PIN Response to 'The Pricing of Branded Medicines'

PIN (Patients Involved in NICE) response to the Government consultation on 'a new value-based approached to the pricing of branded medicines'

Patients Involved in NICE is an informal group of patient organisations involved in NICE decision-making. Our mission is to:

• Ensure NICE's decision-making is centred around patients, their family and carers
• Improve patient organisations' capacity to productively work with NICE
• Facilitate implementation of guidance, guidelines and Quality Standards

At present many of our members are involved in technology appraisals and contribute their expertise to ensure that patient experiences of a condition and the treatment developed for it is taken into account when NICE decides on the approval of a technology for use on the NHS. Our focus is on patient-centred decision-making by NICE, particularly in relation to the approval of new health technologies. The proposals on the introduction of a value-based pricing system are likely to have a major impact on the way patient organisations engage with NICE in relation to patient access to new treatments. PIN members are likely to continue their input into the NICE technology appraisals but will also be keen to have a say in decisions about the weights attributed to new treatments to determine what pricing threshold they should meet.

The comments in this submission are supported by the following organisations:

• Asthma UK
• Breast Cancer Care
• Breakthrough Breast Cancer
• Diabetes UK
• Epilepsy Action
• Epilepsy Society
• INPUT
• Kidney Cancer UK
• Leukaemia Cara
• The Macular Disease Society
• MDS UK Patient Support Group
• Motor Neurone Disease Association
• National Association of Deafened People
• NASS (National Ankylosing Spondylitis Society)
• The National Osteoporosis Society
• National Rheumatoid Arthritis Society
• The Patient Association
• RNIB (Royal National Institute of Blind People)
• Sarcoma UK

Our response has been developed following a period of consultation with our members and broadly represents the views of PIN. However, this response may not reflect all aspects of our member’s viewpoints. Individual PIN members may also submit their own response. Please refer to these individual responses for further detail.

General comments

Implementation of NICE guidance

1.One of our main concerns about the move to value-based pricing is the intention to remove the current mandatory status from NICE technology guidance. While some decisions taken by NICE have been controversial there is general agreement among PIN members that the mandatory nature of NICE guidance has helped address variations in access to treatment that affected many patients before NICE was set up. We are concerned that with these arrangements in place, the new system may lead to a greater postcode lottery for patients who are trying to access drugs.

2.We believe that the agreed pricing under the value-based pricing system needs to be linked to enforceable access guarantees. Without such guarantees it is difficult to conceive how equitable access to innovative treatments across the UK could be achieved. We would like to seek clarification of the way the Government intends to "continue to ensure that the NHS in England funds drugs that have been positively appraised by NICE" until it is clear that the new pricing system delivers improvements in access to medicines. Does this mean in practice that the mandatory nature of NICE guidance will be retained beyond 2014 if necessary, and if not, what other safeguards will be put in place?

Involvement of patients and their organisations in decisions on the value of treatments

3.We are concerned about the lack of reference to the involvement of patients and their organisations in determining the maximum price for a drug for which manufacturers are seeking a higher threshold based on weighting. While the consultation document talks about expert panels it does not mention anywhere the importance of involving patients in this process. Nor does it recognise the capacity issues that patient organisations face who want to ensure that pricing and access decisions truly reflect the interests of patients. Furthermore, it is not clear how the timescales would work and in what sequence different steps of the process will be taken. It needs to be made clear at what specific points in the process patients will be consulted and while it is important that the process does not take too long patients and their organisations expect a realistic chance to influence it rather than being confronted with a done deal.

4.The language used in the consultation should encourage involvement of patients and their organisations and this needs to be at two levels – first in the development of the process (including its review and adjustment), and second in the actual operation of the process on a case-by-case basis.

Taking account of the wider societal benefits of a treatment

5.PIN welcomes in principle the move towards a pricing system that aims to take account of the benefits of new treatments that go beyond immediate health benefits. However, we are concerned about the lack of detail both in relation to the kind of additional benefits that may be taken into account and the methodology that will be used to ascertain these. For instance the consultation document only mentions carer costs. Other areas of considerable cost caused by long-term conditions and disability are reduced productivity, lower employment and associated benefits costs for both patients and carers and disability allowances. There are also familial issues such as children underperforming in education because of their own or parental illness. Including these costs would reflect the true burden of a particular disease to society, yet could also be seen to amount to age discrimination since it would put a higher value on treatments for diseases that primarily affect people of working age. Clarification and a thorough debate on these points are needed to avoid a situation where it is assumed that the current methodology (based on QALYs) can simply be transferred to value-based pricing.

