NICE 'overvalues' expensive new drugs

NICE has been criticised over the way it makes drug rationing decisions after researchers said its approach is 'flawed' and has overvalued expensive new treatments.

NICE defended its methods as 'the best available'
NICE defended its methods as 'the best available'

University of York researchers said NICE overestimates the benefits of new drugs because its cost threshold - the price at which a treatment is deemed good value for the NHS - is set too high.

The threshold value per quality-adjusted life year (QALY) - a measure of the health benefits of a treatment - should be lowered from £30,000 to just £18,317, their analysis found.

It suggests the NHS may be wasting money on treatments that are not as good value as first thought.

Meanwhile, European researchers said using QALY to calculate a drug's value was 'flawed', the BBC reported. They urged NICE to abandon this formula in favour of other approaches.

But NICE told GP its approach was 'the best available' and said it will not change its methods.

'Not evidence-based'
Researchers at the Centre for Health Economics (CHE) at the University of York analysed data on NHS costs and drug prices to produce an estimate of the cost-effectiveness threshold that NICE should use. It had been 'widely recognised' that the current threshold of up to £30,000 per QALY was not evidence-based, they said.

When new drugs are approved, the money used to fund them must come from existing, limited budgets. This means the benefits of a new treatment must outweigh the healthy life likely to be lost from other NHS patients, whose treatment is effectively forgone to pay for the new drug.

Their estimate placed the figure at £18,317 per QALY - almost half the current value. The 'true' value may be even lower, they said, and is likely to fall further as the NHS comes under greater financial pressure. For example, at this threshold the approval of a treatment for diabetic macular oedema would have cost the NHS £80 million a year when first considered by NICE, the researchers found.

The authors said: 'This would have displaced the equivalent of 4,367 QALYs equating to 295 additional deaths and 1,337 life years forgone, most of which were likely to occur among patients suffering from cancer or circulatory, respiratory or gastro-intestinal disease.'

The new method and estimate could be used to inform the new value-based pricing scheme from  2014, which will factor in wider economic and health effects of drug rationing decisions.

Co-author of the CHE report Professor Mark Sculpher said: 'It is crucial that the cost effectiveness threshold is seen as representing health forgone as the additional costs of new technologies are imposed on the fixed budgets of local commissioners. For decisions made by NICE and many policy options considered by the NHS and DH, this is the key to establishing the value for money of new services.'

Fellow author Professor Karl Claxton added: 'This study also starts to make the other NHS patients, who ultimately bear the opportunity cost, less abstract so they can be properly taken into account when decisions about new health technologies are being made.'

A NICE spokeswoman said that although the study was 'interesting', 'NICE will continue to use its current threshold range until and if any change to it is introduced as part of the government's proposals for value-based pricing'.

In a separate study, European Consortium in Healthcare Outcomes (ECHOUTCOME) researchers questioned 1,300 people across the continent about their views on the impact of illness on their lives, according to the BBC.

Project lead Ariel Beresniak, told BBC News: 'Important decisions are being made on the basis of QALY, but it produces the wrong results.

'This isn't a scientific way to classify and prioritise the drugs - mathematically, it's flawed.'

He added: 'Agencies such as NICE should abandon QALY in favour of other approaches.'

In response, a NICE spokeswoman accepted QALY was 'not perfect'. 'But it’s based on solid research and uses a way of measuring how quality of life changes when using different treatments, which is the best we have available,' she said. The spokeswoman described the European study as 'limited'.

ABPI chief executive Stephen Whitehead said: 'This research shows why NICE so often delivers conclusions that are out of step with other bodies and can undermine clinical work in the UK and most importantly deny UK patients in need, access to new and proven treatments. This is clearly a flawed approach that can produce damaging decisions. We are working closely and urgently with NICE to look at these problems to ensure guidance that is issued truly values patient centric innovation.'

Health minister Lord Howe said: 'QALYs are widely supported internationally as the best method for evaluating and comparing the effect of different drugs and treatments on patient health. The method was developed by independent international academics.

'We look forward to seeing the full results of this work and hearing the response of experts in the field, including any peer review of the study.'

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