Balancing budget and patients’ needs
Rare Diseases John Stewart, Director of Strategy and Policy for Specialised Commissioning, NHS England, discusses tough decisions facing the NHS.
Developments in technology have brought great hope to those suffering from rare diseases. However, those interventions come at a cost to an already over-stretched NHS.
From April this year, NHS spending on specialised services will have risen to nearly £16bn, funding 150 different services. These services span new drugs and treatments for rare and very diseases through to the provision of all chemotherapy drugs as well as treatment such as renal dialysis. With such a broad remit, it’s easy to see how £16 billion can easily be swallowed up.
“NICE [National Institute for Health and Care Excellence] appraise all significant new drugs for their cost effectiveness and NHS England is under a legal requirement to make funding available for any that they approve; we have to make this funding almost immediately available, regardless of what the budget impact might be” explains Mr. Stewart.
"NHS England is under a legal requirement to make funding available for any drugs that are approved."
It might seem crass to reduce the decision to pure mathematics, but in its very basic form NICE have to measure the value of drugs in terms of their clinical and cost-effectiveness. For standard appraisals, NICE will approve drugs that cost £30,000 or less for every additional year of good health the treatment provides (a Quality Adjusted Life Year or QALY for short) and for end of life care treatments this figures rises to £50,000. However, for treatments for very rare conditions, which form part of NICE’s Highly Specialised Technology appraisal programme, there is currently no such guiding threshold.
Patients like Matilda Hatton benefit from the constant development of new drugs, funded by the NHS
As they walk the ongoing tightrope between managing budgets and meeting patient needs, NHS England and NICE have been consulting on proposals to both accelerate access to new drugs as well as manage the affordability challenges they can pose. This includes proposals to fast track patient access to the most cost effective drugs - those drugs that cost less than £10,000 per QALY- and to introduce for the first time a new threshold at which highly specialised treatments will be automatically funded, set at £100,000 per QALY- over three times the standard threshold and double that used for end of life care drugs.
"There is a need to accelerate access to new drugs, but manage the affordability challenges this can pose."
However, the days of simply looking at cost effectiveness appear to be over. “There are a growing number of drugs that despite being judged cost effective by NICE have a huge budget impact because of their high price and the size of the eligible patient population” explains Mr Stewart. “This is something we have recently experienced with new drugs for treating Hepatitis C, but many cancer drugs fall into this category too. And, it is why we have also consulted on new proposals whereby if a new drug for a specific condition will cost over £20 million in the first three years of its introduction then a commercial negotiation with industry will be triggered in order to manage its introduction into the NHS.”
The relationship between the NHS and industry will prove to be crucial going forward. Whilst the specialised commissioning budget has seen a growth of around 7% in 2016/17 this will go down to 4.8% in 2017/18. At the moment, roughly 25% of the budget is spent on drugs.
"However, as more drugs meet the NICE guidelines, the growth in the drugs bill will outstrip the growth in the NHS budget."
“Looking forward we need to offer more flexible drug reimbursement mechanisms and in return we need to see more responsible pricing from industry” says Mr. Stewart. “We need more robust commercial agreements, so we can make the latest drugs available, without detracting from the other services we provide.” Mr Stewart remains optimistic about the future, but that is very much dependent on a more flexible approach to pricing and reimbursement between the NHS and industry.