Individual consultation questions

6.Please find below our response to consultation questions that we feel are relevant to PIN members.

Are the objectives for the pricing of medicines set out in Section 3 of this document - better patient outcomes, greater innovation, a broader and more transparent assessment and better value for money for the NHS - the right ones?

7.We broadly agree with the objectives. However, the document does not make it clear how the system will ensure better patient outcomes. Under the proposed NHS outcomes framework care outcomes will be measured in a number of domains that together provide a picture of the overall effectiveness of care in achieving better patient outcomes. Clearly a link with patient outcomes can only be achieved if there is guaranteed access to the drugs for which an appropriate price level has been agreed. To work for patients value-based pricing needs to be linked to improved access and ultimately improved patient outcomes.

Should value-based pricing apply to any medicines that are already on the UK market before 1 January 2014? If yes, should this be determined on an individual basis, or are there particular groups of drugs which might be considered?

8.We do not support the use of value-based pricing to products that have already been approved by NICE and are currently available on the NHS as a result. This would be an unnecessary duplication of work. Value-based pricing should be applied when NICE technology guidance is reviewed so that the same system is being used for an increasing number of drugs. However, while a review is taking place to move a technology from original NICE guidance to the value-based pricing system existing recommendations should continue to be implemented. In addition, patient groups (and other stakeholders) should also have the option to argue for a new assessment under value-based pricing rules if they believe that treatments that have been rejected by NICE under the current system would be more likely to be approved if wider benefits to patients were taken into account. This option should also apply where stakeholders believe that existing NICE guidance has been too restrictive because it has not taken account of wider benefits to society. The existing topic proposal facility for NICE technology appraisals could be used for this purpose.

Are there types or groups of medicines, for example, those that treat very rare conditions, with would be better dealt with through separate arrangements outside value-based pricing?

9.Treatments for orphan diseases should either be dealt with through separate arrangements or different criteria would need to apply to take account of the frequent lack of evidence that stems from the small number of patients with certain diseases. Also, data about wider benefits of treatment, such as burden on carers, are often provided by patient organisations. In the area of orphan diseases these are usually small organisations that do not necessarily have the resources to commission burden of disease studies. This would need to be addressed if the same rules were to apply to orphan diseases.

Do you agree that we should be willing to pay more for medicines in therapeutic areas with the highest unmet needs, and so pay less for medicines which treat diseases that are less severe and / or where other treatments are already available?

10.These principles aim to address the problem of limited resources available to treat patients on the NHS. However, we are concerned that they will create a hierarchy of conditions and may impact negatively on R&D activities in relation to diseases that are perceived to be less severe or where there are existing treatment alternatives. It would not be beneficial for patients if the system was set up in a way that focuses all future research on areas of highest unmet need. Importantly, the system will need to be set up in a way that allows it to take into account the value of drugs, which provide an important, albeit incremental change

How should we approach the issue of a single drug which delivers significantly different benefits in different indications?

11.The principle of value-based pricing as set out in the document would dictate that different benefit in different indications would lead to a variation in price. However, in reality it is difficult to see how this would work as there is no mention of auditing, and policing such a policy would be extremely difficult and burdensome. The opportunity of fraud in such a situation is very real.

What steps could be taken to address the practical issues associated with operating more than one price for a drug, if we took such an approach?

12.Full electronic prescribing, with a standards process that gives manufacturers the right to scrutinise records affecting their treatment, may achieve this. However, it is difficult to see that this would be realistic in the short term. The only alternative would be regular compulsory auditing, which would increase the cost to the system but still leaves the issue of fraud.

Do you agree that – compared to the current situation – we should be wiling to pay an extra premium to incentivise the development of innovative medicines that deliver step changes in benefits to patients but pay less for less innovative drugs?

13.As with any pricing system the pricing of drugs should reflect the value of the product to the consumer. Clearly the value to patients of a drug that treats a disease where previously no treatment options existed, or the value of a drug which extends life significantly beyond current treatment alternatives, or improves quality of life, needs to be recognised, and a mechanism that allows that to happen for each individual drug is to be welcomed. For us as patient organisations the question is how the additional benefit is defined and to what extent the views of patients and their carers are taken into account.

