HEALTH ECONOMICS Health Econ. 24: 1–7 (2015) Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/hec.3130
COMMENT
CAUSES FOR CONCERN: IS NICE FAILING TO UPHOLD ITS RESPONSIBILITIES TO ALL NHS PATIENTS? KARL CLAXTONa,b,*, MARK SCULPHERb, STEPHEN PALMERb and ANTHONY J CULYERb a
Department of Economics and Related Studies, University of York b Centre for Health Economics, University of York
ABSTRACT Organisations across diverse health care systems making decisions about the funding of new medical technologies face extensive stakeholder and political pressures. As a consequence, there is quite understandable pressure to take account of other attributes of benefit and to fund technologies, even when the opportunity costs are likely exceed the benefits they offer. Recent evidence suggests that NICE technology appraisal is already approving drugs where more health is likely to be lost than gained. Also, NICE recently proposed increasing the upper bound of the cost-effectiveness threshold to reflect other attributes of benefit but without a proper assessment of the type of benefits that are expected to be displaced. It appears that NICE has taken a direction of travel, which means that more harm than good is being, and will continue to be, done, but it is unidentified NHS patients who bear the real opportunity costs. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
1. POLICY BACKGROUND In 2007, the UK’s Office of Fair Trading suggested that the prices paid by the UK National Health Service (NHS) ought to be based on an assessment of the value that each drug offers (Office of Fair Trading, 2007). The type of economic evaluation already undertaken for NICE’s technology appraisals can identify the maximum price the NHS can afford to pay; where the additional benefits offered by the drug just offset the benefits expected to be lost or ‘displaced’ elsewhere because the additional resources required are not available to offer care, which would benefit other NHS patients. It is this principle, of paying the maximum, but no more than the maximum, for branded pharmaceuticals (and only whilst they are protected by their patent) that became known as value-based pricing (VBP) (Claxton, 2007; Claxton et al., 2008). Aside from estimating the additional costs and benefits that a new drug might offer, two other questions are critical: (i) how much health is expected to be displaced (an evidence-based assessment of the cost-effectiveness threshold); and (ii) how to establish mechanisms that would enable manufacturers to negotiate value-based prices in the UK that might be lower than in other countries (Claxton, 2007; Claxton et al., 2011)? In 2010, the government sought to translate the principles of VBP into a set of specific policy proposals (Department of Health, 2010, 2011). Subsequently, however, attention focused on widening the concept of ‘value’ in the drug appraisal process (Department of Health, 2012). NICE was given responsibility for incorporating these other aspects of value into its Guide to Methods of Technology Appraisal subject to specific terms of reference from the Department of Health (DH). NICE made detailed proposals, which included increasing the threshold up to £50 000 per quality-adjusted life-year (QALY) for technologies, which offered health benefits where the burden of disease was judged to be high (National Institute for Health and Care Excellence, 2014a). In responding to results of the public consultation, NICE has decided to make no changes in the short term, but to continue to consider how measures of burden and wider social benefit might be incorporated into the appraisal process (National Institute for Health and Care Excellence, 2014b). It is to be hoped that NICE will *Correspondence to: Centre for Health Economics, University of York, Heslington, York, YO10 5DD, UK. E-mail: [email protected] The copyright line for this article was changed on 25 August 2015 after original online publication.
© 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
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begin to place the unidentified NHS patients who bear the real opportunity costs of its decisions at the heart of its deliberative process and especially as it reconsiders how other attributes of benefit might be taken into account. 2.. COST-EFFECTIVENESS, DISPLACEMENT AND THRESHOLDS The importance of opportunity cost in the DH’s terms of reference was clear: ‘Adopt the same benefit perspective for all technologies falling within the scope of VBP, and for displaced treatments’ (Appendix 1) (National Institute for Health and Care Excellence, 2014a). Since 2004 opportunity cost, or displacement, has been reflected in NICE’s appraisal process through specification of an explicit cost-effectiveness threshold range of £20 000 and £30 000 per QALY (National Institute for Health and Clinical Excellence (NICE), 2013). This range was based on the values implied by the decisions made by NICE prior to 2004 but is widely recognised (including by NICE) as having little or no empirical foundation. Nonetheless, the proposed ‘value-based assessment’ suggested increasing the upper bound to £50 000 per QALY for all technologies.1 Which threshold to apply within this range was to rest on informal consideration of whether the burden of disease could be regarded as sufficiently ‘high’ when measured in two different ways. Important questions include: how might NICE resist the pressure to apply higher thresholds routinely? What does recent history tell us about the NICE’s ability to resist such pressure? How can an adequate assessment of displacement be considered? Recent history gives cause for concern. It seems that, for many years, NICE has not been rejecting technologies with ICERs below the upper bound of £30 000 per QALY, so £30 000 has evolved as an effective minimum threshold. Recent evidence suggests that, even when special considerations, such as end of life criteria,2 do not apply, many technologies with ICERs above £30 000 per QALY are nonetheless recommended (a 0.5 probability of rejection resulted from ICERs of £39 417 to £43 949 per QALY, Dakin et al., 2014). It is quite clear (empirically) that the official lower bound of the NICE threshold (£20 000 per QALY) is generally not the relevant one; and that the upper