NICE is accused of “jockeying for position” in new drug pricing schemeBMJ 2008; 337 doi: https://doi.org/10.1136/bmj.a1422 (Published 22 August 2008) Cite this as: BMJ 2008;337:a1422
All rapid responses
I am delighted to read that the National Institute for Health and
Clinical Excellence (NICE) now acknowledges that thought should be given
not only to a drug’s effectiveness and quality adjusted life year (QALY)
value, which is challenging enough to calculate, but also to ways to
influence the drug’s cost (1). But in a free, efficient market, something
that the UK Government is actively encouraging for health care purchasers
and providers, it is must be for individual pharmaceutical companies,
“giant pharma”, to decide whether it makes commercial sense to sell a drug
to the National Health Service (NHS) at a price that allows it to meet the
particular cost per QALY thresholds that NICE applies.
The NHS in England and Wales which is responsible for delivering on
decisions that NICE makes is but one of many drug purchasers worldwide. A
more effective way to counterbalance the market power of the “drugs
giants” to set prices would be to have much greater cooperation and
agreement across the European Union on drug purchasing decisions. An
inability to sell a drug to 300 million potential users may encourage
“giant pharma” to reconsider their pricing strategies in a way that
negotiations with the NHS in England and Wales alone may not, whether or
not NICE is involved.
(1) BMJ 2008; 337: a1422
Competing interests: No competing interests
The NHS is the main purchaser of pharmaceuticals in England
and Wales. ()
However the basis of the relationship is putatively triumvirate such that
doctors decide, patients consume and the DoH simply pays.
The DoH avoids a charge of monopoly by arguing that control
of purchasing is left to individual doctors. However there are controls on how
individual doctors are permitted to spend NHS money. These include
The use of guidelines
Explicitly limiting the services and treatments
that it will pay for through:
the legally binding decisions of NICE as
approved by the Secretary of State for Health; and
the limits placed upon funding authorities
within the NHS
Additionally there are mechanisms whereby the DoH uses its
buyer power to reduce its costs of purchase. The most obvious is the Pharmaceutical Price
Regulation Scheme (‘PPRS’) () which limits the price that
the NHS can be charged for pharmaceutical treatments. The PPRS has been
recently been criticised by the Office of Fair Trading for being based upon profits
and price rather than upon value and price. () Importantly the current
interim agreement permits free pricing of newly introduced pharmaceutical
the treatment is not available unless the terms of the guidance are met the
clinical discretion of the medical professional is reduced to merely
determining whether the guidance is met or not. If the guidance is met a second
choice arises as to whether the treatment should be delivered or not. However, if the guidance is evidence-based then it is likely that the
patient will benefit if the guidance is met and a legal professional obligation to provide the treatment arises.
virtue of the operation of the legal professional duty of care the treatment
should be generally delivered unless there are clearly exceptional
circumstances. This means that the socpe of clinical discretion is significantly curtailed. Thus effective decision making power within
the market place passes from the medical professional to the entity creating the guidance.
NICE is simply a limb of the Department of Health which in turn has control
over the NHS. This turns the putative tripartite relationship into an effective bipartite one.
has recently approved the use of ranibizumab for use in patients suffering
neovascular age-related macular degeneration but it has done so, in effect, by
limiting the price it must pay for the drug. The first 14 injections can be
provided by the NHS. Any further injections that are clinically indicated are
to be paid for by the company providing the drug.()
this latest move by NICE the question arises as to whether the NHS has
effectively become a complex monopoly purchaser of pharmaceutical products. The
deal could not readily have arisen in the absence of effective monopoly buyer
power. With the changes in the way that the healthcare market works the
Department of Health can no longer hide behind the clinical discretion of
doctors as a means to avoid a charge of monopoly.
consequences of these actions of NICE are to make stark the political choice
market principles which drive the pharmaceutical industry; and
purchaser’s need to ration healthcare in the face of rising demand and cost.
is of note in this context that the free market in private healthcare provision
by hospital consultants was subject to investigation by a previous incarnation
of the Competition Commission, the Monopolies and Mergers Commission.()
core question therefore becomes should the State provision of healthcare (solely)
be entitled to the privilege of monopoly advantage? If there is any doubt as to
the answer to this question then the consequence should be that the Office of
Fair Trading should consider exercising its powers under s.131(1) Enterprise
Act 2002 and refer the situation to the Competition Commission for
see R v Secretary Of State For Health ex
parte British Association Of European Pharmaceutical Distributors 
EWHC Admin 183
Office of Fair Trading. ThePharmaceutical PriceRegulation Scheme.
