Drug evaluation and reimbursement in the UK

Andrew Dillon Commonwealth Fund - Alliance for Health Reform Briefing on international pharmaceutical policy Washington DC, 7 November 2011

Overview

• In theory, any licenced drug can be prescribed through the National Health Service. In practice, drug use is influenced by: – – – NICE guidance Local formularies Fiscal pressure • Budgets for drugs used in the NHS are held by local hospitals for secondary care and by primary care trusts for out-of hospital prescribing (by General Practitioners)

English NHS total drug spend 2008 ($bn)

Primary care 12.97 60% Hospital care 5.59

30%

Pharmaceutical Price Regulation Scheme

• Introduced in 1957, the PPRS is a voluntary agreement between the Department of Health and the UK branded drugs industry

2009 PPRS agreement

• Its objectives are to: Date Price adjustment – Deliver value for money – Encourage innovation – Promote access and uptake – Provide stability and predictability Feb 2009 Jan 2010 Jan 2011 Jan 2012 -3.9% -1.9% +0.1% +0.2% Jan 2013 +0.2% • Member companies sign up to portfolio price control, within which they can price individual products as they wish

PPRS and NICE

• NICE appraises most but not all new drugs and new indications • Companies can increase or decrease the price of a drug, after a NICE appraisal of the first indication, if they have a new indication with more patient benefit or if they have evidence of increased benefits for the indication. • Companies can offer ‘patient access schemes’, which effectively reduce the price the NHS pays. These schemes are either: – Financially-based schemes, or – Outcomes-based schemes

NICE: appraisal paradigm

Stakeholder perspectives Outcomes for patients Impact on health system resources Scientific and social value judgements

NICE: cost effectiveness analysis

1 x Probability of rejection 0 Rituximab for follicular lymphoma x x 16 32 Cost per QALY ($’000) 48 Imatinib for chronic myeloid leukaemia (blast phase) Trastuzumab for early stage HER-2 positive breast cancer 64 80

Most new health technologies bring additional value

Decision

Yes Optimised Only in research 276 83 24

Recommendations

(63%) 82% of NICE advice is positive (19%) (5%) No 55 (13%) Breakdown of all decisions contained in published NICE Technology Appraisals 1 –236 (January 2000 to October 2011) Note: 6 withdrawn recommendations and 10 non-submissions are not included

Value based pricing

• Recent UK Government proposals designed to extend the definition of value in UIK drug appraisal and reimbursement decisions • Increased focus on: – Wider societal benefits – Products which address areas of unmet need or high burden of illness – New products with particularly innovative features • Seen as an evolution of and not a replacement for the PPRS and NICE arrangements