bound (£30 000 per QALY) has effectively become the starting point for deliberation. One explanation for this ‘acceptance creep’ is that the broad selection of stakeholders who contribute to the NICE process excludes a key constituency: those unidentified NHS patients who bear the true opportunity costs of NICE decisions. NICE undoubtedly faces extensive pressure from the direct beneficiaries of a positive recommendation, including manufacturers, the patients who might benefit and their clinicians. Indeed, these stakeholder groups have, quite appropriately, become an important part of the appraisal process. However, without institutional leadership to ensure balance, there is much less pressure to take full account of the likely impact on other NHS patients. The most recent evidence and the nature of the recent proposals suggests that NICE is not providing sufficient leadership and is failing to uphold this critical responsibility to all NHS patients. 3. POTENTIAL CONSEQUENCES OF INCREASING THE THRESHOLD RANGE The consequences of increasing the threshold should be of deep and general concern. This is especially so, as it comes after publication of the only empirical research to have estimated how much and what type of health is expected to be displaced using national data on local NHS expenditure and mortality outcomes across different disease areas. This peer-reviewed NIHR and MRC-funded research was originally suggested by NICE as a topic for the MRC in 2009. The results suggest that the upper bound of £30 000 is certainly too high and even NICE’s increasingly irrelevant lower bound may also be too high (Claxton et al., 2013). The recently renegotiated Pharmaceutical Price Regulation Scheme took a threshold of £20 000 per QALY to be an appropriate ‘basic threshold’ representing (unweighted) QALYs displaced (Department of Health and Association of the British Pharmaceutical Industry, 2013). Given this agreement and the evidence currently available, it is the 1
Currently, only drugs that fulfil NICE’s criteria for special consideration of life extending interventions given to patients at end of life may have an ICER of up to £50 000 per QALY and still be recommended. The conditions for satisfying these criteria are, however, very specific and apply to a small proportion of new products. 2 See foot note 1 mentioned earlier. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
Health Econ. 24: 1–7 (2015) DOI: 10.1002/hec
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lower bound of £20 000, not £30 000 or the proposed £50 000 per QALY that can provide a conservative assessment of the amount of health that is likely to be displaced. The scale of the health consequences of the observed ‘acceptance creep’ can be simply illustrated. For example, a new technology with an ICER of £30 000 that would cost the NHS an additional £10m per year would be expected to generate up to 334 additional QALYs each year. However, with a threshold of £20 000 per QALY, finding the £10m required from existing resources would be expected to lead to a loss of 500 QALYs each year across different disease areas (Table I). Therefore, NICE may already be doing more harm than good by using the upper bound of the existing threshold range (£30 000 per QALY), for example, imposing a net loss of 166 QALYs for every additional £10m that NICE guidance costs the NHS. Raising the upper bound to £50 000 would only increase the damage done, for example, with an ICER of £50 000 the technology would be expected to generate up to 200 additional QALYs each year so the net harm to the NHS would increase to 300 QALYs for every additional £10m of NHS costs. The estimates of the health effects of addition NHS costs that are available indicate what type of health is likely to be lost and in which disease areas (Claxton et al., 2013). For example, the health effects of £10m reported in Table I also indicates how these 500 QALYs are likely to be made up including (i) the type of health effects (e.g., 33 additional deaths and 151 life years in the above example); and (ii) where these different types of health effects are likely to occur, for example, with greater life year effects in cancer and circulatory diseases and greater quality of life effects in mental health and respiratory and neurological diseases.
4. REFLECTING OTHER ASPECTS OF VALUE Applying any threshold that is higher than one that reflects the health that is expected to be displaced will necessarily reduce overall health outcomes (more QALYs will be lost than gained). This may be reasonable Table I. The health impact of £10m based on estimates of the distribution of health forgone (Claxton et al., 2013) assuming a cost per quality-adjusted life-year threshold of £20 000
Totals Cancer Circulatory Respiratory Gastro-intestinal Infectious diseases Endocrine Neurological Genito-urinary Trauma and injuries* Maternity and neonates* Disorders of blood Mental health Learning disability Problems of vision Problems of Hearing Dental problems Skin Musculo skeletal Poisoning and Accident and Emergency Healthy individuals Social care needs Other (General Medical Services)
Change in spend
Additional deaths
LY lost
Total QALY lost
Due to premature death
Quality of life effects
10 (£m) 0.45 0.76 0.46 0.32 0.33 0.19 0.6 0.46 0.77 0.68
33 2.4 14.7 8.6 1.7 0.5 0.4 0.8 1.5 0 0
151 24.3 75 10.4 16 3.4 3.2 4.2 2.1 0 0.3
500 17 69.7 148.4 28.4 10.2 39.2 70.6 6.9 0 0.1
97 15.8 47.7 6.5 10.5 2.3 2.1 2.8 1.4 0 0.1
403 1.2 22.1 141.8 17.9 7.8 37.1 67.8 5.5 0 0.1
0.21 1.79 0.1 0.19 0.09 0.29 0.2 0.36 0.09 0.35 0.3 1.01
0.2 1.8 0 0 0 0 0.2 0.3 0 0 0 0
1.1 8.3 0.1 0.1 0.1 0 0.7 1.2 0.1 0.1 0 0
14.1 61.6 0.5 2.7 9.1 4.4 1.2 15 0.5 0.5 0 0
0.7 5.4 0.1 0.1 0.1 0 0.5 0.8 0.1 0.1 0 0
13.4 56.3 0.4 2.7 9 4.4 0.8 14.3 0.5 0.4 0 0
LY, life year; QALY, quality-adjusted life year. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
