For medicines, the review is linked to the commitments in the 2019 Voluntary Scheme for Branded Medicines Pricing and Access. Dr Paul Catchpole the ABPI's Director, Value and Access Policy explains the case for change:

Dr Catchpole and Victoria Barrett, ABPI's Value and Access Policy Manager, have written for PharmacoEconomics about the why the Methods Review is so important. This can be accessed here.

The future of medicines valuation

The ABPI and thinktank Reform held an event on the future of medicines valuation, which examined the opportunities and challenges that lie ahead in medicines valuation, as well as how to ensure that the most effective drugs reach patients. You can listen again to the recording here, and read ABPI Chief Executive's opening speech to the event here. 

The case for change

The National Institute for Health and Care Excellence ensures we have a robust health technology assessment (HTA) approach in place for making decisions about which new medicines represent value-for-money and should be paid for on the NHS in England, Wales and Northern Ireland.

NICE uses a standard measure called the quality adjusted life year (QALY) to work out how much health benefit a medicine provides regardless of what disease the medicine is used to treat.

The QALY contains two components: how much extra length of life taking a medicine gives a patient, combined with an estimate of the quality of that extra life.

However, it is well recognised that there are limitations to the QALY and how comprehensively it measures all the value of a medicine which is considered important by patients, their families and carers, the NHS and society.

In the evaluation of new medicines, NICE compares how much it costs to buy each extra QALY against an explicit threshold which represents the limit of how much the NHS is willing to pay.

This approach can be quite inflexible and makes it difficult for some types of medicines, especially those used in hospitals for treating specialist and rare diseases, to get approved for use on the NHS.

When setting the price of an individual medicine, companies will consider a number of factors including how well the medicine treats patients, how many patients might benefit from it, the value that health systems might place on a medicine in the disease area in question and the price of competing products.

The new medicines that the pharmaceutical industry is researching in clinical trials have dramatically changed over the last ten years from being predominantly treatments for long term chronic conditions and late stage cancers to being more targeted therapies for complex, sub-diseases with increasingly smaller patient populations.

Advances in research and development mean we are now seeing more therapies for treating patients earlier on in their disease and which in some cases can potentially cure the patient. These medicines often address a very high unmet medical need because there are either no, or very few, other treatment options available for the patient.

Many of these types of new medicines are having difficulty navigating NICE’s current methods of evaluation and so the Methods Review that NICE is undertaking is a real opportunity to change this.

The new Voluntary Scheme

The 2019 Voluntary Scheme for Branded Medicines Pricing and Access ensures complete predictability on spend for the entire branded medicines bill for the NHS. The branded medicines bill will not grow more than 2% in any of the next five years. Anything above that is paid back by the industry.	This guaranteed level of maximum NHS spend provides the necessary financial headroom to allow NICE to introduce meaningful changes to its methods. With growth in branded medicines spending currently tracking at just 1.1% there should be an acknowledged opportunity to fully utilize the scheme.

There is no risk to the overall NHS budget as the growth limit is covered entirely by the pharmaceutical industry.

NICE evaluates most new medicines through its Single Technology Appraisal (STA) programme. There have not been any significant changes to the STA methods since 2009.

NICE has made changes to the methods for evaluating very specialist, rare disease medicines by introducing the Highly Specialised Technologies (HST) programme.

However, very few medicines meet the strict entry criteria (around 3-4 medicines per year), leaving most medicines to be evaluated in the STA programme where they often struggle to get recommended for use on the NHS.

Now is the time to make the most of the NICE Methods Review to holistically consider how to appropriately appraise the medicines of today and tomorrow, to ensure that NICE remains fit for purpose.

As well as medicines being developed for increasingly small patient populations, regulators (for example the EMA and the MHRA) are also reducing their approval timelines – making use of fast track processes and early access initiatives that result in medicines being assessed by NICE with smaller and even more immature evidence packages.

This needs to be better accounted for in the appraisal methods so the evaluation does not create delays to patient access.

We should aim to value patients’ lives more than ever before. The baseline cost effectiveness threshold currently used by NICE has remained unchanged for over 20 years. If adjusted to account for inflation, it has declined by 31%.

Moreover, as the QALY approach cannot be used to evaluate the full impact of new medicines on patients, their carers, the NHS and society, the threshold needs to be applied much more flexibly.

NICE should introduce a broader framework to assess the value of medicines in its evaluation methods. For example, more account needs to be taken of disease severity, rarity and the full impact a new medicine has on patients and their family/carers.

NICE should follow the latest evidence and Treasury guidance on discounting rates which are used to make long term assessments of value in Government spending.

We believe the rate currently used by NICE, which is not aligned with Treasury guidance, does not adequately account for the longer-term value of medicines.

If we are to continue providing patients with fast access to new medicines, NICE’s Appraisal Committees will need to accept greater uncertainty in the evidence submitted to them, using conditional approvals where additional data collection can resolve the uncertainty, so that patients can access new medicines as close to Marketing Authorisation as possible.

The Government should ensure that money paid back to the NHS by pharmaceutical companies under the Voluntary Scheme is used to improve the ability of patients to access the latest medicines.

What will reform to the NICE methods achieve?

Meaningful reform of NICE’s methods through the Methods Review will support UK patients getting access to new medicines, helping to ensure that:

• thousands of children and adults with rare diseases get access to the latest gene and cell therapies and medicines that can help transform their lives;
• thousands of NHS cancer patients get access to the latest types of cancer medicines that can slow down or halt their cancer progressing;
• the decline in life expectancy and devastating impact on quality of life caused by diseases like dementia and Alzheimer’s is reversed when new medicines become available.

This will help make the NHS one of the most attractive healthcare systems globally, able to use the newest, most effective medicines. It will also help to sustain UK based research and development investment, including for clinical trials.

Improved clinical outcomes achieved by ensuring the latest innovative medicines are available for NHS patients will help deliver the NHS’s overall objectives in the Long-Term Plan, such as further improving cancer survival rates and outcomes in respiratory and cardiovascular disease.