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Cost effective but unaffordable: an emerging challenge for health systems

BMJ 2017; 356 doi: (Published 22 March 2017) Cite this as: BMJ 2017;356:j1402

Re: Cost effective but unaffordable: an emerging challenge for health systems

There are two proximal stakeholders in the decision to list a new drug: current patients who will benefit and the drug company who gains revenue from selling the drug. Charlton et al argue that delaying introduction damages the former group. There are also more distal stakeholders in particular taxpayers and future patients.

The price charged by pharmaceutical companies is a business decision and its decision in England sets a precedent for other developed countries. Nevertheless, the market in England is large and so can generate a large revenue stream for the company. NHS England thus has important leverage and bargaining power.

Assuming the NHS budget is capped, which as the authors point out is a political decision, and that any money saved by negotiating a better price is retained in the NHS, the question at issue is whether slowing introduction is ethically or economically reasonable. If NHS England is able to negotiate a better price in the 'delayed introduction period', then economically the issue becomes whether the benefits foregone by delaying the introduction of the drug are worth the benefits which will be realised by spending the money now available on a different class of patients. The answer to that is unknown and depends on the incremental cost-effectiveness ratios of the delayed drug and the alternative use to which the money released by a better price is put.

A time limit on negotiations means that the patients who are adversely affected and those who will gain are not too separated in time.

Unfortunately, the Charlton et al paper does not consider the alternative use of the saved money so one could argue that the full ethical implications have not been considered.

Competing interests: No competing interests

24 March 2017
Stephen Duckett
Director, Health program, Grattan Institute
8 Malvina Place, Carlton VIC Australia