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if the type of health that is gained is regarded as more valuable than the health that is lost, or regarding the people gaining it to be more ‘meritorious’ in their claim on resources than others. Therefore, taking account of other aspects of value associated health (e.g., burden of disease) or non-health aspects of value (e.g., wider social benefits) requires an assessment of how much improvement in health (QALYs) is worth giving up to achieve more of these attributes of benefit and how much health and other attributes of benefit are expected to be displaced. 4.1. Burden of disease As part of its value-based assessment plans, NICE proposed to represent burden of disease using a measure of proportional shortfall.3 A maximum weight of 2.5 was to apply to the cost-effectiveness threshold when considering drugs for diseases regarded as having a ‘high’ burden. Estimates of burden of disease in this form are available across all the disease areas reported in Table I and are reported in Table II for a sample of ICD codes in which NICE has issued guidance over recent years.4 The burden associated with the average of the displaced QALY effects across the NHS is significant (a proportional shortfall of 8%) and suggests that some drugs will have health effects in disease areas where the burden is lower than in those where health will be displaced (e.g., irritable bowel syndrome).5 This means that the threshold should be lower, not higher, in such circumstances. If an explicit set of weights had been specified, then the weighted QALYs displaced could have been calculated and a weighted QALY threshold reported, based on whichever basic QALY threshold is regarded as appropriate given the evidence currently available. Taking account of other aspects of value will inevitably lead to more QALYs being lost than gained. However, failing to consider explicitly what type of health is displaced and for whom means that the health gained could well be less valuable (i.e., lost in areas of lower burden) and not more valuable than the health that is lost (i.e., lost in areas of higher burden). 4.2. Wider social impact NICE appeared to be concerned that reflecting the net non-health impacts on patients, carers, and wider society would have a pronounced age gradient (patient populations where the consumption of services is greater than their production) (Meltzer, 1997). Caution is indeed warranted because measuring and valuing non-health effects poses difficult and disputed questions of social value whilst offering few benefits – the UK market has little influence on drug development (Claxton et al., 2010). Nonetheless, the estimates provided by the DH (Appendix B) combine all marketed and non-marketed effects using evidence currently available and methods that are consistent with the Treasury Green Book (required by the terms of reference). These are reported in Table II for the same sample of ICD codes.6 NICE’s proposals rejected the approach developed by DH, partly on a mistaken view that it would be inconsistent with government legalisation on age discrimination, and instead adopted an ‘absolute shortfall’ measure of burden as a proxy for ‘wider social impact’.7 This was to be taken into account in the same way as ‘proportional shortfall’: by applying a maximum weight of 2.5 to the ‘basic’ threshold of £20 000 per QALY. Exactly 3
The expected QALYs lost due to having a disease (the difference between quality adjusted life expectancy for the general population and those with the disease) as a proportion of the remaining quality adjusted life expectancy with disease (all matched for age and gender). 4 Estimates are available for all three digit ICD codes by age and gender; see Appendix A 5 The burden associated with a particular technology for a particular indication and patient population would be better estimated within the assessment report and manufacturers submissions (as suggested in NICE’s proposals), rather than using these averages for each ICD code. 6 The estimates (see Appendix B: methods to estimate wider social benefits) are a function of age, gender, and quality of life and ICD chapter head and can be linked to estimates of displaced QALY by ICD code, which are detailed in Appendix A: displacement by ICD code and Claxton et al. 2014. 7 The QALYs lost due to having a disease – the difference between quality adjusted life expectancy for the general population and those with the disease matched for age and gender. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
Health Econ. 24: 1–7 (2015) DOI: 10.1002/hec
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Table II. Measures of Burden (Appendix A) and wider social benefits (Appendix B) associated with the average of displaced quality-adjusted life year effects (Claxton et al., 2013) Proportionate shortfall (% QALY loss)
Absolute shortfall (QALY loss)
Wider social benefits (net production)
C22
Liver cancer
73%
C22
Liver cancer
C25 C34
Pancreatic cancer Lung cancer
73% 71%
C25 C34
Pancreatic cancer Lung cancer
9.97 9.68
E11 M45
C92 G20
Myeloid leukaemia Parkinson’s disease Myeloma Kidney cancer
38% 31%
F20 G35
Schizophrenia Multiple sclerosis
7.62 6.18
F30 F20
Rheumatoid arthritis Diabetes Ankylosing spondylitis Depression Schizophrenia
31% 22%
C92 G20
6.15 4.6
J45 M81
Asthma Osteoporosis
£20 100 £17 910
Multiple sclerosis Emphysema and COPD Alzheimer’s disease Dementia Schizophrenia
18% 17%
C90 J43
4.45 3.8
G35 J43
C64
3.75
G40
Multiple sclerosis Emphysema and COPD Epilepsy
£15 482 £14 525
14%
Myeloid leukaemia Parkinson’s disease Myeloma Emphysema and COPD Kidney cancer
14% 12%
F30 M05
3.63 2.83
L40 Displaced
Rheumatoid arthritis Prostate cancer
11%
E11
Depression Rheumatoid arthritis Diabetes
2.68
E66
Psoriasis Average of displaced QALYs Obesity
11%
Displaced
2.07
C53
Cervical cancer
£6912
11%
J45
1.86
K50
Irritable Bowel Syndrome
£6284
E11
Embolisms, fibrillation, thrombosis Diabetes
Average of displaced QALYs Asthma
11%
G30
1.68
J30
Allergic rhinitis
£5234
C18
Colon cancer
10%
F03
Alzheimer’s disease Dementia
1.68
G20
£3102
I21
Acute myocardial infarction Stroke
9%
G40
Epilepsy
1.32
C50
Parkinson’s disease Breast cancer
8%
C18
Colon cancer
1.28
G30
£351
Embolisms, fibrillation, thrombosis Prostate cancer Acute myocardial infarction Stroke Cervical cancer Breast cancer Streptococcal septicaemia Allergic rhinitis
1.16
A40
Alzheimer’s disease Streptococcal septicaemia
1.06 1
F03 I64
Dementia Stroke
0.83 0.6 0.55 0.38
C18 C61 C64 I21
£8061 £10 602 £13 211 £14 395
0.3
I26
0.28 0.26
J10 C90
Colon cancer Prostate cancer Kidney cancer Acute myocardial infarction Embolisms, fibrillation, thrombosis Influenza Myeloma
0.19
C92
