Branded Medicines (NHS)

Debate between Lord Lansley and Bill Wiggin

Thursday 4th December 2014 Commons Chamber

[Mr Andrew Lansley (South Cambridgeshire) (Con)]

I beg to move,

That this House has considered availability and pricing of branded medicines on the NHS.

I am most grateful to the Backbench Business Committee for providing this opportunity to raise an issue of continuing importance to Members and their constituents. The debate will be short, but I am sure that we will be able to put it on the record that there are areas of concern. The two Front-Bench teams will, I am sure, be keen not only to respond now but to take some of these matters forward in the future as the Minister and his colleagues have sought to do over the past couple of years.

Colleagues from the previous debate must not feel that they have trespassed too much on to our debate. Listening to the contributions, it was amply clear that it was important for Members to be able to represent their constituencies. I know that all colleagues are very happy that they had the chance to do that.

Let me set the scene. Over the many years that I have been engaged with health matters, one of the most persistent sources of frustration has occurred when our constituents have not been able to access the medicines that they need through the national health service. That can happen because of a lack of data, and the National Institute for Health and Care Excellence will not appraise such a drug at that point because it determines that it is not cost-effective and is not therefore approved for NHS use, or because local commissioning decisions are incorporated in a local formulary.

Since its inception, NICE has created a more consistent national basis for decisions on access to medicines, but the application of what is essentially an arbitrary cost-effectiveness threshold still means that patients can be denied access to some new drugs. That has been exacerbated by the chronic slowness of uptake of some new medicines across the NHS, because of a clinical conservatism—new drug treatments are viewed as an extra cost rather than an opportunity to improve outcomes—or a general bureaucratic lack of responsiveness to patients.

That is deeply ironic as the UK is among the leading countries for drug discovery. We may represent only 3% of the international pharmaceuticals market, but we have been responsible in this country for 10% of new drug development, including such major innovations as monoclonal antibodies, which were first invented in my own constituency at the Laboratory of Molecular Biology.

As a coalition Government, we commit resources to world-leading research. Ministers have rightly sought both early access to new medicines and continuing support for research and innovation, but we continue to face institutional and cultural resistance. One of my objectives over recent years was to tackle that issue. I wanted to assure patients that, through the NHS, they could access the best and latest medicines and treatments. We wanted the NHS to adopt new innovation and technologies and to move away from a system in which the drug companies set a price that NICE and the NHS appraise and reject, leaving patients unable to access the medicines that their clinicians believe are best for them.

Instead, we should have a system that puts the patient at the heart of the service. If a clinician believes that a medicine is the right one for their patient, they should be able to prescribe it and the NHS and the pharmaceutical company should settle on a fair price, reflecting the value of that drug and a fair return to the costs involved in drug development.

[Bill Wiggin (North Herefordshire) (Con)]

One of the things my right hon. Friend will know probably better than anyone from his role as Secretary of State for Health and something that is not well understood by my constituents is that the NHS is one of the most exciting clients for anybody selling drugs and has the most efficient buy-in capability. Why does that not seem to come across to our patients and constituents, and what about medicines that used to work but now are not available? Will he cover that in his speech?

[Mr Lansley]

On the latter point, no, but drugs that move beyond patent become generically available to the NHS. On the former point, my hon. Friend is absolutely right. I often found this issue frustrating. The best way for drug companies to get their new medicines adopted internationally is to introduce them successfully into the NHS. As we move to a more systematic patient record system, the introduction of new treatments and medicines through the NHS will provide the strongest possible database of outcomes anywhere in the world, because of the character and scale of the NHS. So he makes a really important point.

The principle behind securing patient access to new medicines lay behind the proposal for a value-based structure of drug pricing. It was my intention that come the introduction of the new pharmaceutical price regulation scheme, which was to be negotiated for January 2014, a transition to a new price-setting mechanism would also be in place. As the House will recall, in the interim, we introduced the cancer drugs fund because patients in the UK had significantly worse access to new cancer medicines than patients in other countries. That contributed to our poor relative cancer survival rates, and we were determined that it should stop and that the lack of access to new cancer medicines should be tackled while a longer-term solution was developed.

In 2010, therefore, we introduced the CDF to meet that specific need over a defined period and within a defined budget. The achievement of the CDF has been vital. More than 60,000 patients have accessed the cancer drugs they need through the CDF over the past four years. I am immensely proud of that fact. However, the fund is not, and was never intended to be, a permanent solution. Over time, more cancer drugs will be introduced, and if we carry on like this, an increasing number will not be available other than through the fund. Some drugs, such as cetuximab, Avastin and abiraterone, have already been substantially provided through the CDF. If this continues, while other drugs are added, it will greatly increase the cost.

I welcome the Government’s commitment to the CDF through to 2016—it is needed while the pricing of drugs to the NHS is tackled—but that extension cannot continue indefinitely. I therefore call on the Government to reinvigorate the drive to a value-based assessment of new drug pricing and to incorporate that into the PPRS, so that while the Government and the NHS have control of the budget, the NHS can make all licensed new medicines available through the NHS. In addition, it would incentivise innovation in the pharmaceutical industry and result in a fair return to industry on the cost of drug discovery.

The CDF has been necessary and successful, but it was intended only as a bridge to a better scheme across the whole NHS. It cannot bear the weight that will fall on it if we do not reform the system for the pricing of medicines more generally. If we can see our way to that reform, the prospect of de-listing new or existing medicines to the CDF can be deferred. However, reform of drug pricing has not been progressed as it should have been, or as we hoped it would be.