An OFT market study.http://www.oft.gov.uk/shared_oft/reports/comp_policy/oft885.pdf
And Mergers Commission. Private medical services: A report on agreements and
practices relating to charges for the supply of private medical services by NHS
consultants. (1994) Cm 2452www.competition-commission.org.uk/rep_pub/reports/1994/348privmedical.htm#full
Competing interests: The NHS is the main purchaser of pharmaceuticals in Englandand Wales. (
Michael Rawlins criticism of the drug industry for profiteering is
not without basis as recently demonstrated by the long-running Lucentis
The National Institute for Health and Clinical Excellence this week
announced it would sanction the use of Lucentis (ranibizumab) for patients
with age-related macular degeneration (AMD).(1) This signals a u-turn from
its initial draft guidance that had originally concluded it would only be
cost effective compared with standard treatment if treatment was limited
for the better seeing eye only.(2) This implied only treating one eye and
therefore risk losing functional vision, which both doctors and patient
groups unsurprisingly found unacceptable. Both NICE and PCTs found
themselves pummelled by the media, ministers and patient groups, as well
as court action. The real issue that has not been addressed however is the
exorbitant price that the pharmaceutical company is able to charge the NHS
for a product that desperate patients are prepared to pay for.
Age-related Macular Degeneration (AMD) is the commonest cause of
visual impairment in the UK with around 26,000 new cases of wet AMD
annually. It is characterized by choroidal neovascularisation, an abnormal
growth of new blood vessels beneath the retina, which leads to loss of
central vision. In the last few years, new treatment modalities have been
developed for what was previously an untreatable condition. Lucentis and
Avastin (bevacizumab) are both recombinant human monoclonal antibodies
that work by binding and inhibiting vascular endothelial growth factor
which is the cause of choroidal neovascularisation. Avastin is a
glycosylated antibody whereas Lucentis is an antibody fragment although
the active component differs by only 6 amino acids. Avastin is licensed
for the treatment of metastatic colorectal and breast cancer, but not
intra-ocular use. Lucentis, on the other hand, is licensed for intra-
Lucentis is extremely expensive and there are significant cost
implications of widespread use. Drug costs per injection are of the order
of around £100 for Avastin but could be as low as £6 plus the cost of
aseptic preparation compared to £761 for Lucentis. For a 14 injection
course, this equates to roughly £1,400 for Avastin compared to £10,654 for
Lucentis.(3) For the typical Primary Care Trust (PCT) serving a population
of 250,000, it could expect around 107 new cases of wet AMD a year. The
cost of Lucentis treatment for these patients would amount to over £1.1
million per annum. Overall costs including outpatient review over 10 years
could add up to 1% of the total current NHS budget.
NICE estimated that Lucentis would cost between £17,800 to £35,200
per QALY gained depending on the type of wet AMD treated.(2) These costs
were estimated on the presumption that treatment is stopped after 2 years.
However, it is not known if the 14 injections course represents the
optimal dosing regimen and patients may require long term treatment and
follow up over many years. Lucentis was deemed to only be cost effective
for the NHS with a dose capping arrangement that reportedly has just been
agreed by the manufacturer.