Myeloid leukaemia
£24 813
C90 C64 G35 J43 G30 F03 F20 M05 C61 I26
I64
10.7
M05
£30 034 £27 421 £26 190 £23 489 £22 697
£14 245 £11 890 £11 611 £8138
£2888
8%
I26
F30 G40
Average of displaced QALYs Depression Epilepsy
6% 4%
C61 I21
J45 C50 C53 L40
Asthma Breast cancer Cervical cancer Psoriasis
4% 3% 3% 2%
I64 C53 C50 A40
J10
Influenza
2%
J30
M81 J30
Osteoporosis Allergic rhinitis
2% 2%
M81 K50
A40
Streptococcal septicaemia Irritable Bowel Syndrome Obesity Ankylosing spondylitis
2%
J10
Osteoporosis Irritable Bowel Syndrome Influenza
1%
L40
Psoriasis
0.19
C22
Liver cancer
£32 709
0% 0%
E66 M45
Obesity Ankylosing spondylitis
0.18 0.11
C34 C25
Lung cancer Pancreatic cancer
£36 067 £53 860
Displaced
K50 E66 M45
£513 £2430 £6949
£16 752 £21 568 £23 382
QALY, quality-adjusted life year. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
Health Econ. 24: 1–7 (2015) DOI: 10.1002/hec
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the same problems apply: no explicit weights were proposed (whether evidence-based or not), with no proper account taken of the burden associated with the displaced QALY effects (average of 2.07 QALYs in Table II). The notion that absolute shortfall might be a proxy for wider social benefits is quite clearly fallacious. If there is any relationship, it appears more likely to be a negative one. This has consequences for patients with certain diseases, which might be regarded as unfair. For example, improving the health of patients with ankylosing spondylitis offers very high wider social benefits, which are higher than those that are likely to be displaced (£11 611 per QALY is associated with the average of displaced QALY effects), but would be scored very low using the two measures of burden proposed by NICE. Similarly, the wider social benefits associated with improving health outcomes in depression is higher than the benefits likely to be displaced but lower than the absolute burden likely to be displaced. Whether or not the implications of these proposals were anticipated or represent reasonable and widely shared social values is unclear (Rowen et al., 2014).8 5. CONCLUSIONS NICE’s recent proposals seems to confirm the other evidence that the direction of travel is towards a greater concern for the interests of those stakeholders who are already well represented at the expense of its responsibilities to all NHS patients. The evidence suggests that more harm than good is being done, but it is the unidentified and unrepresented NHS patients who bear the true (health) opportunity costs. Although finding reasons to approve new drugs is undoubtedly politically expedient, this cannot be ethically literate, because the interests of NHS patients, whether they are identifiable or not, are just as real and equally deserving of the type of care and compassion that can be offered by a collectively funded health care system. It is to be hoped that NICE will begin to place the unidentified NHS patients who bear the real opportunity costs at the heart of its deliberative process; especially as it reconsiders how other attributes of benefit might be taken into account. The key issue remains that of finding a mechanism allowing manufacturers to agree potentially lower prices in the UK that reflect their value to the NHS (whichever attributes of benefit are included). Unfortunately for the NHS, this critical issue appears to have been entirely neglected, despite a number of suggestions about how UK transaction prices for drugs could be insulated from parallel trade and international reference pricing (Claxton, 2007; Claxton et al., 2011). NICE cannot be held responsible for this policy failure. The only price negotiation mechanism in place is that which has always been available: discounts offered product by product (e.g.., Patient Access Schemes). Consequently, the best that can be expected is the rejection of effective drugs when manufacturers are unwilling to offer sufficient discounts to global prices. The worst that can be expected is that NICE will find reasons to approve them nonetheless and inflict considerable damage on the NHS and the patients it serves. ACKNOWLEDGEMENTS
We would like to thank Susan Griffin, Andrea Manca, Claire McKenna, Marta Soares and Eldon Spackman for providing comments on a joint submission to the NICE consultation on value-based assessment (Review of the Guide to the Methods of Technology Appraisals, 2014) on which this paper draws. We would also like to thank Marta Soares for revisions to Appendix 1: Clarification on aspects of the threshold project proposed to be used within VBP, Marta Soares and Karl Claxton, University of York. July 2013, which forms the basis of Appendix A. This material was presented to the NICE Methods Working Party on VBP, Meeting 2, 19 July 2013. We would also like to thank Gavin Roberts for providing the material contained in Appendix B, which was 8
The UK evidence suggests people are willing to accept smaller improvements in health when the gains are in areas with high absolute shortfall, but there is no UK evidence that supports weighting using proportional short fall D. Rowen et al., Update: Eliciting Societal Preferences for Weighting Qalys According to Burden of Illness, Size of Gain and End of Life. Policy Research Unit in Economic Evaluation of Health & Care Interventions (Eepru) Research Report, Http://Www.Eepru.Org.Uk/Publications%282353189%29.Htm (Sheffield: EEPRU, Universities of Sheffield and York, 2014), ibid. Society’s preference for more rather than less resources for other uses (both marketed and non-marketed) seems self evident.
© 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
Health Econ. 24: 1–7 (2015) DOI: 10.1002/hec
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presented to the NICE Methods Working Party on VBP, Meeting 3, 27 August 2013. Of course, the views expressed in this report, as well as any errors or omissions, are the sole responsibility of the authors. Claxton and Sculpher are former members of the NICE Technology Appraisal Committee, and Palmer is a current member. Culyer is a former vice chairman of NICE. The University of York receives funding from the National Institute for Health Research to undertake technology assessments for NICE and from NICE to participate in the NICE Decision Support Unit.
