Posted by: Stephen Williamson29 AUG 2014
Last week saw the announcement of changes to the Cancer Drug Fund (CDF), which provides funding for high cost cancer medicines for patients in England. The fund, which was £200m, has been increased to £280m for this year and next… just as well, as the fund overspent last year by £32m. It also highlighted some important changes to the ways the CDF will work, more of that later.
The CDF was seen as the great solution to accessing high cost cancer medicines, extra money specifically to fund drugs too expensive for the UK’s Health Technology Assessment body, NICE. It’s fair to say that the CDF has worked and improved access in its first three years and funded many new treatments that get turned down by NICE. But one of the great weaknesses of the CDF is it hasn’t taken account of cost, until now. You can speculate that this has led to manufacturers being less concerned at keeping their UK pricing down as the CDF will fund it anyway. Look at the row between Roche and the NHS over its new breast cancer drug, Kadcyla. NICE have said no and patients are disappointed, NICE were not able to agree an acceptable discount with Roche, but the drug is available at full price on the CDF.
NICE said they were unable to say “yes” as the company were not working with them on pricing. NICE’s chief executive Sir Andrew Dillon said: “We are really disappointed that Roche were not able to demonstrate more flexibility. The company is well aware that we could not have recommended Kadcyla at the price it proposed.” This is really strong language for NICE, which usually does not comment when it says “no”. Roche then went on the counter offensive, saying: “We’re very disappointed with this decision and, frankly, not just for patients. NICE’s rejection of Kadcyla demonstrates quite simply that their current system is broken, not fit for purpose.”
Now it just happens this row was between NICE and Roche, but in truth, given the global pricing trends, it could have been any manufacturer with a new expensive cancer drug.
But what are the facts behind the headlines? Kadcyla, is a new version of an existing drug trastuzumab (herceptin) that offers benefit after patients disease has progressed on trastuzumab. It is the original trastuzumab molecule, a biological targeted agent combined with a traditional cytotoxic agent, which is then “delivered” directly to the tumour.
But Kadcyla is not a curative drug, it’s used (for the moment) in patients with advanced breast cancer. The trials show it extends median overall survival by six months. It costs £90,000 for a 14.5-month course of treatment, equivalent to £75,000 a year. This compares to trastuzumab at £21,000 per year. So why is it so much more expensive than the original molecule? The pharmaceutical industry often quotes drug development costs to justify high prices, but have development costs increased so much in ten years?
Development costs are often driven by a need to test many molecules that don’t prove to be successful in search for a winner. In this case you could argue that there were none of these costs as the drug combined existing drugs. Only Roche has answers to this. My view is that it is overpriced and the high price is driven by recent high prices in other cancer drugs. It seems that as soon as the next “most expensive” cancer drug price is accepted, this resets the pricing benchmark and prices just keep spiralling higher.
So coming back to the CDF, you could speculate that manufacturers will be less keen to try to seek agreement on discount prices with NICE if they can have their drug funded in England by the CDF. The NICE rejection has not hurt Roche’s sales in England as the CDF continues to pay the full price. In fact, reaching agreement with NICE could be seen as counter intuitive for Roche because as soon as NICE say “yes” to a discount, the CDF will stop paying full price. The CDF panel has recognised this and part of the changes announced recently mean that they will look more closely at prices of drugs it has approved and will be trying to support NICE in its efforts to encourage more realistic pricing for the UK. There are going to be some interesting discussions at the next CDF panel meetings.