Saturday, August 09, 2008

NICE Won - High Prices and New Deals

This week in the UK the National Institute for Health and Clinical Excellence (NICE), which advises the National Health Service (NHS), proposed against further use of four treatments for advanced renal cell carcinoma that has spread from the primary tumour. A final decision on the proposal is not expected from the NHS until January.

NICE applies criteria for "cost-effectiveness" which the four drugs - Avastin (bevacizumab) owned by Genetech/Roche; Nexavar (sorafenib) owned by Bayer; Sutent (sunitinib) owned by Pfizer; and Torisel (temsirolimus) owned by Wyeth - did not fulfil.

The decision has been widely criticised as the drugs present the very few options for patients with this advanced renal cancer. Charities, including Cancer Research UK, have condemned the decision. And practitioners have raised concerns regarding the effectiveness of interferon as the only treatment option remaining. Professor John Wagstaff of the South Wales Cancer Institute told the Independent that there would be no point in referring patients as around 75% gain no real benefit from interferon. James Whale (pictured), broadcaster, was diagnosed with renal cancer in 2000 and told the Telegraph "If final guidance remains as it currently stands it will certainly mean an early death sentence for many."

However Professor Peter Littlejohns, Clinical and Public Health Director at NICE, has defended the decision in a BBC report, maintaining that providing these treatments would mean forgoing treatments for other patients in other areas.

GSK, on the other hand, is said to be working to alleviate pricing obstacles to NICE approval for the drug Tyverb, used in the treatment of breast cancer. In this case as well, NICE refused to adopt the new drug despite GSK's attempts to negotiate a "risk-sharing" arrangement with the Department of Health (DH) where the DH is charged only for the proportion of patients estimated to have received significant benefits from the treatment. The UK-based pharmaceutical company is now working towards a "price-volume" deal with the DH in order to resolve the concerns with cost.

The "price-volume" proposal presents an innovation in pricing where a cap is introduced on the total cost of the medicine to the NHS, regardless of the number of patients being treated (whether it is higher or lower than the cap). The fixed price will cover the cost of the drug for several thousand patients. This price would apply if fewer patients were recruited. The NHS will therefore benefit if it identifies a higher number of patients to receive the drug.

The Financial Times describes the GSK proposal as "pioneering" at a time when pharmaceutical companies are coming under increased pressure to address pricing obstacles to adequate delivery of healthcare and patented medicines. The proposal innovates upon a conventional business model to the company's benefit of greater overall sales and to the benefit of patients in greater access to new medicines.

But this might be a bridge too far for some and a deal too late for many.

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