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Claxton K. 2007. OFT, VBP: QED? Health Economics 16(6): 545–58. Claxton K, Briggs A, Buxton M et al. 2008. Value based pricing for NHS drugs: an opportunity not to be missed? British Medical Journal 336: 251–4. Claxton K, Walker S, Palmer S et al. 2010. Appropriate perspectives for health care decisions. Centre for Health Economics. Centre for Health Economics, University of York: York. Claxton K, Sculpher M, Carroll S. 2011. Value-based pricing for pharmaceuticals: Its role, specification and prospects in a newly devolved NHS. CHE Research Paper 60. http://www.york.ac.uk/media/che/documents/papers/researchpapers/ CHERP60.pdf (York: Centre for Health Economics, University of York). Claxton K, Martin S, Soares M et al. 2013. Methods for the Estimation of the NICE Cost Effectiveness Threshold. Centre for Health Economics (CHE) Research Paper 81. CHE, University of York: York. Dakin H, Devlin N, Feng Y et al. 2014. The influence of cost-effectiveness and other factors on NICE decisions. DOI: 10.1002/hec.3086’, Health Economics. Department of Health. 2010. A New Value-Based Approach to the Pricing of Branded Medicines - a Consultation. London Department of Health. Department of Health. 2011. A New Value-Based Approach to the Pricing of Branded Medicines: Government Response to Consultation. Department of Health: London. Department of Health. 2012. Technical report on wider social benefits: briefing document. Paper presented at NICE workshop 24th October 2012 (London: Department of Health). Department of Health and Association of the British Pharmaceutical Industry. 2013. 2014 PPRS: Heads of Agreement Heads of Agreement for the 2014 Pharmaceutical Price Regulation Scheme. Department of Health: London. Meltzer D. 1997. Accounting for future costs in medical cost-effectiveness analysis. Journal of Health Economics 16: 33–64. National Institute for Health and Care Excellence. 2014a. Consultation Paper: Value-Based Assessment of Health Technologies. NICE: London. National Institute for Health and Care Excellence. 2014b. Value Based Assessment. Item 4, NICE Board Meeting 17 September. NICE: London. National Institute for Health and Clinical Excellence (NICE). 2013. Updated Guide to the Methods of Technology Appraisal. NICE: London. Office of Fair Trading. 2007. The Pharmaceutical Price Regulation Scheme. An OFT market study. OFT: London. Rowen D, Brazier J, Mukuria C et al. 2014. Update: Eliciting societal preferences for weighting QALYs according to burden of illness, size of gain and end of life. Policy Research Unit in Economic Evaluation of Health & Care Interventions (EEPRU) Research Report, http://www.eepru.org.uk/Publications%282353189%29.htm (Sheffield: EEPRU, Universities of Sheffield and York).
SUPPORTING INFORMATION Additional supporting information may be found in the online version of this article at publisher's website.
© 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
Health Econ. 24: 1–7 (2015) DOI: 10.1002/hec
COMMENT
CAUSES FOR CONCERN: IS NICE FAILING TO UPHOLD ITS RESPONSIBILITIES TO ALL NHS PATIENTS? KARL CLAXTONa,b,*, MARK SCULPHERb, STEPHEN PALMERb and ANTHONY J CULYERb a
Department of Economics and Related Studies, University of York b Centre for Health Economics, University of York
ABSTRACT Organisations across diverse health care systems making decisions about the funding of new medical technologies face extensive stakeholder and political pressures. As a consequence, there is quite understandable pressure to take account of other attributes of benefit and to fund technologies, even when the opportunity costs are likely exceed the benefits they offer. Recent evidence suggests that NICE technology appraisal is already approving drugs where more health is likely to be lost than gained. Also, NICE recently proposed increasing the upper bound of the cost-effectiveness threshold to reflect other attributes of benefit but without a proper assessment of the type of benefits that are expected to be displaced. It appears that NICE has taken a direction of travel, which means that more harm than good is being, and will continue to be, done, but it is unidentified NHS patients who bear the real opportunity costs. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
1. POLICY BACKGROUND In 2007, the UK’s Office of Fair Trading suggested that the prices paid by the UK National Health Service (NHS) ought to be based on an assessment of the value that each drug offers (Office of Fair Trading, 2007). The type of economic evaluation already undertaken for NICE’s technology appraisals can identify the maximum price the NHS can afford to pay; where the additional benefits offered by the drug just offset the benefits expected to be lost or ‘displaced’ elsewhere because the additional resources required are not available to offer care, which would benefit other NHS patients. It is this principle, of paying the maximum, but no more than the maximum, for branded pharmaceuticals (and only whilst they are protected by their patent) that became known as value-based pricing (VBP) (Claxton, 2007; Claxton et al., 2008). Aside from estimating the additional costs and benefits that a new drug might offer, two other questions are critical: (i) how much health is expected to be displaced (an evidence-based assessment of the cost-effectiveness threshold); and (ii) how to establish mechanisms that would enable manufacturers to negotiate value-based prices in the UK that might be lower than in other countries (Claxton, 2007; Claxton et al., 2011)? In 2010, the government sought to translate the principles of VBP into a set of specific policy proposals (Department of Health, 2010, 2011). Subsequently, however, attention focused on widening the concept of ‘value’ in the drug appraisal process (Department of Health, 2012). NICE was given responsibility for incorporating these other aspects of value into its Guide to Methods of Technology Appraisal subject to specific terms of reference from the Department of Health (DH). NICE made detailed proposals, which included increasing the threshold up to £50 000 per quality-adjusted life-year (QALY) for technologies, which offered health benefits where the burden of disease was judged to be high (National Institute for Health and Care Excellence, 2014a). In responding to results of the public consultation, NICE has decided to make no changes in the short term, but to continue to consider how measures of burden and wider social benefit might be incorporated into the appraisal process (National Institute for Health and Care Excellence, 2014b). It is to be hoped that NICE will *Correspondence to: Centre for Health Economics, University of York, Heslington, York, YO10 5DD, UK. E-mail: [email protected] The copyright line for this article was changed on 25 August 2015 after original online publication.
