Not so NICE: Warning of drug industry influence on NHS

No-one likes to talk about rationing health services, especially politicians. Yet rationing decisions are necessary in all health systems without limitless budgets, since demand will always exceed supply. The question is: who makes the decision, and on what basis?

No-one likes to talk about rationing health services, especially politicians. Yet rationing decisions are necessary in all health systems without limitless budgets, since demand will always exceed supply. The question is: who makes the decision, and on what basis?

Andrew Lansley’s reputation as the postcode lottery politician is confirmed with an attack by briefing on the National Institute for Health and Clinical Excellence (NICE) and its power to turn down new medicines for use in the NHS.

Junior minister Earl Howe described NICE’s role as “somewhat redundant” at pharmacy suppliers conference, followed by reports on NICE in both The Guardian and Daily Mail.

NICE was set up by Labour in 1999 in response to the post code lottery of geographical variation in drug prescribing and treatments, as an independent body to decide which drugs and treatments are made available in the English and Welsh NHS. It does this with expert advice from doctors and other health professionals, patients and patient organisations, and drug companies.

Once NICE issues its guidance, the NHS locally is required to find the money to make the drugs or treatments available from existing budgets. In other words, it assesses clinical and cost effectiveness (how well does the drug or treatment work for the money spent), promotes equity and ensures transparency in decision-making. So, why the proposed change?

Two factors are behind it. The coalition has already signalled with their Cancer Drugs Fund that decision making on expensive treatments with marginal benefit will be decentralised, with inconsistency already apparent, as reported by Left Foot Forward. Even before the Fund however, NICE has recommended 75 per cent of cancer treatments it has reviewed.

The move also responds to the intense lobbying of major pharmaceutical companies, led by their trade body, the ABPI. They favour “value-based pricing” for new drugs: basically a deal between civil servants and the industry about what is a fair price, rather than NICE’s independent clinically-led assessment of cost/benefit. The flagship example of this approach in 2007, for new MS drugs, was branded a “costly failure” by doctors.

A likely consequence of NICE losing its key role is cost inflation in the NHS, raising concern that the NHS may replicate the US health system, where drug costs have been rising significantly since the 1980s and are a major cause of escalating healthcare costs, prompting President Obama’s reforms.

OECD data shows the USA spends 16% of GDP on healthcare; the UK comes in just below the OECD average at 8.4%9. Per capita spending in the US on pharmaceuticals ($843) is higher than any other OECD country9. Pharmacy commentators IMS Health have estimated that about half the total worldwide sales for prescription drugs is in the United States, with under 5% of the population.

Health-expenditure-as-a-share-of-GDP-small

Yet the USA now ranks in the bottom quartile in life expectancy among OECD countries and has seen the smallest improvement in this metric over the past 20 years.

Author Marcia Angell, in her book on the rise of the US pharmaceutical industry, highlights past pharma profits in the Fortune 500 as equivalent to all other sectors combined, commenting:

“When I say this is a profitable industry, I mean really profitable. It is difficult to conceive of how awash in money big pharma is.”

Meanwhile, UK commentators have already outlined the detailed example of “lobbying from pharma-funded charities disgruntled at evidence-based assessments declining the products of said funders”, under the cover of the Rarer Cancers Foundation (RCF) charity, that the Department of Health has used to justify Cancer Fund spending.

Left Foot Forward has previously highlighted Andrew Lansley’s poor political judgement, combined with a visionary zeal. Polly Toynbee refers in yesterday’s Guardian to the:

“… realm of unreality that is at last starting to alarm the Treasury [and] some in the Cabinet… More worrying than the ideology or the direction of travel are questions about his competence.”

Independent commentators are already predicting the date at which NHS budget pressures will get too much and widespread service restrictions are likely – November 2011, says Nick Bosanquet of Imperial College, while Alan Maynard, a leading health economist, observes:

“Real growth in the NHS will be about 0.5% per cent in the next few years… We’re going to have rationing. The question is whether we have it at a national level or let 150 primary care trusts or whatever do it their own way.”

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