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Linking cancer drug prices to treatment success could speed up approvals. But what do patients consider success?

by Duncan Sim | Analysis

21 February 2019

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NHS hospital bicycle

The NHS spends more than £2 billion on cancer drugs each year in the UK. And with NHS budgets stretched, it’s critical these drugs offer value for money.

The National Institute for Health and Care Excellence (NICE) and the Scottish Medicines Consortium (SMC), which decide whether a new drug is cost-effective for the NHS, have well-established ways to ensure this. But new challenges and new opportunities are always emerging, prompting the NHS to consider how to spend its money most effectively.

Clinical trials remain vital to ensure a drug is safe and effective. But with decisions on whether to make new drugs available being made sooner after their development, those trials give a less complete picture of a drug’s benefits. And at the same time, the NHS is collecting more data than ever before on how well patients respond to new drugs outside of clinical trials, after they’ve been introduced into the NHS.

We asked people affected by cancer what they value most in their treatment as part of a new report. And it’s clear the NHS has a chance to use the data it collects to make sure it’s paying for the things that matter most to patients.

That’s why we’ve teamed up with the Greater Manchester Health and Social Care Partnership to investigate a different approach to drug pricing, known as outcome-based payment (OBP). It links the price the NHS pays for a medicine to how much benefit it gives NHS patients after the medicine is approved.

And thanks to input from people affected by cancer, we’re suggesting 4 key measures of a drug’s value, spanning not just its impact on survival, but also how it affects people’s quality of life.

Challenges in agreeing drug prices

For most drugs, the price the NHS pays is generally agreed in advance via negotiation with the drug’s manufacturer. And this is usually based on the results of clinical trials showing the effectiveness of the medicine. This pre-agreed price doesn’t usually change, unless there’s a review of the medicine’s effectiveness.

These negotiations are already tough. But they’re becoming even tougher as cancer treatments become ever more complex and personalised. This can mean there isn’t enough data to precisely pin down a drug’s benefits, especially in the long term, so it’s hard to translate this into a ‘fair’ price before more data is collected.

The result is uncertainty and more risk for both the NHS and drugs manufacturers. And uncertainty means delays in patients receiving new treatments.

By contrast, OBP would be more flexible. Here, the money the NHS pays the manufacturer for its drug is dependent on how well NHS patients respond to treatment. For example, the NHS could pay the manufacturer less for a drug that doesn’t work as well as expected based on clinical trial results, but more if it does.

Adjusting a drug’s price once the NHS knows how much it has helped patients could offer a way around these challenges, meaning patients might receive new treatments sooner.

When could OBP be used?

The idea of matching a drug’s price to NHS patient benefit seems like common sense. The NHS has tried this in the past for cancer drugs as well as in other diseases. But these attempts have faced technical difficulties, meaning the idea hasn’t taken off.

We think now is the right time to explore OBP further – not least because the NHS is improving the quantity and quality of data it collects on how patients are responding to treatment.

This approach won’t be right for all new cancer drugs and OBP schemes are complex to agree and run. But it could offer an important option in negotiations between the NHS and a drug’s manufacturer if they cannot quickly agree a price and there is a risk of delays in patient access.

OBP could be particularly useful for medicines that show early promise in clinical trials. Drugs with a small to mid-sized patient population, and where improvements in patient outcomes can be captured fairly quickly, would also lend themselves more easily to OBP.

But before OBP can be put into practice for any new treatment, the challenge is deciding how to measure a drug’s value to patients within the NHS.

4 key measures of a drug’s value

Previous attempts at OBP have only linked the drug’s price to one measure of its value. For example, a hepatitis C drug has had its price adjusted based on whether it reduces the amount of hepatitis C virus DNA in a patient sample. But patients receiving a treatment might also place value on multiple other factors.

In our new study, we commissioned the Office of Health Economics, RAND Europe, and King’s College London to ask people affected by cancer what treatment outcomes matter most to them, including how treatment affects their quality of life.

Based on focus groups and a survey, 4 treatment outcomes emerged as the most important to cancer patients and their families.

  1. Survival
  2. Disease progression, relapse or recurrence
  3. Return to normal activities
  4. Long-term side effects

As part of any future use of OBP for cancer medicines, we want the NHS to collect data covering each of these 4 outcomes. This data should then be used to help to set the price the NHS pays for the drug.

What happens next?

Recent improvements in the data that’s collected in NHS cancer services, especially in England, make pricing drugs in this way a more realistic ambition now than in the past. But the data isn’t perfect. There may still be gaps in what’s collected, the quality may vary, and how easy it will be to join up data on different outcomes remains unknown.

We’re doing further research to identify where and how data on patients’ 4 key outcomes is already collected, and to investigate with NHS staff how practical it is to collect more data on a day-to-day basis. Our longer-term ambition is to run a pilot OBP scheme within Greater Manchester to test if it’s a viable way of paying for drugs for the NHS.

There’s more work for us to do. But we’ve found that those with the power to make the shift – spanning drug manufacturers, the NHS, government and others – agree that new options for pricing some drugs are needed.

Many of them say it will be challenging to switch how the NHS pays for treatments. But they are clear that the potential for faster approvals, and a greater focus on how well patients respond to treatment, is worth the effort.

Duncan Sim is a policy advisor at Cancer Research UK