© 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
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begin to place the unidentified NHS patients who bear the real opportunity costs of its decisions at the heart of its deliberative process and especially as it reconsiders how other attributes of benefit might be taken into account. 2.. COST-EFFECTIVENESS, DISPLACEMENT AND THRESHOLDS The importance of opportunity cost in the DH’s terms of reference was clear: ‘Adopt the same benefit perspective for all technologies falling within the scope of VBP, and for displaced treatments’ (Appendix 1) (National Institute for Health and Care Excellence, 2014a). Since 2004 opportunity cost, or displacement, has been reflected in NICE’s appraisal process through specification of an explicit cost-effectiveness threshold range of £20 000 and £30 000 per QALY (National Institute for Health and Clinical Excellence (NICE), 2013). This range was based on the values implied by the decisions made by NICE prior to 2004 but is widely recognised (including by NICE) as having little or no empirical foundation. Nonetheless, the proposed ‘value-based assessment’ suggested increasing the upper bound to £50 000 per QALY for all technologies.1 Which threshold to apply within this range was to rest on informal consideration of whether the burden of disease could be regarded as sufficiently ‘high’ when measured in two different ways. Important questions include: how might NICE resist the pressure to apply higher thresholds routinely? What does recent history tell us about the NICE’s ability to resist such pressure? How can an adequate assessment of displacement be considered? Recent history gives cause for concern. It seems that, for many years, NICE has not been rejecting technologies with ICERs below the upper bound of £30 000 per QALY, so £30 000 has evolved as an effective minimum threshold. Recent evidence suggests that, even when special considerations, such as end of life criteria,2 do not apply, many technologies with ICERs above £30 000 per QALY are nonetheless recommended (a 0.5 probability of rejection resulted from ICERs of £39 417 to £43 949 per QALY, Dakin et al., 2014). It is quite clear (empirically) that the official lower bound of the NICE threshold (£20 000 per QALY) is generally not the relevant one; and that the upper bound (£30 000 per QALY) has effectively become the starting point for deliberation. One explanation for this ‘acceptance creep’ is that the broad selection of stakeholders who contribute to the NICE process excludes a key constituency: those unidentified NHS patients who bear the true opportunity costs of NICE decisions. NICE undoubtedly faces extensive pressure from the direct beneficiaries of a positive recommendation, including manufacturers, the patients who might benefit and their clinicians. Indeed, these stakeholder groups have, quite appropriately, become an important part of the appraisal process. However, without institutional leadership to ensure balance, there is much less pressure to take full account of the likely impact on other NHS patients. The most recent evidence and the nature of the recent proposals suggests that NICE is not providing sufficient leadership and is failing to uphold this critical responsibility to all NHS patients. 3. POTENTIAL CONSEQUENCES OF INCREASING THE THRESHOLD RANGE The consequences of increasing the threshold should be of deep and general concern. This is especially so, as it comes after publication of the only empirical research to have estimated how much and what type of health is expected to be displaced using national data on local NHS expenditure and mortality outcomes across different disease areas. This peer-reviewed NIHR and MRC-funded research was originally suggested by NICE as a topic for the MRC in 2009. The results suggest that the upper bound of £30 000 is certainly too high and even NICE’s increasingly irrelevant lower bound may also be too high (Claxton et al., 2013). The recently renegotiated Pharmaceutical Price Regulation Scheme took a threshold of £20 000 per QALY to be an appropriate ‘basic threshold’ representing (unweighted) QALYs displaced (Department of Health and Association of the British Pharmaceutical Industry, 2013). Given this agreement and the evidence currently available, it is the 1
Currently, only drugs that fulfil NICE’s criteria for special consideration of life extending interventions given to patients at end of life may have an ICER of up to £50 000 per QALY and still be recommended. The conditions for satisfying these criteria are, however, very specific and apply to a small proportion of new products. 2 See foot note 1 mentioned earlier. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
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lower bound of £20 000, not £30 000 or the proposed £50 000 per QALY that can provide a conservative assessment of the amount of health that is likely to be displaced. The scale of the health consequences of the observed ‘acceptance creep’ can be simply illustrated. For example, a new technology with an ICER of £30 000 that would cost the NHS an additional £10m per year would be expected to generate up to 334 additional QALYs each year. However, with a threshold of £20 000 per QALY, finding the £10m required from existing resources would be expected to lead to a loss of 500 QALYs each year across different disease areas (Table I). Therefore, NICE may already be doing more harm than good by using the upper bound of the existing threshold range (£30 000 per QALY), for example, imposing a net loss of 166 QALYs for every additional £10m that NICE guidance costs the NHS. Raising the upper bound to £50 000 would only increase the damage done, for example, with an ICER of £50 000 the technology would be expected to generate up to 200 additional QALYs each year so the net harm to the NHS would increase to 300 QALYs for every additional £10m of NHS costs. The estimates of the health effects of addition NHS costs that are available indicate what type of health is likely to be lost and in which disease areas (Claxton et al., 2013). For example, the health effects of £10m reported in Table I also indicates how these 500 QALYs are likely to be made up including (i) the type of health effects (e.g., 33 additional deaths and 151 life years in the above example); and (ii) where these different types of health effects are likely to occur, for example, with greater life year effects in cancer and circulatory diseases and greater quality of life effects in mental health and respiratory and neurological diseases.
4. REFLECTING OTHER ASPECTS OF VALUE Applying any threshold that is higher than one that reflects the health that is expected to be displaced will necessarily reduce overall health outcomes (more QALYs will be lost than gained). This may be reasonable Table I. The health impact of £10m based on estimates of the distribution of health forgone (Claxton et al., 2013) assuming a cost per quality-adjusted life-year threshold of £20 000
