December 7, 2021

I, Science

The science magazine of Imperial College

Failure to consult the public on a new drug-pricing policy may store up trouble for the future.

Somewhere, in the depths of Whitehall, an elephant has taken up residence. This big, pink, imaginary elephant – let’s call her Nellie – is currently standing in a bustling project room, squeezed, I imagine, somewhere between a conference table and a flip-chart. And Nellie is feeling pretty miffed. Because, despite her remarkable presence in this room, and notwithstanding her many attempts at making herself heard, Nellie is being ignored.

The project room belongs to the Department of Health’s (DoH) Medicines, Pharmacy and Industry group, and Nellie has been standing here since late 2010, when the team was asked by the government to lead the thinking on a new approach to the pricing of drugs for the NHS. That approach – value-based pricing – is scheduled for implementation in just over 18 months, and the reason for Nellie’s mysterious manifestation will, I hope, soon become clear. But first, some background.

Each year, the UK health regulatory authorities approve dozens of new prescription drugs for sale in this country, in principle making them available to anyone, free-of-charge on the NHS (I’m simplifying slightly, but you get the idea). However, in the past, some primary healthcare trusts have restricted patient access to certain drugs for budgetary reasons, leading to regional inequalities and the much maligned “postcode lottery” of the 1990s. A problem that some would say persists to this day.

To defuse this issue, and perhaps sensing an opportunity for a catchy acronym, in 1999 Labour set up the optimistically named National Institute for Clinical Excellence, or NICE. This new institution, it was hoped, would help to iron out regional inequality by making recommendations about best clinical practice on a national scale, and by centrally evaluating which medicines should and should not be made available on the NHS, based on both their clinical effectiveness and value-for-money.

A sensible idea, if I do say so myself.

But, despite its chirpy name, NICE is not a popular institution. After all, it is essentially in the business of rationing. And this is a very important job, because no matter how efficient we make the NHS, and no matter how much of the public purse we dedicate to it, there will always be more potential medical interventions than there is money to pay for them. Nevertheless, no one likes the bearer of bad news, and given that tax revenues are shrinking while healthcare costs are escalating, it is hardly surprising that NICE is increasingly having to make difficult, and often unpopular, decisions.

And these types of decisions are by no means straightforward. Should we reduce the waiting time for a hundred house-bound pensioners needing hip replacements, or provide a final round of chemo to a single young cancer patient? Should we channel our last £1m into a new Alzheimer’s medicine for Grandpa, ADHD drugs for little bro or better pain killers for Mum’s arthritis? Should we be prepared to pay more for drugs that treat rare diseases, and are therefore more expensive? What about drugs that provide a few precious extra months to those dying of a terminal disease?

These are the types of questions that, at a macro-level, NICE has to deal with on a day-to-day basis and unfortunately, when it comes to rationing, there are no right answers. Some people think one thing, and other equally reasonable people think the exact opposite. You just can’t please everyone. Which is pretty inconvenient for an institution, such as NICE, that is meant to represent the interests of the entire British public.

To get around this ethical dilemma, NICE applies a workaround known as the principle of procedural justice. This states that when we lack social consensus on the principles that make a decision fair, we should instead focus on the fairness of the decision-making process itself; a just procedure, it is claimed, will generally give a just decision. So, with this in mind, NICE ensures that its procedures are robust, transparent and deliberative, not to mention extremely well-documented and rather tediously drawn-out (check out the records for a recent “reject” decision if you don’t believe me). This may lead to some inconsistency in the decisions reached, but, so the theory goes, this is more ethically justifiable than formulaically applying principles that many would find morally abhorrent.

Got that? Good. Because next year, all of this is going to change.

In 2010/11, the DoH consulted on a new value-based approach to drug pricing under which the government, that is, the buyer, and not the drug-company itself, would assume responsibility for setting the price. Now, this is a pretty huge policy change, not to mention a strange business-practice, so feel free to take a moment to ponder. From 1 January 2014, the government will be responsible for setting the price for all new drugs sold to the NHS, based not on what the DoH is willing to pay, or on what the manufacturer is willing to accept, but on what the drug is actually worth. Think about that. What the drug is WORTH, to us, as a society. In pounds.

So, ignoring for a moment some of the other potential issues with this approach – I’ll deal with those in Part 2 – how do you go about valuing a drug? I mean, really valuing it, rather than simply pricing it, as a manufacturer might? What is someone’s life worth, in monetary terms? What about someone’s mobility? Or a 25% chance of an extra 3 months to live? These judgements make the accept/reject decisions made by NICE, based on a price set by the manufacturer, look positively straightforward by comparison. But value-based pricing requires precise, numerical answers to all of these questions, and it also requires the government to be willing to walk away if a seller holds out for a price higher than a product’s calculated “value” – a reasonably likely scenario given the NHS’s minnow-status in the global pharmaceuticals market, and the high cost of development of many of these drugs.

Which perhaps explains the slightly tense atmosphere in that fictional project room back at the Department of Health. In March 2011, the quiet consultation led by the Medicines, Pharmacy and Industry group elicited 188 mostly lukewarm responses from a range of medical charities, primary care trusts, industry associations, pharmaceutical companies and other institutional stakeholders. They pointed out a number of flaws in the proposed approach, and the DoH has promised to take these into account in its planning. But, the Health Secretary assures us, the change will go ahead, and it will go ahead by January 2014.

Which, finally, brings us back to Nellie, the elephant in the room.

When it comes to the NHS, we are all stakeholders, and, deliberately or not, this policy change is taking place well below the radar. Like Nellie, the public has so far been ignored, despite its weighty presence in the room. We may not all agree on the best way to share our resources, but we must all feel that we have had a chance to have our say in a decision which, for the unlucky ones, will have a profound impact on our lives, and possibly our deaths. In the absence of ethical consensus, procedural justice must be done, and that means that extensive public consultation is a must. For the DoH to retain credibility, access to healthcare must not only be fair, but must also be seen to be fair, and a loss of public trust now may store up serious problems for the future.

After all, everyone knows that an elephant never forgets.

In Part 2, I’ll explore the ethical and economic challenges involved in valuing a drug, and will find out what some key stakeholders think about the move to value-based pricing.

Image: flickr | massdistraction