WSJ: Britain Stirs Outcry by Weighing Benefits of Drugs Versus Price

Valued Lives

Britain Stirs Outcry by Weighing Benefits of Drugs Versus Price

Government Arm Finds Pills For Alzheimer's Too Costly, Angering Patients, Pfizer
Ms. Dennis, 80, Joins Protest
By JEANNE WHALEN
Staff Reporter of THE WALL STREET JOURNAL
November 22, 2005; Page A1

LONDON -- Millions of patients around the world have taken drugs introduced over the past decade to delay the worsening of Alzheimer's disease. While the drugs offer no cure, studies suggest they work in some patients at least for a while.

But this year, an arm of Britain's government health-care system, relying on some economists' number-crunching, said the benefit isn't worth the cost. It issued a preliminary ruling calling on doctors to stop prescribing the drugs. The ruling highlighted one of the most disputed issues in medicine today. If a treatment helps people, should governments and private insurers pay for it without question? Or should they first measure the benefit against the cost, and only pay if the cost-benefit ratio exceeds some preset standard? The U.S. generally follows the first course. Even the most cost-conscious insurers say they'll pay the price if a drug works and there aren't other options. Britain openly and unapologetically adopts the second course. If a drug or type of surgery costs a lot and helps only a little, it says no.

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Since NICE was founded in 1999 it has reviewed 93 drugs, surgical procedures and other treatments, starting with those it feels are most in need of a rigorous cost-benefit analysis. In eight cases it has called on doctors to stop prescribing treatments because their benefits were judged not to be worth the cost. Rejected treatments include Kineret, a drug from Amgen Inc. for rheumatoid arthritis. In 57 cases it has recommended restricting use of a treatment. It said Eli Lilly & Co.'s Evista should be prescribed only for osteoporosis patients who can't take another class of drugs. In 28 cases NICE encouraged full use of a treatment, even if it costs more. Andrew Dillon, NICE's chief executive, says this demonstrates that the institute's aim isn't to save money but to make spending more effective.

(snip)

For British health authorities, the combination of high cost and apparently limited efficacy made the Alzheimer's drugs a natural target of a detailed investigation by NICE, the institute charged with determining whether drugs are worth the money. NICE had already done a cost-benefit analysis and concluded in January 2001 that the drugs were worth paying for. This time it used different methodology and took into account new clinical-trial data.

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Write to Jeanne Whalen at jeanne.whalen@wsj.com

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http://online.wsj.com/article/SB113262391535503741.html (subscription)

controversial drug.

Does this mean that you can't get it even if you can afford to pay for it yourself or that you can't get it at all?

I had to select only a few paragraphs from a very long story, but here is what it says:

NICE doesn't have the power to force a doctor to prescribe in a certain way. Its decisions are officially just guidance. But in practice, if the institute chooses in December to reject the Alzheimer's drugs, it is likely to choke off prescriptions for new patients across the United Kingdom (except Scotland, which has its own health system). That's because most British doctors are employees of local units of the National Health Service such as Mr. Wadeson's in Liverpool. The local units must keep costs within an annual budget. When NICE says a drug doesn't pass muster, doctors are under pressure to avoid it and let the local funds be used elsewhere.

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I am not familiar with the British system, but I would guess that if you want to go outside the system, you can. Still, if the major buyer will not buy a specific drug, the pharmaceutical houses will stop distributing it there.

Similar to what would happen here if, say, the "blues," or Medicare will choose not to pay for a certain drug.

But expensive. This decision will likely be overturned.

healthy ones.

There is no benefit in treating anyone for any reason past the age of 63 for men and 71 for women.

We can adjust that downwards - if you've ever smoked, live under unusually stressfull conditions, are a blue collar laborer, or ski or jog regularly. The cost / benefit goes away much sooner, so why bother treating people? And if you're not treating people, why bother developing new treatments?

Now let's work backwards from there.

Are these people smoking crack? This is so far beyond insanity it beggars words to describe.

Whoever back this needs to be removed from government and academia promptly - they're not fit to be an authority on anything.

crawl into a corner and wait for The Grim Reaper.

it will have to be rationed.

As the Terri Sciavo showed us, we do not know how to let go, we do not know how to deal with dying and with death. We all want everything to be done for our loved ones, even if all it buys us is a few weeks, or months.

I have heard recently of an 85 year old woman who was smoking all her life, had diabetes, high blood pressure.. the works.

