Value-Based Assessment in the UK: The Industry View

July 6, 2014
Leela Barham

Leela Barham is a freelance health economist and policy expert. She has published in peer-reviewed journals and presented at national and international conferences. She has provided advice to the Department of Health and Social Care on policy on pricing of branded medicines to inform the negotiation of a successor to the UK’s Pharmaceutical Price Regulation Scheme (PPRS), the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS), as well as worked with patient groups, the NHS, pharmaceutical companies and many others internationally on the economics of healthcare and pharmaceuticals. Contact Leela on leels@btinternet.com

Pharmaceutical Executive

In the UK, Value-Based Pricing (VBP) has morphed into Value-Based Assessment (VBA), with the National Institute for Health and Care Excellence (NICE) tasked with taking the loose policy concepts (established as far back as 2010) and actually implementing them.

In the UK, Value-Based Pricing (VBP) has morphed into Value-Based Assessment (VBA), with the National Institute for Health and Care Excellence (NICE) tasked with taking the loose policy concepts (established as far back as 2010) and actually implementing them.

Earlier this year, NICE set out its approach, which boiled down to taking a wider view of value - adding in Burden of Illness (BoI) and Wider Societal Impact (WSI) - both of which will be captured via the Quality Adjusted Life Year (QALY). At the same time though, they also suggested a maximum cost per Quality Adjusted Life Year (QALY) threshold of £50,000 (US$85,000), and amendments that would make it harder to see if End of Life adjustments still apply or not.

 

The proposals weren’t greeted with much joy back in March - perhaps the phrase “cautious optimism” captured the spirit of discussion then - but with a further three months to reflect and the consultation closed, just what does industry make of it all now?

The Association of the British Pharmaceutical Industry (ABPI) doesn’t seem too pleased with VBA. The only question they say an unequivocal “yes” to, is whether VBA has risks. ABPI basically says that the approach to BoI and WSI is at best partial, particularly missing is an emphasis on innovation. And a predictable ask is that whatever approach is taken to BoI the “highest weighting should be used for decision making purposes”. And that companies should be allowed to submit additional evidence on WSI.

It also points out that a 2.5 limit on the multiplier to apply to the basic £20,000 (US$34,000) per QALY suggested by NICE - equating to a maximum of £50,000 per QALY - isn’t well grounded in theory or practice.

Not only that, but it’s not really compatible with the new Pharmaceutical Price Regulation Scheme (PPRS). The scheme has for the very first time included a limit on NHS spend on branded medicines covered by scheme medicines, with companies picking up the rest of the bill. The ABPI push for a Multi-Criteria Decision Analysis (MCDA) framework - and this, they say, would need another consultation.

The Ethical Medicines Industry Group (EMIG) seems more comfortable with many elements of the NICE proposals, supporting both the proportional QALY shortfall for BoI, and absolute QALY shortfall for WSI although with understandable caveats that they’re proxies, not definitive. They want Committees to keep an eye out for any other benefits that aren’t necessarily well captured using the standard tools. Where they are more concerned is in the “maximum weight of 2.5 when all modifiers apply”- equating to a maximum of £50,000 per QALY for a positive NICE recommendation.

But they ask that the maximum is just dropped altogether; not a realistic prospect. And they dislike what amounts to an overly formulaic approach that having fixed weights for each component of value implies. Instead, they want to keep flexibility in the system. They also want to see “a period of reflection and further consultation” once VBA has been used given that the new approach is inherently risky.

There are different nuances running through both industry groups responses, but some points come out clearly in both; VBA is not a solution to the problem of poor access to innovative medicines, it’s risky and even though VBA has been a (very!) long time coming and isn’t even yet fully implemented, more time is needed to figure it out and make the right changes to the NICE approach.

The need for change is driven not only by the change to the PPRS, which in fairness to NICE was being negotiated behind closed doors whilst NICE was figuring out how it could really do VBA, but also because of the changes in the industry more broadly; stratified medicines being just one example.

No doubt NICE will be going through tens, if not hundreds of responses - the Department of Health (DH) got 188 responses to the original VBP consultation back in 2011.

NICE will be navigating views from small as well as large companies, and of course patients and others - there were actually more NHS responses than industry responses to the DH consultation back in 2011) - keen to chime in with their two penny worth. All I can say is, best of luck to them!

Leela Barham is an independent health economist. You can access website here and contact her at leels@btinternet.com

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