthcare is one of the largest line items on the British budget each year, expected to cost around £130bn in 2012/2013, around 5% of the UK’s GDP.
Part of this cost is due to the fact that the NHS covers the cost of medical therapies when it’s believed cost effective to do so. An independent NHS body – the National Institute for Clinical Excellence, or NICE – is charged with making evaluations and recommendations as to the most appropriate technologies to address health issues, based on their clinical effectiveness and cost-effectiveness, using a specific technology appraisals system.
The appraisal system, although seemingly convoluted, tries to take into account a large number of stakeholder views in order to appraise technologies, including patients, treating physicians, experts in the relevant field(s) of medicine and manufacturers of the technology (either a drug development company or a medical devices company). Following the review, a final appraisal is published and used by the NHS at a local level to determine which technologies to fund. A positive NICE recommendation means a technology must be reimbursed by the NHS. An unfavourable review means locals NHS bodies may still reimburse a technology, but are not obligated (and thus far less likely) to do so. Of equal significance is that NICE’s technology appraisals have become a watermark for other countries’ reimbursement bodies, meaning decisions have a flow on effect, particularly in Europe.
For new medical technologies, an additional body exists to help NICE prior to its formal review: the NIHR Horizon Scanning Centre (NHSC). The NHSC conducts formal reviews of emerging medical technologies with the goal of providing briefings to relevant NHS bodies (including NICE) on the technology and its impact (both in terms of treating patients and in terms of potential economic costs). This information can then be fed into technology appraisals, where relevant, and may assist in expediting a review. (The Scottish Medicines Consortium, a separate entity which advises the Scottish NHS, actually conducts this review in house as part of a technology assessment, approaching manufacturers directly during the pre-approval phase).
Technology appraisals take a number of factors into account, but the key measurement is a unit known as a Quality Adjusted Life Year (QALY). In essence, QALYs are a universally recognised method of determining a health outcome, such as the effect of a treatment, on a patient’s Quality of Life (QoL) and the length of their life. The addition of a full year of perfect health equals a QALY of 1.0. It enables a (relatively) objective method of comparing the effectiveness of two treatments; a particularly important factor when considering both the pricing of a new treatment and its effectiveness against the agreed ‘gold standard’ of therapy. For most drugs, NICE has a cap of £30,000 (approx A$45,000) per QALY, at which point it will no longer consider a therapy cost effective. (Although the cap was recently increased for terminal cancer drugs to £50,000).
QALYs are not without their drawbacks, however, and in recent years NICE has come under fire from both the industry and patient groups for rejecting treatments which could improve and save lives. This has been particularly acute as many of the highest profile negative opinions from NICE have been for new generation cancer treatments; expensive drugs, but ones which have often been hailed as breakthroughs in modern medicine.
Two cases of particular note are Britsol-Myers Squibb’s drug Yervoy (ipilimumab) and Roche’s Zelboraf (vemurafenib); therapies designed to treat late stage malignant melanoma. Yervoy was approved by the European Medicines Agency (EMA) in May 2011 after a late stage trial showed metastatic melanoma patients lived for a median of 10 months with the treatment versus 6.4 months with placebo, with 20 percent of the Yervoy patients living for more than 2 years. Zelboraf is a targeted melanoma therapy, designed to treat patients with a specific genetic mutation known as V600e. Late stage Zelboraf data showed the drug improved “progression-free” survival of patients with V600e mutations by 3.7 months, and overall survival by 3 months, compared to patients treated with dacarbazine, a chemotherapy drug approved for melanoma.
Despite the encouraging stats, both drugs have thus far been rejected by NICE for failing to conform to the QALY guidelines. A course of treatment with Yervoy is reported to cost £80,000 per patient (an average of four doses at £20,000 per dose), while Zelboraf, a weekly treatment, costs £1,750 per dose, excluding consultation fees and diagnostics, or around £52,000 for the average treatment course of seven months. NICE knocked back Yervoy in October 2011, noting that the primary data submitted did not provide comparative treatment statistics despite showing that there was great long-term benefit for 10% of patients treated and improved survival for around 30%. Zelboraf has been rebuffed twice – once in June as it breached the QALY threshold and again in August, with NICE requesting additional information. (At time of writing, however, it looks likely that Roche might try a third submission with NICE.)
Cogent arguments for and against NICE’s actions, as well as some scolding of both companies for their pricing strategies have played out in the press, and will likely do so for some time to come. It’s easy to see why patients and their treating physicians would want access to treatments which may improve and prolong their lives, regardless of cost. It’s equally understandable the bottom lines must be met by both government agencies who fund new medical technologies and the companies who develop and market them.