Several months ago she had a heart bypass operation. More like quadruple pass, I suppose. She then came home and a few weeks later she had a stroke that was a result of the operation. She was rushed to the hospital where she lapsed into a coma and died a few days later.

I did not know her well. I was not a close family relative for whom every day that she lived may have been priceless.

Yet, when one realizes how expensive these heart operations are, I am quite certain that under universal health care this would not have been authorized.

This means that for us, the family and friends, there is nothing to do but to watch and wait for our loved one to die. And this is so difficult. Our culture emphasizes our ability to solve problem, to innovate; we praise ingenuity and entrepreneurship. And we do not have the tradition - that develops over generations living under one roof - to just accept death as integral part of life.

This is why we rush or loved ones to a hospital, hook them to machines and tubes, to know that we are doing everything that we can.

I don't know what the answer is. I certainly would not want to end my life this way and we both signed the appropriate legal documents. But I cannot tell others how to react, how to behave.

Sooner or later, however, with the baby boomers ballooning the number of critical and terminal patients, we are going to be faced with such questions.

As for the specifics, above, again, I don't know how it is in Britain. I know that if an Alzheimer's drug can delay the deterioration, and thus delay the need to transfer the patient to a nursing home, this, alone, would save money. A lot.

It's not a question of "can we get more tax money out of people", it's "given a limited amount of tax money available for drugs for the whole population, which ones do we use to get the most effect?"

This is a situation extremely likely to happen with a tax-funded drug system. Someone has to decide how much money can be spent. A private insurer would have to do the same thing. The questions are how much you spend, and the balance of treatments. The theory behind it is inevitable, and common. It's not 'insane'.

:P

Let's use real examples. In Texas people who can be qualified as medical insurance high risk and cannot get medical insurance anywhere else are placed in a high risk pool.

The risk pool insurance costs the client roughly double the costliest private insurance, and there is a 1.5 year long waiting list to get on the program.

Some "risk" categories, such as a cancer relapse are relatively cheaper to insure than chronic treatment for people with HIV/AIDS. The government doesn't allocate more money annually (keeps level commitment) although the risk pool grows because deregulation in the insurance industry allows insurers to basically only insure people for preventative and emergency treatment and to remove pre-existing and chronic treatment (insurance loss) patients from their insurance pools. Less pay out means more profit means more people in risk pools, for sillier and sillier things, such as a hernia operation within the last five years.

Back to point: if the risk pool insurence industry sees that it is more cost effective to insure five year hernias than AIDS patients, then with that limited pool it makes a decision to abandon people who live normal lives with AIDS medicine over insuring people that they won't have to actually pay for much, if anything, in treatment.

What you've said is wrong. I'm not misunderstanding it - I'm judging it. People with HIV/AIDS would certainly die without medicine, and live normal lives with it, but the cost of one HIV patient can support 5 or more non HIV chronic patients of nearly any other disease. The limited resource pool means that letting every one person with HIV die will allow five other people without HIV to get their arthritis, statins and heartburn pills.

I have a problem with that. It's not acceptable and I could lecture at length on what can be done to fix such a system besides blindly reducing support based on available resources. It's not the first or even an acceptable human solution, but it certainly IS the best solution of economists and accountants. That's why we don't let them run the world.

which the government increases taxes for automatically the next year? If doctors are told 'prescribe anything you want, central taxes are guaranteed to provide it', then I think we'll spend a lot on drugs - to the huge delight of the pharmaceutical companies, who will really ramp up their marketing efforts. Many doctors will resist them, but many others will end up prescribing whatever the drug reps push at them - if they've been told the NHS is willing to pay for any drug at all, they won't feel guilt at it.

I can't think of any other area of public expenditure where people are told "expense is no object - order anything your want". It would also undermine the strategy of negotiating reasonable prices with the drug firms - if the firms know the NHS says "we'll pay any price for an available drug", then the firms will demand high prices. If they know that the NHS balances the effectiveness of the drug against its price, then there's pressure on the firms to take a reasonable negotiating position.

So you are advocating killing off productive people because they are more expensive to treat than five retired unproductive people? I don't mean to put words in your mouth, but that is one conclusion that I could draw. We have to not be passive in our approach as a society, and particularly as an aging society.

Here's the deal.