The new PPRS did not incorporate a value-based assessment of the pricing of medicines payable by the NHS. It gave the Treasury a good deal, securing a real-terms reduction in the drugs budget, but a reduction via a rebate is not transparent to the NHS. Drug companies setting their own price for new medicines will continue to set prices that conflict with NICE cost-effectiveness thresholds.

Members might have noted that, yesterday, Roche won an appeal against NICE’s final appraisal of Kadcyla, a drug used to treat HER2-positive breast cancer. Roche won on the basis that NICE should have taken account of the PPRS but did not do so. It argued that as a budget control mechanism, the PPRS, through its rebate, could be argued to offset the relatively high cost of a medicine on introduction. Roche won the appeal, but I have to say that the NICE appraisal might none the less remain unchanged.

The rebate is not predictable; nor is it attributable to any particular drug. It goes to the Treasury, not to the NHS. So, in practice, any NHS purchaser of a high-cost medicine must fully absorb the cost, and the opportunity cost, that paying a high price implies. This case highlights the theoretical link between a NICE appraisal and the PPRS, and it demonstrates how the PPRS does not in practical terms serve to resolve the dilemma of how to introduce high-cost medicines in the NHS.

The PPRS deal showed how much the pharmaceutical industry in this country was willing to offer for a guaranteed rate of return and the ability to set prices at introduction here in the UK, which can then act as a reference price for a quarter of the drugs market across the globe. The current PPRS of course benefits the shareholders and the boards of the big pharmaceutical companies, which are able to maintain high prices throughout a quarter of the world on the back of high prices in the UK, even for those drugs that offer limited clinical benefit. The other beneficiaries are those in the Government who are able to plan spending on drugs a little bit better than they were before. The losers, unquestionably, are patients, who continue to be denied access to the drugs that their doctors think they need.

This is not the kind of price regulation we should have in future. Price should reflect the value of new medicines. A new drug that offers little or no benefit relative to the best available alternative for treatment should secure only a small price differential. New drugs that tackle unmet need or substantially reduce the burden of disease should enjoy a correspondingly substantial price premium. By such a means, we would incentivise innovation and drug development, particularly in relation to major unmet targets. We could also build a premium into pricing in areas in which drug development was most needed, such as early-stage dementia, new antibiotics or the treatment for some cancers, such as pancreatic and ovarian cancer.

The benefits of a value-based pricing system were set out in an OECD study six years ago. But the study recognised—as, subsequently, did we—that the principle had yet to be given practical effect. A year ago, the Minister responsible, Earl Howe, said that value-based assessment would be taken forward and that it would be brought in late this year. That is not happening. NICE was given the task of developing value-based assessment last year, but in September this year, it appeared to have put that on the back burner. That is just not good enough.

Without value-based assessment, NICE will continue to apply an arbitrary threshold to a measurement of the benefits of drugs which takes into account only the quality-adjusted life year gain—the QALY—and end-of-life addition, not the broader societal benefits or the need to promote drugs targeted at key areas of therapeutic need and to promote innovation.

We must look to the value beyond the QALY. We must ask NICE to design a clearer methodology for value, but not just through add-ons to its existing methodology. It should recognise the burden of disease in extending life and the importance of greater clinical and patient engagement. In developing realistic pricing, it could draw on the real-world mature outcomes data for drug use that the cancer drugs fund has given us. It must also draw on the work done by charities and by Sanofi to examine ways in which patient engagement with NICE could be supported. Qualitative judgment of innovation and patient benefits must form a part of this broader assessment, as well as the quantitative data relating to the QALY.

I congratulate Ministers for pushing the NHS to promote innovation. We had our report in December 2011 and more recently Ministers have launched the early access to medicine scheme. The Under-Secretary of State for Health, my hon. Friend the Member for Mid Norfolk (George Freeman), has been right not only to support that and the Medical Innovation Bill but to launch a review of how innovation processes can be enhanced in the NHS.

How perverse would it be if, at the same time, licensed and effective medicines were not approved or available through the NHS? In recent months, a number of drugs have not been approved by NICE, such as Kadcyla, Alimta for lung cancer and abiraterone for prostate cancer prior to chemotherapy. Several of those cases demonstrate the problem of paying for new personalised medicines, but we cannot see the difficult process of introducing new drugs being made even worse by the de-listing of drugs by the cancer drugs fund.

I hope that in response to the debate Ministers will tell NICE to reinvigorate and make progress on the work on value-based assessment, while developing a new methodology in the way that I have described. The Government should work with industry to develop the pharmaceutical price regulation scheme, so that pharmaceutical companies can, within the overall framework, continue to set the price of their medicines at introduction but accept that the NHS should receive a rebate if, and to the extent that, a value-based assessment shows a lower price. That would lead to drug-specific rebates that could then be incorporated within the overall rebate for budget control purposes. In my view, such a system must be in place by 2016, so that the cancer drugs fund can be maintained between now and then and can be the bridge that it was intended to be, while having a realistic time-limited remit.

Only by pushing forward with such measures can we expect in future to offer doctors in the NHS the assurance that they can access the medicines and treatments they think best for their patients and give patients the confidence that the NHS, as a comprehensive free service, is able and willing to provide whatever treatment is in their best interests. I am grateful for the time and attention of the House.