The coalition programme for government states:

• “We will create a cancer drugs fund to enable patients to access the cancer drugs their doctors think will help them, paid for using money saved by the NHS through our pledge to stop the rise in national insurance contributions from April 2011,” and
• “We will reform NICE and move to a system of value based pricing.”
• “We will ensure that there is a stronger voice for patients locally through directly elected individuals on the boards of their local primary care trusts. The remainder of the PCTs’ board will be appointed by the relevant local authority…”

The first test of new thinking was likely to relate to the next controversial NICE technology appraisal recommending against NHS use of some new high cost drug with poor clinical and cost effectiveness. This turned out to be guidance on 26 May recommending against the use of Bayer’s sorafenib (Nexavar) for hepatocellular carcinoma for patients in whom surgery or locoregional therapies have failed or are not suitable. NICE rejected this drug on the basis of its poor clinical and cost effectiveness. The lowest estimate was £52k per QALY, the highest considerably more (even including a patient access discount of 25%). Although it qualified as an end of life drug (criteria: small population, offers at least 3 months to patients with a life expectancy of less than 24 months)  the appraisal committee considered that “the additional weight that would need to be applied to bring the cost per QALY within the current threshold range was too large.”

The same day a DH spokesperson said: 

•  “We appreciated that this guidance would come as a disappointment to people with liver cancer and their families”
• That “the priority was to give patients access to the drugs recommended by their doctors on the NHS and that a new cancer drug fund would be established by April 2011”
• That the DH would “continue to seek prior to this, agreement to schemes with pharmaceutical companies, which will enhance access for patients to costly medicines”
• “We respect the expert independence of NICE and believe that it must be allowed to continue to issue guidance free from political interference. However, we believe there are fundamental failings within the wider system for drug pricing and access. We are determined to address this and are clear that NICE plays a vital advisory role”
•  That there will be fundamental reforms to the way in which we pay for drugs so that we can give effect to our intention that patients can access the drugs that are clinically effective for them; and that the price paid by the NHS reflects value for money
• “That in the meantime PCTs should continue to consider carefully whether there are particular local or individual circumstances that would make it appropriate to fund Nexavar or drugs NICE has been unable to recommend for routine use.” 

What does all this mean?
First, NICE survives with something of an endorsement, despite a politically difficult guidance on sorafenib. Further, NICE will continue to issue guidance free from political interference and will have a key advisory role in the new arrangements. Looks more like a new beginning than the end. But read on.

Second, the reference to the NHS paying a price that reflects value could be read as  suggesting more, not less, use of cost effectiveness. Or it could be rhetoric.  Value based pricing means the price being adjusted down to meet the relevant cost per QALY threshold. The OFT recommendations report of 2007 recommended value based pricing for all drugs purchased by the NHS. Instead a policy of patient access schemes became policy as outlined in the 2009 Pharmaceutical Pricing Regulation Scheme. The pendulum could be swinging back in favour of value based pricing, not least since the most important and ambitious patient access scheme seems to have failed. This is the MS Risk Sharing Scheme, which finally reported in 2009 (http://www.bmj.com/cgi/reprint/339/dec02_1/b4677) that patients treated had done less well than expected but that the price would not be reduced.

Third, much depends on the promised “cancer drugs fund.” It is not clear if this would fund only drugs refused or delayed by NICE or would cover all cancer drugs. The latter would have some advantages in that it could mean that the cost of new expensive drugs of doubtful cost effectiveness would have to be met by savings on other drugs within the cancer fund. In economist speak, the problem would be internalised. Whatever the coverage of the fund, its inevitable problems will have to do with setting its size, including year on year rises, and defining the boundaries to prevent “gaming.” Perhaps the biggest problem would have to do with other diseases wanting similar funds. Why should cancer be special? That debate is only just beginning.    

Fourth, the suggestion that PCTs should “continue to consider carefully” if they should fund Nexavar reads like a strong hint that they should. Since PCTs are to have boards made up of elected patient representatives and local authority appointees, strong hints are likely to be taken very seriously. But if a PCT finds circumstances to override NICE guidance against use of sorafenib, who will fund that decision?  If  this is the role of the cancer drug fund, then that fund is going to face the problems outlined above. And if not, the opportunity cost of funding these cancer drugs will be borne by those other services funded by the PCT.

More generally a tension exists between the continuance of NICE as source of national guidance on one hand and the freedom for PCTs to represent local voices and differences. This is the postcode prescribing debate under another name. That debate seems due another chapter.  

James Raftery is a health economist with several decades experience of the NHS. He is Professor of Health Technology Assessment at Southampton University. A keen ‘NICE-watcher’, he has provided economic input to technical assessment reports for NICE but has never been a member of any of its committees. The opinions expressed here are his personal views. Comments welcomed.