Bloomberg News

Drugmakers Discount in U.K. Up to 50%, NICE Chairman Says

December 06, 2012

Pharmaceutical companies have dropped prices by as much as half to convince the body that advises the U.K. health system that their products help patients enough to justify the cost, the agency’s chairman said.

Companies have offered the state-run National Health Service “commercially confidential” price cuts when the National Institute for Health and Clinical Excellence has considered whether their medicines are cost-effective, NICE Chairman Michael Rawlins said in an interview. The number of treatments discounted in the past few years is in the double- digits, he said.

“We’ve had discounts up to 50 percent,” Rawlins said yesterday in an interview. “It does mean patients are getting access to medicines.”

Rawlins, 71, is leaving his post in March after 14 years. He defended the agency against industry criticism that it slows or blocks NHS patients’ access to new medicines. He said NICE had spurred companies to increase that access, beginning with Johnson & Johnson’s (JNJ:US) Velcade for blood cancer.

In 2007, the New Brunswick, New Jersey-based company said it would pay back the government for people who didn’t benefit from Velcade after NICE rejected it. Other companies have since struck deals offering their medicines at lower prices to the U.K., enabling them to pass NICE’s cost-effectiveness tests, Rawlins said. He declined to specify the amounts, citing commercial confidentiality.

Drugmaker Discounts

Bristol-Myers Squibb Co. is the most recent company to offer a discount to win NICE’s backing. The agency today issued draft guidance recommending the New York-based drugmaker’s Orencia for some patients with rheumatoid arthritis, reversing a 2011 rejection. At least five other companies this year have offered discounts to the NHS while NICE considered their products, according to press releases issued by the agency. The amounts of the discounts weren’t disclosed.

“In many ways, NICE probably increases access for patients to medicines,” Rawlins said.

NICE rejects about 40 percent of the medicines it appraises, according to the Association of the British Pharmaceutical Industry.

“To add to these problems, once medicines are recommended for use in the NHS and deemed cost-effective, they are still very often not used by clinicians at a local level,” the trade group’s chief executive, Stephen Whitehead, said in a statement.

Drug Delays

Rawlins disputed some drugmakers’ claims that NICE’s assessment process causes lengthy delays in drugs that have gained European Medicines Agency safety approval becoming available in the U.K. NICE’s deliberations add about four to six months to the process, he said.

Blame for further delays lies with NHS hospitals, he said. Some flout a provision in the health system’s constitution requiring them to provide NICE-approved treatments within 90 days of a ruling, Rawlins said. NHS Chief Executive Officer David Nicholson will require hospitals to publish lists of the drugs they provide from April 1, Rawlins said.

The move is the latest toward greater transparency in drug regulation. The EMA has said it would begin publishing meeting agendas and would make more data available to the public.

EMA meetings aren’t in public, Rawlins said. “I think they should be.”

NICE’s advisory committee meetings are open, with some evidence presented privately when patient or commercial confidentiality is involved. Final decisions are made privately and announced publicly because they can affect companies’ share prices, Rawlins said.

Value-Based

He doesn’t expect drastic changes from the new “value- based” pricing system that will replace the U.K.’s previous program and said he hopes that it doesn’t expand the amount of data that drugmakers have to produce. The Department of Health and industry representatives are negotiating the terms of the new pricing system.

Rawlins became president of the Royal Society of Medicine, a part-time post, in July and said he hasn’t decided what else he will do after leaving NICE. He joined after serving as chairman of the now-defunct Committee on Safety of Medicines for five years and also taught at the University of Newcastle-upon- Tyne for 33 years.

His successor, whose name hasn’t been announced, will need to have thick skin and to continue generating enthusiasm in NICE’s staff and independent advisers, he said. His first tasks when the agency was formed in 1999 were to open a bank account and hire a chief executive, Andrew Dillon.

Early Years

In NICE’s early years, Rawlins spent time explaining its role to NHS doctors and their professional bodies. Most were receptive, he said. Pharmaceutical executives tended to be “uncertain” about NICE, he said.

“As one of them said, ‘you’re not what we want’,” Rawlins said.

He said he is proud that NICE bases its decisions on “rigorous analysis of the data” and that its rulings are made by independent experts drawn from the NHS, not by him, the board or staff members. He said the agency has striven to be open and inclusive of different opinions.

“I want people to have their say,” Rawlins said. “They can’t always have their way.”


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