NICE chairman accuses manufacturers of overpricing

The drug industry is overpricing new medicines to boost profits, the chairman of NICE has warned.

Speaking to The Observer last week, Professor Sir Michael Rawlins accused drug companies of using ‘perverse incentives' like linking the pay of pharmaceutical company executives to their firm's share price to hike up the price of new drugs.

His comments come after NICE was accused by cancer charities of sentencing kidney cancer patients to an early death by refusing to approve the use of the drugs Sutent, Avastin, Nexavar and Torisel on the NHS because the drugs were not deemed to be cost effective.

Professor Rawlins said: ‘We are told we are being mean all the time, but what nobody mentions is why the drugs are so expensive.'

Kidney cancer drugs could be produced for about a tenth of their current cost, he said.

‘Part of the problem is that the pharmaceutical industry is looking at a very bad period in the future because of a lot of their big earners are going off patent, and many companies are looking at a 30 or 40 per cent reduction in the next five years unless they come up with new drugs.

‘And so part of the cost is cushioning against that. The other thing, of course, is that the price is very important to a pharmaceutical company.'

Professor Rawlins added that some drug companies were now looking at possible drug deals, including making new drugs that will have limited applications available cheaply in return for being allowed to raise the price if wider uses for them emerge later.

sanjay.tanday@haymarket.com

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