NHS is paying too much for drugs to the detriment of other services, analysis suggests

Health economists argue that the NHS gets better value from services than from drugs.

The RPS has produced a professional reference guide to assist pharmacy teams and managers who provide repeat medication management, prescription collection and delivery services. In the image, pharmacist picks up prescription medicines

The NHS is paying too much for new drugs and this is not in the best interests of patients overall, an analysis[1]
by health economists at the University of York has found.

The National Institute for Health and Care Excellence (NICE) uses a threshold of £20,000–30,000 per quality adjusted life year (QALY) to gauge the benefits of new drugs, but the research team, funded by the National Institute of Health Research (NIHR) and Medical Research Council, found that this upper threshold is out of sync with the £13,000 per QALY that the NHS spends on other services. Drugs made available through the Cancer Drugs Fund cost even more than £30,000 per QALY.

At a press briefing to present their findings, the researchers argue that if the NHS spent an additional £10m each year on a new drug that costs £30,000 per QALY, patients would gain 333 QALYs, but that if that money was spent on other services it would generate 773 QALYs for other NHS patients.

“The increasing pressure to approve new drugs more quickly at prices that are too high will only increase the harm done to NHS patients overall,” says Karl Claxton, one of the study’s authors and professor of health economics at the University of York. “The political pressure to support a multinational pharmaceutical sector cannot justify the real harm that has and will continue to be done to NHS patients.”

Sir Andrew Dillon, chief executive of NICE, says there needs to be a balance between investing in the cutting edge of medicine and more routine care. “Unless you think that drug companies will be prepared to lower their prices in an unprecedented way, using a threshold of £13,000 per QALY would mean the NHS closing the door on most new treatments,” he says. “At the other end of the spectrum, we obviously can’t just say yes to anything and everything. We don’t have enough money — and anyway, not everything is worth having. And drug companies need the discipline of a critical market to make sure that price matters.”

Paul Catchpole, the director of value and access at the Association of the British Pharmaceutical Industry, says the researchers’ findings should not be used as a basis for policy or decision making. “This report is likely to be of some academic interest,” he says. “But it misses a fundamental point about how NHS investment decisions are made. Very few healthcare decisions are made using the QALY alone and in reality a wide range of other factors are used for decision making.”

At the £20,000–30,000 per QALY threshold, NICE currently recommends eight out of ten drugs or other technologies that it appraises, including six out of ten cancer treatments. 


[1] Claxton K, Martin S, Soares M  et al . Methods for the estimation of the National Institute for Health and Care Excellence cost-effectiveness threshold.  Health Technology Assessment  February 2015;19(14). doi:10.3310/hta19140.

Last updated
The Pharmaceutical Journal, PJ, 28 February 2015, Vol 294, No 7851;294(7851):DOI:10.1211/PJ.2015.20067925

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