Paying more for highly specialised technologies: equity or profligacy?

By Jonathan Michaels

The National Institute for Health and Care Excellence (NICE) recently consulted on possible revisions to its processes for health technology evaluation.  An important aspect of the proposed changes related to topic selection criteria for the Highly Specialised Technologies (HST) programme.  This is of great commercial interest as it allows some technologies to command ten times the price that the NHS considers acceptable through its standard appraisal processes for equivalent benefits.

It has been suggested that HST programme is an implementation of the ‘rule of rescue’, bearing high opportunity costs to rescue identifiable individuals at risk of death or serious harm.  NICE rejects the rule of rescue, instead suggesting that the rationale is “to provide fair and equitable access to treatments for patients with serious and severe ultra-rare conditions

NICE recognises that health resources are finite and that there are opportunity costs when resources allocated to one technology are not available for other uses.  It takes a primarily utilitarian approach to distributional justice, basing decisions upon estimates of incremental cost per additional quality-adjusted life year (QALY).  The NICE charter states that it generally accepts technologies at £20,000 to £30,000 per QALY, extending this to £50,000 per QALY for end-of-life treatments and up to £300,000 per QALY for HST.  NICE recognises that the cost-per-QALY alone is not a sufficient ground for decisions, either because the measure of utility (the QALY) does not capture all relevant benefits, or because it has potentially conflicting libertarian or egalitarian objectives (promoting choice, equitable access and reducing health inequalities).

Last year NICE was challenged in the High Court, on behalf of a child with phenylketonuria (PKU), over its decision not to consider a treatment for PKU, sapropterin, through its HST programme.  NICE won the case, primarily because the court agreed that the child was not a member of a distinct group whose treatment was commissioned as a highly specialised service.

Disease and disability can be both a cause and consequence of inequality, so any effective therapy may contribute to equity.  However, it does not seem equitable if the likelihood that a child with a life-limiting disease gains access to effective treatment is based upon commercial and organisational considerations, rather than any characteristics of the patient, the condition, or the risks and benefits of the treatment.  Furthermore, it seems counter-intuitive that effective treatment for one person with a rare condition does more for equity than treating many more people with similar burden of disease due to common conditions.

An argument given for the advantages given to orphan drugs and HST are that they are necessary to promote research and development of treatments for rare conditions.  This appears to reflect the widely held view, recently expressed by Boris Johnson, that scientific innovation is driven by greed.  This does not seem to be borne out by the evidence.   Sapropterin was available to the NHS from Schircks Laboratories for 28 years on a compassionate use / named patient basis.  BioMarin, obtained FDA orphan drug approval for sapropterin in 2007 and Merck Serono obtained EMA approval in 2008, subsequently selling its rights to BioMarin in 2015 for €340 million.  BioMarin withdrew from the appraisal after the court judgement, and was criticised for withdrawing access for existing patients (potentially in contravention of paragraph 34 of the Helsinki Declaration).  BioMarin subsequently re-engaged with NICE and agreed an acceptable discount that allows the drug to be recommended through the standard process (although this lacks transparency as the committee papers are heavily redacted as ‘commercial-in-confidence’).  This is not an isolated example.  BioMarin obtained EMA approval for a new formulation of amifampridine, which had previously been provided for 20 years for compassionate use, resulting in the yearly cost rising from £730 to £29,448.

The most costly drug ever considered by NICE, onasemnogene abeparvovec (Zolgensma), at a list price of nearly £1.8M per dose was largely based upon research by a French not-for-profit using charitable funding, before being developed by AveXis, which subsequently concluded an agreement for the 2007 patent and was subsequently acquired by Novartis.  This has now been used for the first time in the NHS, following acceptance at an undisclosed discounted price.  In such rare conditions, large, randomised trials are unusual, so it is likely that research costs are limited, with FDA approval for onasemnogene abeparvovec based upon less than fifty patients enrolled in observational studies.

Far from being a means to ensure equitable access to treatment for rare conditions, it appears that the special provisions for orphan/ultra-orphan drugs and HST provide a perverse incentive for extended exclusivity to be traded as a commodity for maximum profit. In doing so, large pharmaceutical companies exploit a societal desire to rescue highly identifiable individuals with rare and life-limiting conditions.  These cases suggest that it is exploitation and not innovation that is driven by greed, and highlight the fundamental imbalance in regulatory procedures that favour the identifiable over those disempowered and unidentifiable individuals who bear the opportunity costs of such profligacy.


Author: Jonathan Michaels

Affiliations: School of Health and Related Research, University of Sheffield

Competing interests: None

Social media accounts of post author(s): @JonM_ScHARR

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