Carrying NICE over the threshold

Researchers at the University of York have argued that NICE is advising the NHS “to pay too much” for new drugs. NICE uses ‘quality adjusted life years’ (QALYs), to compare different drugs, devices and other technologies for different conditions. NICE’s ‘threshold,’ over which treatments are less likely to be recommended for use in the NHS, is typically between £20,000 and £30,000 per QALY. New research led by Professor Karl Claxton suggests that paying more than £13,000 per QALY for technologies “does more harm than good” by displacing other more effective healthcare from the NHS. Sir Andrew Dillon, NICE’s chief executive, says it’s not as simple as that:

Sir Andrew Dillon

New treatments often cost more than existing healthcare when they’re first introduced. Deciding to use them means accepting that you can do less of the cheaper things that make up the majority of what the NHS does. These decisions always have consequences.

Karl Claxton’s work is important because it brings to life the dry concepts of cost effectiveness thresholds and opportunity costs. It shows that when you decide to move with the cutting edge of medicine, that there’s a price to pay, and with his work, we have one researcher’s views on who’s paying it.

The NHS has always had a choice about whether to use some of its money to adopt new things. It usually does and so the question is how to balance its investments in new and existing treatments and practices.

Over the last 16 years, we think we’ve found a balance that reflects what the public expect the NHS to do. Our independent committees use a threshold for recommending treatments of between £20,000 and £30,000 per quality adjusted life year. We think it represents a reasonable compromise between ensuring everyone has fair and equitable access to the NHS and enabling access to new and innovative treatments.

At this threshold, NICE currently recommends 8 out of 10 drugs or other technologies that it appraises, including 6 out of 10 cancer drugs. So we are careful about protecting, as much as we can, the interests of those who don’t benefit from the newest treatments.

Unless you believe that drug companies would be prepared to lower their prices in an unprecedented way, reducing the threshold to £13,000 per QALY would mean the NHS closing the door on most new treatments.

At the other end of the spectrum, we obviously can’t just say yes to anything and everything. We don’t have enough money and anyway, not everything is worth having. And drug companies need the discipline of a critical market to make sure that they recognise that price matters.

Whether we’ve got the balance right is a question for everyone to reflect on; it’s certainly not a decision just to be left to health economists.

And we need to think carefully about what’s being valued. Concentrating only on QALYs means we are in danger of losing sight of other things that people, health systems and the government value very highly. This includes encouraging an innovative UK research base, or perhaps valuing more highly specific treatments that may be the only option for people with certain conditions. These aspects are not captured by the QALY which is why our committees have never used QALYs as the sole determinant in their decisions

So we need our economists to help us develop new tools that combine all these things. This will help our committees capture the opportunity cost of all the things that are valuable about new technologies. Our methods of appraising drugs continually evolve to do that.  

We’ll be studying his work carefully. We can’t change the threshold by ourselves. If there’s a case for doing so, it needs to emerge from a wider debate between the government, NHS England, NICE and others with responsibility for the NHS and with the public who use it and pay for it.

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