Re: Prioritising patients in negotiations over drug pricing – Reply to ABPI rapid response

Dear Editor,

We appreciate the ABPI’s response to our editorial, “Prioritising patients in negotiations over drug pricing,” published on 14 April 2023.

However, we disagree with their assertion that there is “no risk that the NHS will overpay for medicines.” While we acknowledge the important role NICE plays in evaluating the cost-effectiveness of new medicines in England, evidence suggests their current funding threshold of £20,000-30,000 per Quality-Adjusted Life Year (QALY) does not reflect the marginal productivity of the NHS. In fact, recent independent estimates suggest this current threshold is nearly double that of actual cost per QALY spent across the broader NHS.[1] This implies that current spending on medicines may already be displacing some existing treatments, presenting a net opportunity cost to the NHS.[2] Any further growth in medicines spending would only exacerbate this problem.

In their response, the ABPI mistakenly suggests that the spending figures cited in our editorial are based on “list” prices. However, we relied on figures reported by the NHS Business Authority, which (since 2020/21) reflect actual costs paid by the NHS, including any confidential discounts.[3]

We strongly disagree with the ABPI’s assessment of NICE’s optimised decisions as merely “restricting the range of patients who can access the medicine relative to the population it is licensed for.” Obtaining a medicines license does not require any evidence about comparative effectiveness to other treatments in the NHS, or how well a medicine works in all patients with a certain condition.[4] Previous research has also shown that extrapolation from clinical studies to licensed indications is common.[5] We believe any discrepancy between licensed indication and NICE recommendation reflects the appropriateness of a medicine’s use in the NHS. NICE’s optimised decisions serve as an essential safeguard ensuring that the NHS’s use of new medicines align more closely with existing best-available and current evidence from clinical trials.

The ABPI’s response suggests that the uptake of some latest medicines is often slow and fraught with unwarranted variation. However, the evidence basis of this assertion is questionable, as the Office for Life Sciences indicators do not distinguish between drugs with and without added therapeutic benefit.

We note that the ABPI’s response does not address the key part of our statement: “There is no evidence that national reimbursement policies affect global drug companies’ investment in domestic R&D.” While there is ample evidence documenting the association between lower revenues and R&D investment, what matters in the context of the UK is the location of R&D. We are not aware of any empirical evaluations that have documented whether R&D location is affected by national pricing policy. Unfortunately, the review cited by the ABPI does not address this important question, further supporting our original statement.[6]

Finally, we believe it would be appropriate for the ABPI to accurately disclose their conflict of interest, as the trade association representing the interests of the British pharmaceutical industry, in any future correspondence.[7]

References
1. Lomas J, Martin S, Claxton K. Estimating the Marginal Productivity of the English National Health Service From 2003 to 2012. Value Health. 2019;22(9):995-1002. doi:10.1016/j.jval.2019.04.1926
2. Claxton K, Martin S, Soares M, et al. Methods for the estimation of the National Institute for Health and Care Excellence cost-effectiveness threshold. Health Technol Assess Winch Engl. 2015;19(14):1-504. doi:10.3310/hta19140
3. NHS BSA. Prescribing Costs in Hospitals and the Community – England 2020/21. Published 2021. Accessed May 9, 2023. https://www.nhsbsa.nhs.uk/statistical-collections/prescribing-costs-hosp…
4. NICE. Types of technology appraisal recommendation | Technology appraisal guidance | NICE guidance | Our programmes | What we do | About. NICE. Published 2023. Accessed May 9, 2023. https://www.nice.org.uk/about/what-we-do/our-programmes/nice-guidance/ni…
5. Feldman D, Avorn J, Kesselheim AS. Use of Extrapolation in New Drug Approvals by the US Food and Drug Administration. JAMA Netw Open. 2022;5(4):e227958. doi:10.1001/jamanetworkopen.2022.7958
6. Lakdawalla DN. Economics of the Pharmaceutical Industry. J Econ Lit. 2018;56(2):397-449. doi:10.1257/jel.20161327
7. ABPI. ABPI 2021 Code of Practice. Published 2021. Accessed May 9, 2023. https://www.abpi.org.uk/reputation/abpi-2021-code-of-practice/