An image of chemotherapy drugs

The new generation of cancer drugs can be expensive

Treatment for cancer can be expensive, and this is especially true of the new generation of ‘targeted’ cancer drugs.

For example, in August this year EU regulators licensed ipilimumab (Yervoy), for use against melanoma, at an estimated cost of £80,000 for four injections. In its preliminary guidance, NICE – the National Institute of Health and Clinical Excellence – said that they felt this wasn’t likely to be a good use of NHS resources.

Crizotinib, approved in the US (but not yet in the EU) for lung cancer treatment, is expected to cost a similar amount.

Other such drugs are in the pipeline. Given that the NHS has a finite budget and has to make some tough decisions, are these expensive drugs ‘worth it’? And is the system that makes these decisions working as well as it could?

To try to resolve some of these issues, the UK’s Coalition government has proposed a new system – known as ‘Value-Based Pricing’ – to try to improve the way drugs are priced and approved. But how will it work? And what do patients themselves say they ‘value’ in a cancer treatment?

The price of life?

The debate around how to make expensive drugs available on the NHS has been one of the most controversial and heated in the whole of cancer care.

NICE – the body responsible for deciding which drugs should be funded – is a hero to many, keeping down costs and ensuring the NHS budget is spent responsibly. But to others the regulator is a villain, making decisions that cost lives. (NICE have robustly defended themselves on this blog in the past)

But who decides what a drug costs in the first place?

At the moment, prices are drawn up under an agreement between the Government and the pharmaceutical industry, called the Pharmaceutical Price Regulation Scheme or PPRS, which we discussed back in 2009.

Under the PPRS, a pharmaceutical company sets what it thinks is a fair price for its drug, and NICE then decides whether the drug is good at what it does (‘clinically effective’) and whether the price represents value for money (‘cost-effective’). These factors then determine whether the drug should be made available on the NHS.

However, this system hasn’t always worked as well as it should, and politicians have been trying to improve things for many years.

Recently, as a short term measure, the Coalition government introduced a ‘Cancer Drugs Fund’ in England, of £200m a year, to pay for drugs that NICE has rejected, or while it decides on their availability.

While it appears to be working, it doesn’t eradicate the regional variation in access to some treatments and the system has its critics. The Cancer Drugs Fund is only a temporary measure before the introduction of the new system – ‘Value-Based Pricing’, or VBP – when the current PPRS agreement expires in 2013.

Under this new system, rather than being set by discussions between the Government and pharma companies, the price of a drug will apparently be calculated according to its overall ‘value’ – a figure which it is thought will reflect its value to everyone involved – to the pharma companies, to the research community, to the NHS, and to patients.

The Government is currently working out the details of how this system should operate, and recently published its response to an initial consultation on the matter which we fed into.

Key to this new system is the concept of a treatment’s ‘value’, but what does this mean in practice? At the moment the details are vague, and there are many questions that need answering.

The devil’s in the detail

In practice, VBP sounds like a good system, which could effectively balance the needs of patients, the health service and drug developers (see diagram).

Diagram - what is the problem Value-Based Pricing is trying to solve?

(click to enlarge)

But we need to know more about how it will work.

For example, the negotiations over the current framework, the PPRS, take place behind closed doors (out of legal necessity, because the details are commercially sensitive). Will VBP be a more open, accountable system? We would hope so – especially given the Government’s commitment to transparency, and we look forward to details about how much of its workings will be available for public scrutiny.

Secondly, although the system will hopefully balance many different factors, we would like to see details about the weightings these issues will be given, relative to each other.

For example, how will factors like length of life-extension be balanced against possible side-effects? End-of-life treatments can be very expensive, and may give what might seem like a relatively small extension to life. But these additional weeks or months of life can be very significant to patients themselves.

How will the ‘value’ of new drugs that are similar to existing drugs be balanced against breakthrough ‘first-in-class’ treatments? How will the system protect patients while stimulating investment in new research (and thus the economy)? And how will extending life be ‘valued’ against cure?

Thirdly, what’s the timetable? The system needs to be in place before the current PPRS expires, but we hope that the Government will ‘show its workings’ well before this, and allow time for further consultation and feedback.

And crucially we want to know how other stakeholders – above all, patients – will be involved in setting the price of new treatments.

Finally, as drug pricing is a ‘reserved’ issue (i.e. one that the government in Westminster decides for the whole of the UK), Value-Based Pricing will apply across England, Northern Ireland, Scotland and Wales.

But decisions on how to spend health budgets are devolved to each nation’s government, which raises some tricky questions about how the system will operate in practice across the UK.

What do patients think?

The Department of Health has said that they will involve patients in the way the system works. We believe that this is absolutely vital if the system is to truly reflect what represents ‘value’ to patients themselves.

To get a grasp of what this means, we sent out a survey to patients and people affected by cancer via Cancer Network User Involvement Groups in England, their equivalents in Scotland, Wales and Northern Ireland, and via our CancerHelp UK website and Cancer Chat forum.

The aim was to find out how people with cancer want to be involved in discussions about their treatment, and what ideas they have about what is important to them about their treatment and how they ascribe value to different aspects of it.

What did it say?

147 people completed the survey. The results showed that they believe that a drug’s effectiveness is the most important thing they want the government to consider when setting a drug’s price.

They clearly don’t share the Government’s preoccupation with cost-effectiveness: 67 per cent of the respondents said that cost isn’t an important factor when evaluating a treatment.

Patients generally agreed that the most important effect a drug could have was to save lives. However it was also striking how much emphasis patients placed on quality of life improvements afforded by a treatment, and how highly they valued minimising the disruption to their normal lives.

What next?

The Government will need to actively involve cancer patients in the development of the Value-Based Pricing system if it wants to fully reflect their needs and wants with regard to treatment.

Cancer patients clearly have strong views on their treatment and how treatments should be assessed and prioritised, and these need to be hard-wired in the design of the new system.

We keenly await more detail about how this will be brought about in practice, and we’re hoping to play a leading role in making sure VBP effectively balances the needs of researchers, industry, doctors, politicians, and – above all – patients themselves.

Dan and Henry

Dan Hughes-Morgan is Policy Adviser at Cancer Research UK