The CEA Registry Blog

By CEA Registry Team on 7/16/2014 9:41 AM

By James Chambers, Ph.D. and Cayla Saret, B.A.

To date, there are few studies that examine the overall returns of medical research. A June 2014 paper in BMC Medicine quantified the returns of public and charitable funded cancer research in the UK. Matthew Glover et. al. estimated the benefits of a defined set of cancer-related interventions from 1991-2010. Interventions included prevention, screening, and treatment. In the base case, authors estimated a “substantial” 10.1% internal rate of return (IRR) for these research funds.

Interestingly, a previous work by Litchenberg that investigated the relationship among new cancer-related pharmaceuticals, pharmaceutical costs, and life year gains stated, “Ideally, we would have measured the effects of new cancer drugs on the number of quality adjusted life years (QALYS), but were unable to do so due to lack of data.(1) In their calculations, Glover et. al. used expected QALY gains, valued at £25,000/QALY,(2) to estimate the monetary benefit of improved health outcomes. Doing so allowed the authors to account for improvements not only in life expectancy, but also in quality of life. The greatest proportion of QALY gains derived from reduction in smoking (51%), followed by cervical cancer screening (21%) and breast cancer screening (19%). Interventions related to breast and prostate cancer comprised a large percentage of total net costs.

In this work, the authors seek to further validate a methodology that they used in a 2008 report to examine the returns of research related to cardiovascular disease, in which they found a similar estimated IRR of 9%. The authors do note several important limitations. For example, because only a defined set of interventions for certain cancers were included in the study, all other interventions are assumed to have zero net monetary benefit. However, the true value of excluded interventions may be positive, negative, or zero.

Dr. Jonathan Grant, who led the study by Glover et. al., said in a press release, “This return of 40 pence a year for each pound invested in cancer research includes health benefits equivalent to around 10 pence, plus a further 30 pence, which is the best estimate of the ‘spillover’ effect from research to the wider economy.  An internal rate of return of 40p easily meets the UK Government’s minimum threshold of 3.5 pence per pound for investments, showing that money spent on cancer research is good for the society as a whole, as well as benefitting patients."


     1.     Litchenberg FR: The expanding pharmaceutical arsenal in the war on cancer. NBER Working Paper Series 2004. Paper No. w10328

     2.     The midpoint of the commonly used National Institute for Health and Care Excellence values of £20,000/QALY and £30,000/QALY

By CEA Registry Team on 2/22/2011 9:26 AM

Originally subject to a negative recommendation, the National Institute of Health and Clinical Excellence (NICE) has published draft guidance recommending azacitidine (Vidaza®, Celgene) as a treatment option for sufferers of Myelodysplastic syndromes (MDS) who meet certain conditions. [1]

Myelodysplastic syndromes (MDS) are a group of bone marrow disorders where the sufferer’s bone marrow produces insufficient amounts of one or more types of blood cells.

There are few therapeutic options for MDS sufferers.  In the UK, the majority of patients receive best supportive care, with a smaller proportion receiving low dose chemotherapy. 

Although details of the agreed pricing scheme are not yet in the public domain, it is likely to be similar in format to other patient access schemes – often referred to as ‘risk-sharing schemes’ or ‘performance based arrangements’ – discussed in this blog.  Past patient access schemes have, in essence, offered a rebate for drugs that did not demonstrate a predetermined level of effectiveness.  

Reported to reduce the computed incremental cost-effectiveness ratio (ICER) from £63,000 to £47,020 per QALY, the agreed patient access scheme was sufficient to convince NICE to change their recommendation for azacitidine. [1] [2]  With an ICER greater than NICE’s accepted threshold of £20,000 to £30,000 per QALY, the NICE appraisal committee determined that the treatment met the criteria for being a life-extending and end-of-life treatment.  Thus, in the appraisal additional weight was assigned to the QALY benefits, resulting in the ICER of azacitidine falling within an acceptable range.

The press release included the following quote from Dr Carole Longson, Health Technology Evaluation Centre Director at NICE:

"Azacitidine is the first drug that has been developed specifically for treating myelodysplastic syndromes. It is not a cure, but it does have the potential to extend patients' lives by an average of nine months. It is a very expensive drug, but the manufacturers have submitted a patient access scheme where the cost will be reduced. We are therefore very pleased to be able to recommend azacitidine as a cost effective use of NHS resources." [1]

It is unclear how the implementation of the proposed value-based pricing (VBP) arrangement in 2013 will affect the implementation of similar patient access schemes.  However, it appears that until then such policies remain a viable option for manufacturers. 

