'Fairness', Risk Sharing and the European Price Cuts
As pharma companies protest decisions to cut drug prices in Greece, Spain and Germany, the question of fair play is brought in sharp focus. But, says Jacky Law, even-handedness in drug pricing works both ways.
Evaluating the cost-effectiveness of drugs has always been as cumbersome an exercise as it is controversial and challenging. But the effort to at least try to ensure fair play to payers, companies and patients is surely better than governments unilaterally cutting prices to deal with out-of-control public spending deficits.
Under the scheme, prices were to be reduced if patient outcomes proved worse than expected and the QALY (quality-adjusted life year) cost rose above this figure. Around 5000 patients were enlisted at a cost of around £50 million a year (once the costs of specialist MS nurses and of monitoring the scheme are added in). Seven years later, the first report on the scheme was published and showed disease progression was not only worse than predicted, but worse than in the untreated group.
Christopher McCabe, Professor of health economics at Leeds University, told the British Medical Journal this month (June) the results were so bad “the manufacturers would need to pay the NHS to use the drugs to make them cost effective.” Prices have not been reduced because the scientific advisory group overseeing the scheme, whose independence has been questioned, considers this to be a premature decision for reasons that are too long and complicated to go into here. The result is the NHS has spent £50 million a year for at least seven years and patients are no better off. Even the MS Society withdrew its support after the first results became known in 2009.
Moreover, according to Alastair Compston, Professor of neurology at the University of Cambridge, “attempts to force the drug companies to repay costs would be likely trigger complex legal arguments given the debate over methodological issues.”
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