14.In addition there are issues around combination treatments. It is not clear how benefit is allocated where a drug is used alongside other treatments (e.g. radiotherapy) and the two complement each other and are both necessary to achieve patient benefit. If both are subject to value-based pricing but only one is deemed innovative and receives a premium, could that mean that patients only receive the cheaper part of the treatment, particularly if prices agreed under the new system do not automatically translate into patient access?

In what ways can we distinguish between levels of innovation?

15.This could be done by asking different stakeholder groups to assess the level of innovation of a new drug against a scale that defines different levels of innovation. These should be informed by the Kennedy report on innovation in relation to NICE [Prof. Sir Ian Kennedy (2009): Appraising the value of innovation and other benefits; specifically paras 4.10 and 4.11 available at:

How can we best derive the weights that will be attached to each element of the assessment? Are there particular elements we should put greater weight on?

16.From a patient point of view it may be justified to give greater weight to a drug that addresses a greater burden of disease and unmet need than to therapeutic innovation and wider societal benefits. However, all three usually play together. It is difficult to see what criteria would be used to put greater weight on one or more of these elements of the assessment.

What measure should we use to define the weightings? Options might include using the existing Quality Adjusted Life Years (QALY) measure, patient experience and expert opinions or some combination of these.

17.The weightings should be defined by a combination of existing QALYs from NICE appraisals, patient experience and expert opinion. It is well established that QALYs do not always represent a balanced picture of the benefits of a treatment since they are based on time-trade off calculations that tend to use general population views on the severity of different health states. These tend to differ from the views of patients and these in turn are often different to the views of treating clinicians. This is why a combination of all three elements is vital, particularly when NICE has already assessed the cost-effectiveness of a drug, and the challenge is to assess additional benefits that are not captured by the NICE methodology.

What approach should be taken under value-based pricing where insufficient evidence is available to allow a full assessment of the value of a new medicine?

18.The lack of long-term evidence can be a problem where licences for new drugs are granted on the basis of one or two-year results from trials and extrapolations into the future are therefore subject to significant uncertainty. In the US the growing trend to undertake comparative effectiveness research aims to address this issue by conducting research to assess how a drug works in clinical practice outside the trial environment. Comparative effectiveness research would allow for an evidence-based assessment of the value of a new medicine after it has been introduced into clinical practice, and taking into account its relationship with other treatments in the patient pathway. This would support the suggested approach of setting a price based on the evidence available at launch, and adjusting it as better evidence becomes available. However, the cost-implications of such a system (comparative effectiveness research, monitoring of the evidence-base, review of drugs) need to be assessed alongside decisions on who would carry the costs to establish whether this is a viable option.

Does the system set out above describe the best combination of rapid access to prices and affordability?

19.It is difficult to answer this question since there are insufficient details as to what will be involved in determining what weights can be applied to individual drugs. If the concept is to leave the manufacturer to make the case and Government and the manufacturer to negotiate on the price, then the process may be sufficiently quick. However, that would be unsatisfactory from the point of view of patients and their organisations (and also other stakeholders) who would want to be involved in decisions about the value of a new drug over and above involvement in the NICE appraisal process.

In what circumstances should value-based pricing assessment be subject to review?

20.As mentioned above reviews may be necessary to ensure that manufacturers are remunerated appropriately for drugs whose benefits were underestimated at the point of licensing. Equally, there may be drugs whose benefits to patients and society were overestimated. NICE currently tends to review its decisions after three to five years. Rather than establishing a process based on time elapsed since the appraisal it may be more appropriate to base review decisions on new evidence presented by stakeholders.

What arrangements could be put in place within the new medicines pricing system to facilitate access for patients who may benefit from drugs previously funded through the Cancer Drugs Fund, at a cost that represents value to the NHS?

21.Since the new system includes weighting based on severity of disease and unmet need it should allow for equitable and transparent pricing for all health technologies whatever the condition. Drugs that currently benefit from funding through the Cancer Drugs Fund should therefore be reviewed under the new system and funding from the Cancer Drugs Fund would need to continue until a drug has been assessed.