Higher drug prices will boost development of personalised medicine, says new report

BMJ 2013; 347 doi: (Published 16 July 2013) Cite this as: BMJ 2013;347:f4549
  1. Krishna Chinthapalli
  1. 1BMJ

Raising prices of drugs when they are used for certain indications or in particular groups of patients should be encouraged so that new personalised drugs can be developed, a new report has concluded.1

John Bell, regius professor of medicine at the University of Oxford and chairman of the report’s oversight committee, said, “Current pricing and reimbursement systems do not provide adequate incentives for the development of personalised medicines.

“A new system of pricing needs to be developed that enables prices to be adjusted over time to reflect the increases in value.”

The report, published by the Academy of Medical Sciences, a professional body for biomedical researchers, suggests that the value of a drug could be measured by the National Institute for Care and Excellence (NICE) in terms of quality adjusted life years (QALYs).

Bell said, “If you’re treating a whole population, and out of that population you’re getting a certain number of QALYs, then the pharmaceutical company will get a certain amount of money back. If all those QALYs are coming from 10% of the patients, the pharmaceutical company should get the same amount of money, but all those other people are spared having to swallow drugs that aren’t going to help them.”

Adrian Towse, director of the Office of Health Economics and a coauthor of the report, said, “If we simply cut the company’s revenues by 90% then we’re sending the wrong signals for innovation. More importantly, there may well be other indications or uses for that drug that have quite different values­—they may be higher or lower.

“If, in a sense, they can’t change their price, then what they may well do is think it’s just not worth developing that additional indication.”

Bell pointed to the case of the leukaemia treatment alemtuzumab, which was being used off label for patients with multiple sclerosis. Controversially, the manufacturer, Genzyme, withdrew it in preparation for a relaunch of the drug at a price “15 to 20 times” higher than before.2 It was made available again to some patients after pressure from the BMJ.3

Bell said, “[Genzyme] feel like if they can’t get the price that they need for multiple sclerosis, then they’ve got to stop supplying it for the other indications. There’s a really fundamental problem.”

Bell and Towse argue that such value based pricing, allowing rises in prices of drugs used for patients who were most likely to benefit, would encourage drug companies to target groups of patient who would have fewer adverse effects and experience greater benefits.

One example in the report is that of chemotherapy for non-small cell lung cancer patients carrying a certain mutation: “Now patients with lung cancer can have biopsy tissue sent for genetic analysis to ascertain their suitability for this treatment, and receive an accurate, genetically derived diagnosis in 7-10 days.

“These developments have transformed therapy for those 5% of NSCLC [non-small cell lung cancer patients] driven by EML4-ALK mutation, meaning that by simply taking two capsules per day, the cancer shrinks or disappears for more than one in every two people treated, rather than for one in every ten as was the case with traditional chemotherapy.”1

The government has already proposed a new pricing system for drugs, based on the value that they offer to patients. It is due to come into effect next year, and NICE has been chosen to assess the value of new drugs.4 5

Other recommendations in the report include greater collection of high quality genomic data; maximising the use of routinely collected clinical data in research; collaboration between industry, healthcare providers, and academia; compulsory accreditation of cheaper in-house testing by health institution laboratories; and greater intellectual property protection for diagnostics.

The report was developed with and supported by Amgen, Roche, GE Healthcare, and the Association of the British Pharmaceutical Industry.


Cite this as: BMJ 2013;347:f4549


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