Is there a case for Avastin? Although unlicensed for ocular use in
the UK, it is an internationally recognized treatment modality for AMD and
has been widely used off-label in thousands of patients worldwide.(4,5) As
Avastin and Lucentis are closely related, clinical efficacy and side-
effect profiles are likely to be similar. Several studies published have
so far suggested that Avastin is an effective treatment.(4,6,7,8) At
present, multiple case series have reported no short-term safety concerns
although the follow-up period may not be long enough to draw any firm
conclusions. One survey of 70 centres using Avastin worldwide, covering
7,113 injections in 5,228 patients, reported low adverse event rates of
less than 0.21%.4 It is also postulated that as Avastin is a larger
molecule, it may remain in the eye longer than Lucentis and therefore
allow for less frequent injections. On the other hand. manufacturing
standards do differ: for intra-ocular formulations, particulate matter has
to be very low and Avastin is not manufactured with that in mind.
From a cost point of view, Lucentis could be over 30 times more
expensive than Avastin. One health technology assessment published last
year concluded that due to the price differentials, Avastin would be more
cost effective even if there were differences in effectiveness and side-
effects.(9) This view is supported by cost effectiveness modelling which
showed that Lucentis would need to be 2.5 times more effective than
Avastin in terms of visual acuity.(10) The modelling estimated that the
annual cost to the NHS for treating 25,000 new cases of AMD annually would
be £300 million for Lucentis compared to £8 million for Avastin.
NICE unfortunately is unable to consider Avastin as it can only
assess drugs for their licensed purpose. The question then is why Avastin
has not got a license for intra-ocular use in the UK. Genentech, the
company that manufactures both Avastin and Lucentis has been reluctant to
apply for a license for Avastin for AMD. This is perhaps unsurprising as
it is in a position of imperfect agency and stands to make considerable
financial gains from Lucentis.
Health commissioners face a dilemma between choosing Lucentis, where
there is reasonably good evidence for clinical effectiveness and safety
but with a high cost, versus Avastin which is considerably cheaper and
more affordable but lacking in enough evidence to support its use. The new
NICE position obliges local commissioners to use Lucentis, and will no
doubt be trumpeted by patient groups as a victory for patients. However,
it is a hollow victory as cash-strapped Primary Care Trusts, often
“villainized” by the media for their Scrooge-like tendencies, will now be
under more pressure than before to find resources with which to fund this
costly treatment. The redistribution of resources invariably could imply
other services suffering as a consequence. Where some patients gain,
others will no doubt lose out. The only real winners are the makers of
1. National Institute for Health and Clinical Excellence (2008).
Press release : 2008/052 NICE issues final guidance on the use of
ranibizumab and pegaptanib for the treatment of age-related macular
degeneration (AMD). London: NICE.
2. National Institute for Health and Clinical Excellence (2008).
Macular degeneration (age-related) – pegaptanib and ranibizumab: Appraisal
consultation. London: NICE.
3. Drugs and Therapeutics Bulletin. A view on new drugs for macular
degeneration. Drugs and Therapeutics Bulletin 2007; 45 (7):49-52.
4. Fung AE, Rosenfeld PJ, Reichel E. The International Intravitreal
Bevacizumab Safety Survey: using the internet to assess drug safety
worldwide. Br J Ophthalmol 2006; 90:1344-1349.
5. International Council of Ophthalmology International Clinical
Guidelines. Age-related Macular Degeneration (Management Recommendations).
http://www.icoph.org/guide (Accessed 4/4/08)
6. Spaide RF et al. Intravitreal bevacizumab treatment of choroidal
neovascularization secondary to age-related macular degeneration. Retina.
2006 Apr; 26(4):383-90.
7. Maturi RK et al. Electrophysiologic findings after intravitreal
bevacizumab (Avastin) treatment. Retina. 2006 Mar; 26(3):270-4.
8. Avery RL et.al. Intravitreal bevacizumab (Avastin) for neovascular
age-related macular degeneration. Ophthalmology. 2006 Mar; 113(3):363-372
9. Wild C, Adlbrecht Ch. Rapid Assessment LBI-HTA 02: Avastin for age
-related macular degeneration. Ludwig Boltzmann Institut fuer Health
Technology Assessment (LBIHTA), 2007. http://eprints.nta.lbg.ac.at/718/
10. Raftery J, Clegg A, Jones J, et.al. Ranibizumab (lucentis) versus
bevacizumab (avastin): modelling cost effectiveness. Br J Ophthalmol 2007.
Competing interests: No competing interests