NHS medicines watchdog ‘costing more lives than it saves’

The NHS medicines watchdog is costing more lives than it saves, a study has suggested.

The research, published in The Lancet, examined the health effects of decisions by the National Institute of Health and Care Excellence (Nice) over 20 years.

The study, led by the London School of Economics (LSE), found that newly approved medicines delivered 3.75 million additional years of full health at a cost of £75 billion.

However, it said redirecting the same funding to existing NHS services could have potentially added five million years of full health – meaning there was an overall net loss of 1.25 million healthy years.

The researchers said this was because many new drugs approved by Nice were more expensive than medicines already being used by the NHS.

They added: “This allows companies to charge prices that are higher than what the NHS pays to deliver similar health benefits using existing treatments and services.”

The study’s authors said Nice’s cost-effectiveness threshold for new drugs, set between £20,000 and £30,000 per additional year of health, compared with the NHS’s typical spending of £15,000 for the same outcome.

The watchdog is already under fire for the way it makes decisions, such as by not properly taking into account the effect of its rulings on the economy.

‘May no longer be justifiable’

Huseyin Naci, an associate professor of health policy at LSE and lead author of the paper, said: “New drugs can be a lifeline for patients who have significant unmet clinical needs. However, innovative drugs are expensive, and their costs do not always justify the benefits they offer.

“After more than a decade of underinvestment in the NHS, it may no longer be justifiable to have a Nice threshold that doesn’t reflect the amount the NHS needs to spend to generate health.

“Lowering the threshold would allow the NHS to negotiate better prices for new medicines, taking into account not only the benefits to patients receiving these drugs but also the impact on other NHS users who may lose out due to resource reallocation.”

Irene Papanicolas, a professor of health services, policy and practice at Brown University, and one of the authors of the study, said: “Our findings are reflective of the tight budget of the NHS. In this environment, offsetting funding from existing services to pay high prices for new drugs can more adversely affect population health than in health systems where there is greater budgetary flexibility.”

Beth Woods, a senior research fellow at the Centre for Health Economics at the University of York, and another of the study’s authors, added: “This work shows that there is a need to reform pharmaceutical pricing policy in England to better serve the health needs of all patients served by the NHS.”

Findings ‘could be underestimate’

The researchers, who examined Nice’s recommendations between 2000 and 2020, used drug sales data to estimate how many patients received them.

They then compared the health benefits of these drugs to other treatments that could be funded with the same money to establish their impact on population health.

However, the authors acknowledged several limitations in their analysis, including that data from Nice reports was incomplete due to redactions. A small number of new drugs were also excluded because of gaps in the data.

Assumptions also had to be made about how long patients remain on treatments when estimating the number of people receiving new drugs.

However, Dr Daniel Howdon, a health economist at the University of Leeds, said the “excellent and well-founded paper” may have underestimated its findings because the authors had used relatively conservative estimates.

‘Vale for money’

A Nice spokesman said: “Spending money on new medicines does create an opportunity cost, displacing services elsewhere in the health system. That’s why Nice’s role is vital: we carefully evaluate new treatments and recommend only those that offer value for money for the taxpayer.

“This is especially important during times of significant challenge to the NHS. Every pound of the NHS budget can only be spent once.”

They added: “If Nice had not recommended these innovative new medicines, they almost certainly would have been used within the NHS anyway.

“Without Nice’s input, funding decisions would be taken locally, leading to inequitable patient access (the ‘postcode lottery’) and potentially higher costs, because multiple local negotiations with pharmaceutical companies may not drive best value for the NHS.”