Totals Cancer Circulatory Respiratory Gastro-intestinal Infectious diseases Endocrine Neurological Genito-urinary Trauma and injuries* Maternity and neonates* Disorders of blood Mental health Learning disability Problems of vision Problems of Hearing Dental problems Skin Musculo skeletal Poisoning and Accident and Emergency Healthy individuals Social care needs Other (General Medical Services)
Change in spend
Additional deaths
LY lost
Total QALY lost
Due to premature death
Quality of life effects
10 (£m) 0.45 0.76 0.46 0.32 0.33 0.19 0.6 0.46 0.77 0.68
33 2.4 14.7 8.6 1.7 0.5 0.4 0.8 1.5 0 0
151 24.3 75 10.4 16 3.4 3.2 4.2 2.1 0 0.3
500 17 69.7 148.4 28.4 10.2 39.2 70.6 6.9 0 0.1
97 15.8 47.7 6.5 10.5 2.3 2.1 2.8 1.4 0 0.1
403 1.2 22.1 141.8 17.9 7.8 37.1 67.8 5.5 0 0.1
0.21 1.79 0.1 0.19 0.09 0.29 0.2 0.36 0.09 0.35 0.3 1.01
0.2 1.8 0 0 0 0 0.2 0.3 0 0 0 0
1.1 8.3 0.1 0.1 0.1 0 0.7 1.2 0.1 0.1 0 0
14.1 61.6 0.5 2.7 9.1 4.4 1.2 15 0.5 0.5 0 0
0.7 5.4 0.1 0.1 0.1 0 0.5 0.8 0.1 0.1 0 0
13.4 56.3 0.4 2.7 9 4.4 0.8 14.3 0.5 0.4 0 0
LY, life year; QALY, quality-adjusted life year. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
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if the type of health that is gained is regarded as more valuable than the health that is lost, or regarding the people gaining it to be more ‘meritorious’ in their claim on resources than others. Therefore, taking account of other aspects of value associated health (e.g., burden of disease) or non-health aspects of value (e.g., wider social benefits) requires an assessment of how much improvement in health (QALYs) is worth giving up to achieve more of these attributes of benefit and how much health and other attributes of benefit are expected to be displaced. 4.1. Burden of disease As part of its value-based assessment plans, NICE proposed to represent burden of disease using a measure of proportional shortfall.3 A maximum weight of 2.5 was to apply to the cost-effectiveness threshold when considering drugs for diseases regarded as having a ‘high’ burden. Estimates of burden of disease in this form are available across all the disease areas reported in Table I and are reported in Table II for a sample of ICD codes in which NICE has issued guidance over recent years.4 The burden associated with the average of the displaced QALY effects across the NHS is significant (a proportional shortfall of 8%) and suggests that some drugs will have health effects in disease areas where the burden is lower than in those where health will be displaced (e.g., irritable bowel syndrome).5 This means that the threshold should be lower, not higher, in such circumstances. If an explicit set of weights had been specified, then the weighted QALYs displaced could have been calculated and a weighted QALY threshold reported, based on whichever basic QALY threshold is regarded as appropriate given the evidence currently available. Taking account of other aspects of value will inevitably lead to more QALYs being lost than gained. However, failing to consider explicitly what type of health is displaced and for whom means that the health gained could well be less valuable (i.e., lost in areas of lower burden) and not more valuable than the health that is lost (i.e., lost in areas of higher burden). 4.2. Wider social impact NICE appeared to be concerned that reflecting the net non-health impacts on patients, carers, and wider society would have a pronounced age gradient (patient populations where the consumption of services is greater than their production) (Meltzer, 1997). Caution is indeed warranted because measuring and valuing non-health effects poses difficult and disputed questions of social value whilst offering few benefits – the UK market has little influence on drug development (Claxton et al., 2010). Nonetheless, the estimates provided by the DH (Appendix B) combine all marketed and non-marketed effects using evidence currently available and methods that are consistent with the Treasury Green Book (required by the terms of reference). These are reported in Table II for the same sample of ICD codes.6 NICE’s proposals rejected the approach developed by DH, partly on a mistaken view that it would be inconsistent with government legalisation on age discrimination, and instead adopted an ‘absolute shortfall’ measure of burden as a proxy for ‘wider social impact’.7 This was to be taken into account in the same way as ‘proportional shortfall’: by applying a maximum weight of 2.5 to the ‘basic’ threshold of £20 000 per QALY. Exactly 3
The expected QALYs lost due to having a disease (the difference between quality adjusted life expectancy for the general population and those with the disease) as a proportion of the remaining quality adjusted life expectancy with disease (all matched for age and gender). 4 Estimates are available for all three digit ICD codes by age and gender; see Appendix A 5 The burden associated with a particular technology for a particular indication and patient population would be better estimated within the assessment report and manufacturers submissions (as suggested in NICE’s proposals), rather than using these averages for each ICD code. 6 The estimates (see Appendix B: methods to estimate wider social benefits) are a function of age, gender, and quality of life and ICD chapter head and can be linked to estimates of displaced QALY by ICD code, which are detailed in Appendix A: displacement by ICD code and Claxton et al. 2014. 7 The QALYs lost due to having a disease – the difference between quality adjusted life expectancy for the general population and those with the disease matched for age and gender. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
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Table II. Measures of Burden (Appendix A) and wider social benefits (Appendix B) associated with the average of displaced quality-adjusted life year effects (Claxton et al., 2013) Proportionate shortfall (% QALY loss)
Absolute shortfall (QALY loss)
Wider social benefits (net production)
C22
Liver cancer
73%
C22
Liver cancer
C25 C34
Pancreatic cancer Lung cancer
73% 71%
C25 C34
Pancreatic cancer Lung cancer
9.97 9.68
E11 M45
C92 G20
Myeloid leukaemia Parkinson’s disease Myeloma Kidney cancer
38% 31%
F20 G35
Schizophrenia Multiple sclerosis
7.62 6.18
F30 F20
Rheumatoid arthritis Diabetes Ankylosing spondylitis Depression Schizophrenia
31% 22%
C92 G20
6.15 4.6
J45 M81
Asthma Osteoporosis
£20 100 £17 910
Multiple sclerosis Emphysema and COPD Alzheimer’s disease Dementia Schizophrenia
18% 17%
C90 J43
4.45 3.8
G35 J43
C64
3.75
G40
Multiple sclerosis Emphysema and COPD Epilepsy
£15 482 £14 525
14%
Myeloid leukaemia Parkinson’s disease Myeloma Emphysema and COPD Kidney cancer
14% 12%
F30 M05
3.63 2.83
L40 Displaced
Rheumatoid arthritis Prostate cancer
11%
E11
Depression Rheumatoid arthritis Diabetes
2.68
E66
Psoriasis Average of displaced QALYs Obesity
11%
Displaced
2.07
C53
Cervical cancer
£6912
11%
J45
1.86
K50
Irritable Bowel Syndrome
£6284
E11
Embolisms, fibrillation, thrombosis Diabetes