- By James D. Chambers

1. Improved patient access scheme allows NICE to recommend azacitidine to treat myelodysplastic syndromes.  National Institute of Health and Clinical Excellence (NICE).  Available: Here

2. Azacitidine for the treatment of myelodysplastic syndromes, chronic myelomonocytic leukaemia and acute myeloid leukaemia. Final appraisal.  National Institute of Health and Clinical Excellence (NICE).  February 2010.  Available: Here


By CEA Registry Team on 12/21/2010 11:40 AM

The future of the QALY has been debated alongside a discussion regarding the future of NICE.  Although changes are likely following the ongoing public comment period, the recently published consultation document on value based pricing (VBP) provides an insight into the future role of the QALY in the UK. (1)

Discussion of the QALY features throughout the document and the measure is proposed as part of a method to measure disease severity, unmet need, and therapeutic innovation and improvement.  Although not explicitly stated, it is clear that a metric that facilitates a comparison of health benefit across different treatments and diseases, such as the QALY, is fundamental to the proposal. 

Although the QALY seems to be the favored metric for health benefit, there is a suggestion that other measures could also be considered.  For example, with respect to assessing disease severity, the proposal states;

“It could be assessed in terms of the existing QALY unit of health benefit – which can be used to quantify the outstanding health loss.” 

Notably, with respect to the pricing mechanism, the proposal states:

“Based on the output of the full assessment of value of a product, expressed as a weighted cost per QALY (or alternative measure) the threshold or maximum price would be determined”

There will likely be much stakeholder input before the policy.  The comment period closes March 17, 2011).

By James D. Chambers

1. A new value-based approach to the pricing of branded medicines - a consultation. Available here

By CEA Registry Team on 12/17/2010 3:54 PM

On 16th December, the Department of Health (DoH) in the UK published an initial consultation on value based pricing (VBP). (1)  The document entitled “A new value-based approach to the pricing of branded medicines: a consultation” provides a detailed description of the proposed policy due to be implemented upon expiry of the current Pharmaceutical Price Regulation Scheme (PPRS) agreement at the end of 2013. 

The first impression upon reading the document is that earlier predictions of the demise of NICE were premature.  Indeed, in the foreword by the Secretary of State for Health it states;

“NICE is a world-leader in its field, and it will continue to have a central role, both in undertaking pharmaco-economic assessments and in providing advice to the NHS on the relative clinical and cost effectiveness of treatments.”

The overarching aim of VBP is to ensure that NHS funds are used in a manner that achieves the greatest possible value for patients.  The specific objectives are stated in the document as follows:

  1. Improve outcomes for patients through better access to effective medicines;
  2. Stimulate innovation and the development of high value treatments;
  3. Improve the process for assessing new medicines, ensuring transparent, predictable and timely decision-making;
  4. Include a wide assessment, alongside clinical effectiveness, of the range of factors through which medicines deliver benefits for patients and society;
  5. Ensure value for money and best use of NHS resources.


The proposal states that the Government will determine the baseline cost-effectiveness threshold and the scope of pharmaco-economic evaluation, including wider factors and the weightings for burden of illness and therapeutic innovation and improvement.  These weightings will be used to determine the baseline cost-effectiveness threshold, to be used to set the maximum price to be paid by the NHS.  Manufacturers will have freedom to propose a price for their new medicine and providing it translated into a figure less than or equal to the “basic cost-effectiveness threshold,” the price would be accepted for the NHS.  If the price translated into a figure greater than the threshold then additional evidence demonstrating that the new medicine merited a higher weighting in terms of burden of illness, therapeutic innovation and improvement, or clinical and wider societal benefits would be required.  In the event that the proposed price remained higher than that justified through the VBP assessment then it would be “the company’s responsibility to explain to the public why it was not prepared to offer that drug at an appropriate price.”

Comments on the proposed policy are to be submitted by 17th March, 2011.

By James D. Chambers

1. A new value-based approach to the pricing of branded medicines - a consultation. Available here

By CEA Registry Team on 12/2/2010 3:48 PM

In recent weeks, the media has highlighted proposed changes to the remit of the UK’s National Institute for Health and Clinical Excellence (NICE) as the UK moves to a system of ‘value-based pricing’ (VBP).

This is not news. Discussions about VBP first arose during the 2009 revision of the Pharmaceutical Price Regulation Scheme (PPRS). Ultimately a half-way house approach was adopted which included patient access schemes and flexible pricing.

What is new is that the UK’s new Coalition Government have signalled a clear intention to move towards VBP when the PPRS is renegotiated in 2013.

VBP will mean the assessments that NICE undertakes can be used to inform the final price of the technology. This already happens in a number of other countries.

