Getting better value from the NHS drug budget

The development of innovative drugs in areas of need is risky and expensive for drug companies compared with modifying existing compounds to create “me too” drugs. Most new drugs fall into the second category,1 and the NHS spends billions of pounds each year on them, even though they often have little or no incremental value over alternative agents. Effectively, the NHS is rewarding the drug industry for poor investment and creating a disincentive for risk taking and genuine innovation. When resources are limited, giving one patient an expensive drug with no added value when cheaper alternatives exist stops other patients getting treatments they need.

In the top 10 prescribed drug classes by cost, over £3bn was spent in England alone on branded drugs where in most cases equally effective low cost generic alternatives are available.2 By contrast, new innovative drugs approved by NICE between 1999 and 2004 added £800m a year to the UK drugs bill. This is money well spent especially if they are first in class drugs acting on newly discovered biological pathways in areas of unmet need.3 However, only a fifth of all new drugs brought to market offer any advantage over existing therapies.1 Furthermore, drug companies spend three times more on marketing (much on “me too” drugs) than on research.4 Society should explicitly and preferentially redirect funding towards important but riskier research and development.