NICE recently completed their appraisal of the hepatitis C drug sofosbuvir. However, as has been reported in the media, NHS England will not be complying with the guidance within the normal time period.
The cost of a 24 week course of sofosbuvir is almost £70,000. Around 160,000 people are chronically infected with the hepatitis C virus in England, so that adds up to a fair chunk of the NHS budget. Yet the drug does appear to be cost-effective. ICERs differ for different patient groups, but for most scenarios the ICER is below £30,000 per QALY. In the NICE documentation, a number of reasons are listed for NHS England’s decision. But what they ultimately boil down to – it seems – is affordability.
The problem is that NICE doesn’t account for affordability in its guidance. One need only consider that the threshold has remained unchanged for over a decade to see that this is true. How to solve this problem really depends on what we believe the job of NICE should be. Should it be NICE’s job to consider what should and shouldn’t be purchased within the existing health budget? Or, rather, should it be NICE’s job simply to figure out what is ‘worth it’ to society, regardless of affordability? This isn’t the first time that an NHS organisation has appealed against a NICE decision in some way. Surely, it won’t be the last. These instances represent a failure in the system, not least on grounds of accountability for reasonableness. Here I’d like to suggest that NICE has 3 options for dealing with this problem; one easy, one hard and one harder.
The easy option
The simplest option involves the fewest changes to the NICE process. Indeed, it would involve doing pretty much what it does now, only with slightly different (and more transparent) reasoning. In this scenario NICE would explicitly ignore the problem of affordability. Its remit would cease to be the consideration of optimality on a national level and it would ignore the budget constraint. NICE’s remit would become figuring out which health technologies are ‘worth it'; i.e. would the public be willing to purchase a given technology with a given health benefit at a given cost. To some extent, therefore, NICE would become a threshold-setter. The threshold should be based on some definition of a social value of a QALY. This is the easy option for NICE as setting the threshold would be the only additional task to what they currently do. Its threshold might not change all that much, or may be a little higher.
However, even if NICE denies responsibility, clearly someone does need to take account of affordability. Given the events associated with sofosbuvir it seems that this could become the work of NHS England. NHS England could use a threshold based on the budget and current QALY-productivity in the NHS. One might expect NHS England to be in a better position to identify the local evidence necessary to determine appropriate thresholds, which would likely be much lower than NICE’s. It would also be responsible for disinvestment decisions. Given the nationwide remit of NHS England, this would still prevent postcode lotteries. The implication here, of course, is that NICE and NHS England might use different thresholds. Any number of decision rules could be used to determine the result for technologies falling between the two. Maybe this is where considerations for innovation or non-health-related equity concerns belong. It seems probable to me that NICE’s threshold would be higher than NHS England’s, in which case NICE would effectively be advising increases in the health budget. This is something that I quite like the sound of.
The hard option
Personally, I believe that NICE’s failure to justify their threshold(s) is quite a serious failing and undermines the enterprise. The hard option will involve them defining it properly, informed by current levels of QALY-productivity in the NHS. Thus properly adopting a position as a threshold-searcher, and doing the job prescribed to NHS England in the ‘easy option’. NICE guidance would therefore be informed by the current health budget and affordability, and therefore must include guidance on disinvestment. The first stage of this work has already been done. The disinvestment guidance would be the hard part. This argument has already been much discussed, and seems to be what many economists support.
I don’t find this argument entirely compelling, at least not as a solution to the affordability problem. To solve this issue NICE would need to regularly review the current threshold and revise it in light of current productivity and the prevailing health budget. It has no experience of doing this. I believe the task could be more effectively carried out by commissioning organisations (such as NHS England), who are in a better position to oversee the collection of the appropriate data and would have a public responsibility to do so. It might also be politically useful if decisions about affordability were made independently of decisions about value.
The harder option
The harder option is for there to be a paradigm shift in the way NICE – and health economics more generally – operates. It could involve programme budgeting and marginal analysis, or the Birch and Gafni approach. This might just be the best option, but it seems unlikely to happen nationally any time soon.
It’s possible that more cost-effective but unaffordable drugs are in the pipeline. Failure to address the affordability problem soon could seriously undermine NICE.