NICE was created in 1999 in response to concerns about local NHS variations in drug availability. Consistent uptake of cost-effective new technologies was enabled by the NHS being required to fund NICE’s technology appraisal approved technologies within 3 months. NICE was asked to use the price set by manufacturers to examine incremental cost effectiveness: compared to standard NHS care, how much extra health does the new treatment give the NHS, and at how much extra cost?

NICE was not given the ability to negotiate on price, resulting in some pharmaceuticals being deemed not cost-effective, causing significant controversy.  In reality very few pharmaceuticals are ‘not recommended’ by NICE and when this does happen it is usually because of a lack of evidence of additional benefit.

The details are being discussed but current information suggests that NICE’s assessment of relative clinical effectiveness and ‘value’ of the technology will remain the same. What will change is that the NHS or its agents will be able to use the information to negotiate on price.

This will mean that in future, rather than a ‘not recommended’ decision, the NHS will be able to signal what price a technology would be deemed cost-effective. Current discussions are focusing on the practicalities of who is responsible for the final decision.

By Sarah Garner, Harkness Fellow

By CEA Registry Team on 11/12/2010 4:34 PM

NICE has issued final draft guidance confirming an August ruling that Avastin® (bevacizumab) is not recommended for use in the NHS.  Roche, Avastin’s manufacturer, had submitted new evidence and had proposed a patient access scheme, but neither were sufficient to change NICE’s original ruling. (1)

At an annual cost of £20,800 ($33,550) Avastin®, and with an average survival gain of six weeks, the use of Avastin® was deemed not to represent an efficient use of NHS resources.

As discussed in a previous blog, the Conservative government in the UK has established a “Cancer Fund” of £50 million to allow patients access to expensive chemotherapies such as Avastin®.  However, as noted on the BBC’s report of NICE’s recommendation, at a cost of £20,800 the fund will be insufficient to allow all bowel cancer sufferers (6,500 patients per year) access to the treatment. (2)

The future role of NICE has been hotly debated over recent weeks.  It seems though, at least in the short term, that they will not refrain from making difficult, and controversial, coverage recommendations.

By James D. Chambers

1. U.K. Deals Fresh Blow to Roche. Available: Wall street journal 
2. NICE confirms no NHS funding for cancer drug Avastin. Available: here 

By CEA Registry Team on 11/1/2010 4:38 PM

It has been reported today (11/01) that the National Institute of Health and Clinical Excellence (NICE) in the UK is to lose the power to act as arbiter on the availability of drugs on the National Health Service (NHS). (1)

By CEA Registry Team on 6/3/2010 4:43 PM

In a recent risk-sharing agreement (often referred to as ‘patient access schemes’) NICE has issued a draft recommendation for Iressa® (gefitinib) for use in the NHS. The recommendation is currently open for consultation and the final guidance will be published later this year. Iressa® is a once a day pill indicated for adults with locally advanced or metastatic lung cancer whose tumors have an epidermal growth factor receptor (EGFR) mutation. [1]

By CEA Registry Team on 6/1/2010 11:59 AM

While campaigning prior to the general election in Great Britain last month, David Cameron, who subsequently became Prime Minister, stated that all cancer sufferers should be offered life-extending medicines as long as the drugs have been recently licensed and are prescribed by their physician – whether or not their use is backed by NICE. [1]

By CEA Registry Team on 5/7/2010 4:37 PM

A recent posting on the NICE website is of particular relevance in this post health reform world. Presented are NICE guidelines that are estimated to result in cost savings. (1)

By CEA Registry Team on 4/16/2010 8:08 AM

The recent passing of the health care reform law emphasized just how politically charged the health care debate is. This phenomenon does not appear to be limited to the US.

By CEA Registry Team on 2/25/2010 4:35 PM

On Feb 9th NICE recommended against two therapies indicated for the treatment of chronic myeloid leukemia in patients who are intolerant to imatinib. As it stands, Dasatinib (Bristol-Myers Squibb) and nilotinib (Novartis) will not be available on the NHS.

By CEA Registry Team on 2/4/2010 12:14 PM

On Friday, 29 of January of 2010 the Spanish government decided that price of a drug in the UK and Denmark would no longer influence the price of the same product in Spain[1]. From the pharmaceutical industry's perspective, this move could decrease the importance of the UK's National Institute of Health and Clinical Excellence (NICE) when it comes to negotiations over prices.

By CEA Registry Team on 1/29/2010 3:06 PM

The National Institute of Health and Clinical Excellence (NICE) has reversed a previous decision and has recommended certolizumab pegol (Cimzia) for the treatment or Rheumatoid Arthritis (RA) after the manufacturer (UCB) agreed a ‘patient access scheme’ with the Department of Health (DoH) in the UK.[1]

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