The Guardian view on the NHS and soaring drugs prices

http://www.theguardian.com/commentisfree/2014/aug/11/guardian-view-nhs-soaring-drugs-prices

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At the end of last week, the National Institute for Health and Care Excellence decided to reject the new Roche cancer drug Kadcyla, saying its benefits did not justify its cost. The decision finally brings into the open the difficult question of soaring drug prices. Nice was unusually critical of Roche’s inflexibility over the £90,000 bill for a year’s supply of Kadcyla – three times Nice’s normal limit, and nearly twice even the higher limit allowed for drugs for end-of-life care. Nice’s decision is right. This should be a turning point in relations with the industry. But the case for new drugs, whatever the cost, is often so emotive that it will be a hard argument to win.

This is the story so far. Towards the end of the last government, tales of dying cancer victims being denied drugs that might have given them a few more months to live became so politically explosive that Labour set up a committee chaired by the oncologist Professor Sir Mike Richards. Professor Richard’s co-chair was John Melville, then head of Roche Products in the UK. The report found that Britain was spending less on cancer drugs than other countries. The Conservatives promised to set up a cancer drugs fund to meet the cost, on a patient-by-patient basis, of certain drugs that Nice deemed too costly. It was to be endowed with £200m a year and in, a tightly drawn set of circumstances, it would allow patients access to very expensive drugs. The fund is now managed through NHS England. Roche’s Avastin, which has been rejected by Nice for both bowel and breast cancer, accounts for a quarter of applications.

The fund kept the cost of cancer drugs out of the headlines, but has done nothing to resolve the long-term conflict between the NHS’s finite resources and the rising drugs bill. Perhaps the most successful of the major pharmaceutical companies in developing cancer drugs, Roche’s profits rose by more than 10% in the first quarter of this year, while the value of its sales of oncology drugs is predicted to grow by 50% from 2010 to 2020. While new drugs are expensive to develop and bring to market, Roche appears to be making a large margin above and beyond. There are reports that even in the US, where drug costs have been borne by insurers (and, contrary to myth, the US taxpayer too) a revolt is underway.

Charities such as Breakthrough Breast Cancer reluctantly back Nice’s decision. But it argues that the fund is not fit for purpose, something our reporting confirms. What was supposed to be an interim expedient to help a few acutely ill patients while a better deal with the industry was hammered out has become a way of escaping the constraints carefully established by Nice. It is time the fund was scrapped. Then all the drugs companies, including Roche, would have to sit down and negotiate seriously.