Average of displaced QALYs Asthma
11%
G30
1.68
J30
Allergic rhinitis
£5234
C18
Colon cancer
10%
F03
Alzheimer’s disease Dementia
1.68
G20
£3102
I21
Acute myocardial infarction Stroke
9%
G40
Epilepsy
1.32
C50
Parkinson’s disease Breast cancer
8%
C18
Colon cancer
1.28
G30
£351
Embolisms, fibrillation, thrombosis Prostate cancer Acute myocardial infarction Stroke Cervical cancer Breast cancer Streptococcal septicaemia Allergic rhinitis
1.16
A40
Alzheimer’s disease Streptococcal septicaemia
1.06 1
F03 I64
Dementia Stroke
0.83 0.6 0.55 0.38
C18 C61 C64 I21
£8061 £10 602 £13 211 £14 395
0.3
I26
0.28 0.26
J10 C90
Colon cancer Prostate cancer Kidney cancer Acute myocardial infarction Embolisms, fibrillation, thrombosis Influenza Myeloma
0.19
C92
Myeloid leukaemia
£24 813
C90 C64 G35 J43 G30 F03 F20 M05 C61 I26
I64
10.7
M05
£30 034 £27 421 £26 190 £23 489 £22 697
£14 245 £11 890 £11 611 £8138
£2888
8%
I26
F30 G40
Average of displaced QALYs Depression Epilepsy
6% 4%
C61 I21
J45 C50 C53 L40
Asthma Breast cancer Cervical cancer Psoriasis
4% 3% 3% 2%
I64 C53 C50 A40
J10
Influenza
2%
J30
M81 J30
Osteoporosis Allergic rhinitis
2% 2%
M81 K50
A40
Streptococcal septicaemia Irritable Bowel Syndrome Obesity Ankylosing spondylitis
2%
J10
Osteoporosis Irritable Bowel Syndrome Influenza
1%
L40
Psoriasis
0.19
C22
Liver cancer
£32 709
0% 0%
E66 M45
Obesity Ankylosing spondylitis
0.18 0.11
C34 C25
Lung cancer Pancreatic cancer
£36 067 £53 860
Displaced
K50 E66 M45
£513 £2430 £6949
£16 752 £21 568 £23 382
QALY, quality-adjusted life year. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
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the same problems apply: no explicit weights were proposed (whether evidence-based or not), with no proper account taken of the burden associated with the displaced QALY effects (average of 2.07 QALYs in Table II). The notion that absolute shortfall might be a proxy for wider social benefits is quite clearly fallacious. If there is any relationship, it appears more likely to be a negative one. This has consequences for patients with certain diseases, which might be regarded as unfair. For example, improving the health of patients with ankylosing spondylitis offers very high wider social benefits, which are higher than those that are likely to be displaced (£11 611 per QALY is associated with the average of displaced QALY effects), but would be scored very low using the two measures of burden proposed by NICE. Similarly, the wider social benefits associated with improving health outcomes in depression is higher than the benefits likely to be displaced but lower than the absolute burden likely to be displaced. Whether or not the implications of these proposals were anticipated or represent reasonable and widely shared social values is unclear (Rowen et al., 2014).8 5. CONCLUSIONS NICE’s recent proposals seems to confirm the other evidence that the direction of travel is towards a greater concern for the interests of those stakeholders who are already well represented at the expense of its responsibilities to all NHS patients. The evidence suggests that more harm than good is being done, but it is the unidentified and unrepresented NHS patients who bear the true (health) opportunity costs. Although finding reasons to approve new drugs is undoubtedly politically expedient, this cannot be ethically literate, because the interests of NHS patients, whether they are identifiable or not, are just as real and equally deserving of the type of care and compassion that can be offered by a collectively funded health care system. It is to be hoped that NICE will begin to place the unidentified NHS patients who bear the real opportunity costs at the heart of its deliberative process; especially as it reconsiders how other attributes of benefit might be taken into account. The key issue remains that of finding a mechanism allowing manufacturers to agree potentially lower prices in the UK that reflect their value to the NHS (whichever attributes of benefit are included). Unfortunately for the NHS, this critical issue appears to have been entirely neglected, despite a number of suggestions about how UK transaction prices for drugs could be insulated from parallel trade and international reference pricing (Claxton, 2007; Claxton et al., 2011). NICE cannot be held responsible for this policy failure. The only price negotiation mechanism in place is that which has always been available: discounts offered product by product (e.g.., Patient Access Schemes). Consequently, the best that can be expected is the rejection of effective drugs when manufacturers are unwilling to offer sufficient discounts to global prices. The worst that can be expected is that NICE will find reasons to approve them nonetheless and inflict considerable damage on the NHS and the patients it serves. ACKNOWLEDGEMENTS
We would like to thank Susan Griffin, Andrea Manca, Claire McKenna, Marta Soares and Eldon Spackman for providing comments on a joint submission to the NICE consultation on value-based assessment (Review of the Guide to the Methods of Technology Appraisals, 2014) on which this paper draws. We would also like to thank Marta Soares for revisions to Appendix 1: Clarification on aspects of the threshold project proposed to be used within VBP, Marta Soares and Karl Claxton, University of York. July 2013, which forms the basis of Appendix A. This material was presented to the NICE Methods Working Party on VBP, Meeting 2, 19 July 2013. We would also like to thank Gavin Roberts for providing the material contained in Appendix B, which was 8
The UK evidence suggests people are willing to accept smaller improvements in health when the gains are in areas with high absolute shortfall, but there is no UK evidence that supports weighting using proportional short fall D. Rowen et al., Update: Eliciting Societal Preferences for Weighting Qalys According to Burden of Illness, Size of Gain and End of Life. Policy Research Unit in Economic Evaluation of Health & Care Interventions (Eepru) Research Report, Http://Www.Eepru.Org.Uk/Publications%282353189%29.Htm (Sheffield: EEPRU, Universities of Sheffield and York, 2014), ibid. Society’s preference for more rather than less resources for other uses (both marketed and non-marketed) seems self evident.
© 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.
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presented to the NICE Methods Working Party on VBP, Meeting 3, 27 August 2013. Of course, the views expressed in this report, as well as any errors or omissions, are the sole responsibility of the authors. Claxton and Sculpher are former members of the NICE Technology Appraisal Committee, and Palmer is a current member. Culyer is a former vice chairman of NICE. The University of York receives funding from the National Institute for Health Research to undertake technology assessments for NICE and from NICE to participate in the NICE Decision Support Unit.
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Health Econ. 24: 1–7 (2015) DOI: 10.1002/hec