Some strategies are, however, helping to end the deadlock and achieve that final goal of drug development: delivering new therapies to patients. In the past 12 months Takeda Pharmaceuticals and Novartis have both had NICE rejections reversed, enabling countrywide access to two new oncology drugs – Takeda’s Mepact (mifamurtide), a pediatric bone cancer drug costing about £50,000 per QALY, and Novartis’ Tasigna (nilotinib), a second-line therapy for chronic myeloid leukemia which costs around £30,000 annually. In both instances NICE was initially concerned at the overall cost of treatment (as the drugs are for long term use) as well as weaker clinical evidence, but issued positive cost effectiveness guidance after the companies offered to establish patient access schemes (PAS’s) to reduce overall costs. Here, the companies offer reduced pricing or patient specific reimbursement – or a combination thereof – to facilitate lower overall costs and thus lower prices per QALY.
Beyond cancer drugs, orphan drugs – drugs for rare diseases affecting less than 5 per 10,000 people in EU countries – have been subject to different procedures under NICE, with ‘ultra-orphan’ drugs – those which affect less than 1:50,000, or around 1,200 Britons – subject to review by a specific Advisory Group For National Specialised Services (AGNSS). The AGNSS system allows for specific review of a technology by a smaller group of specialists within a given field, with advice going directly to the Secretary of State for Health. This provides a more targeted review for diseases or conditions which few doctors will ever see, and even fewer will correctly diagnose. It also provides greater discretion for the NHS when dealing with diseases which may only affect a few hundred people in the country, thus providing minimal impact for the country. The AGNSS system is currently undergoing review and will probably be rolled into the NICE system, but it is unlikely before the 2013/14 financial year. Thus, it is the likely system under which SCENESSE® will be evaluated, should it receive an approval under from the European Medicines Agency.
Looking beyond the specifics, a broader review of NICE’s methodology is underway to ensure its guidelines are the most appropriate way to evaluate technologies. A review of the appeals process for drug companies is also in progress. It will be of interestto see what recommendations arise from these reviews and whether any amends, if implemented, will help improve the overall access for patients to new, effective technologies in the long term. Time will tell.
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Adams, Ben, “Roche’s melanoma pill launched in UK”, InPharm, March 14, 2012. <http://www.inpharm.com/news/171766/roche-s-melanoma-pill-launched-uk>
Adams, Ben, “Roche’s Zelboraf rejected by NICE”, InPharm, June 15, 2012. <http://www.inpharm.com/news/173023/roche-s-zelboraf-rejected-nice>
Borland, Sophie, “New cancer drugs held up by the NHS for nine years as rationing body accused of letting down patients”, Daily Mail, May 15, 2012. <http://www.dailymail.co.uk/news/article-2144957/New-cancer-drugs-held-NHS-years-rationing-body-accused-letting-patients.html>
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Gaffney, Alexander, “NICE to Assume Review of High-cost Orphan Drug Products”, Regulatory Focus, July 23, 2012. < http://www.raps.org/focus-online/news/news-article-view/article/1957/nice-to-assume-review-of-high-cost-orphan-drug-products.aspx>
HIS Healthcare and Pharma Blog, “AGNSS — Is There Really a Need For a NICE of Rare Disorders?”, February 6, 2012. <http://healthcare.blogs.ihs.com/2012/02/06/agnss-is-there-really-a-need-for-a-nice-of-rare-disorders/>
Hirschler, Ben, Reuters, “UK cost agency rejects Roche’s new melanoma pill”, June 14, 2012. <http://uk.reuters.com/article/2012/06/14/us-roche-britain-idUKBRE85D1RJ20120614>
HM Treasury, “Budget 2012 Documents”, March 21, 2012. <http://www.hm-treasury.gov.uk/budget2012_documents.htm>
NHS, August 8, 2011. <http://www.nhs.uk/news/2011/08August/Pages/new-skincancer-drug-yervoy-ipilimumab.aspx>
Reuters, “UK cost body seeks more info on Roche cancer pill”, August 9, 2012. <http://in.reuters.com/article/2012/08/09/roche-britain-idINL6E8J985J20120809>
Stanton, Tracy, “U.K. to revamp NICE appeals after industry complaints”, FiercePharma, August 21, 2012. <http://www.fiercepharma.com/story/uk-revamp-nice-appeals-after-industry-complaints/2012-08-21?utm_medium=nl&utm_source=internal>
Image reference: ‘mind the gap’ posted to Flickr.com by robzand, August 23, 2012 <http://www.flickr.com/photos/robzand/7872085160/>