If you want cheap medicine then regulate the cost of medicine and treatment. Don't just blindly pay for it. Pharma and the medical profession DOES NOT have an indefinite right to profit at the expense of human life, and the government needs to take strong sides on this. The side of the individual is FAR MORE important than a .50 cent dividend on somebody's pharma portfolio. I'm not a socialist by any means, but we do need regulation. You cannot have the people least able to afford to pay be charged the most because of silo pricing strategies employed by pharma. We need to regulate how those products are priced to the market, just like we regulate fuel (for the most part), drinking water and transportation.

It's where our values are as a society. Administrators do not make medical decisions, ever, period, in my value system. Medical decisions are the exclusive provenance of doctors and patients. Some decisions are impractical, but it is up to the doctor to explain why, rather than some authoritarian body of accountants and economists to set the formulary.

Any economist can tell you that pharma will find a way to profit regardless, but it will have to learn to do so using different strategies than the low hanging fruit of raping the patient, HMO and insurance agency.

The NHS currently negotiates the prices it pays for drugs with the drug firms, based on the cost of development and production, with allowances for R&D and profit. I think saying "we'll pay for any drug a doctor prescribes, no matter how marginal its benefit, or how much it costs" would encourage the drug firms to push for higher profits from drugs in the scheme, or to remove their drugs from the scheme and set the prices themselves. But the main effect would be overprescribing of drugs - if the official national policy is "price is no problem", doctors will prescibe just to get a patient to go away - when other treatment might be more suitable. This will cost us all a lot of money.

This isn't about "the people least able to afford to pay be(ing) charged the most" - it's about whether central taxation (in which the rich do pay more than the poor) should ever put a limit on the public drug budget. I say a limit is inevitable - just as a limit is placed on education spending, state pension amounts, and other things our taxes buy. Like those areas, health spending is set by the government, who are subject to our votes. That limit then implies judgements have to be made by doctors which patients get the spending. NICE's recommendations then either say "a patient is guaranteed to get this treatment for this condition", or "the treatment isn't recommended - only prescribe it if your budget can afford it".

Obviously you were putting words in my mouth - you are the one talking about killing productive people versus treating retired people, and I have never expressed an opinion on that - I expressly said this is not about the productivity of the patients.

my apologies for provoking - we're actually concerned with the same outcome; that people who need treatment receive it.

The difference in my view is that finance managers and accountants are setting the standards for what is effective, not doctors.

This concept inherently bothers me:

"The NHS currently negotiates the prices it pays for drugs with the drug firms, based on the cost of development and production, with allowances for R&D and profit.

The problem muriel-v is that it costs bajillions of dollars to develop an effective cure, and then the highly specialized non-cross-contam production facilities for a treatment for a marginal disease, and if the few people who suffer from that disease have to absorb the entire cost of that development through such a negotiation, then you've created a darwinian pressure not to develop new formularies for unpopular diseases specifically because they won't be profit-sustainable.

Nobody except pharma tries to run a cost center exclusively through a revenue target, and the only reason they do that is because insurance and government purchasing blindly go along with the idea that a drug line must pay for itself exclusively among the people that require it. It is VERY profitable to the pharmaceutical industry to have insurers pick up the price differential rather than leveling cost across the entire formulary. If we make it less profitable to build targeted pricing strategies, they will level their costs across a wider range of products and the cost of insuring for those treatments drops across the board. The insurance companies are not pushing hard enough to make this happen, and pharma is buying and writing legislation to prevent it from happening.

Big pharma is more than willing to help you determine what your budget is by artificially pricing treatments in different tiers depending where they are in the patent continuation process. They are not your friend, and they shouldn't inadvertantly be making medical decisions for you using pricing strategies that don't really take "treatment effectiveness" into account.

and, to be honest, I can't work out from the Price Regulation Scheme exactly how they apportion the R&D costs to individual drugs, but I think they either get an audited cost of production and R&D for all of the company's drugs, or assume a percentage of the transfer prices from overseas, if that information is confidential, and work out a 'target profit' for each company. The greater the number of useful types of drugs that a company produces, the greater its profit is allowed to be; the company then sets the price of any new drug to achieve the profit with the predicted sales (if the profits get too high, the price is forced down; if the profits are too low, the firm can increase prices). So there is some incentive to develop drugs for less common conditions, since each drug increases the profit the company is allowed to make. How effective that is in practice I have no idea.

I still say that setting an overall budget for drug costs, and telling the doctors which drugs are considered 'good value', and thus must be allowed for in the budget, while others can only be used if the doctors think they can fit them within the budget, is better than saying "whatever a doctor prescribes, we'll pay for it".

and we're here to help. ;-)