Recent changes to how the NHS evaluates new medicines do not go far enough and are “slowly killing the life science sector in the UK”, a drug company boss has warned.
Johan Kahlstrom, president and managing director of Novartis UK and Ireland, said that the National Institute for Health and Care Excellence (Nice) had not done enough to modernise how it rates the cost effectiveness of new drugs.
Novartis — whose Entresto medication is seen as the gold standard for heart conditions, and whose Kisqali drug dominates the market for early-stage breast cancer treatments — has reduced its UK presence over the past 15 years from seven locations to a solitary site in White City, west London. Its UK headcount has fallen from more than 4,000 to just 1,250 in the same period.
Johan Kahlstrom has rounded on Nice
Bosses at the Swiss company have blamed the cuts on being unable to sell its drugs to the NHS because of strict Nice rules on cost effectiveness, and they have repeatedly labelled the UK “uninvestable”. Kahlstrom attacked Nice for approving less effective medicines and blocking better, more expensive alternatives.
He said: “We used to be a leading nation when it came to access to new innovations. Now we’re falling to number ten in Europe … We are in reality missing out on opportunities to change people’s lives, to reduce the burden on hospitals, to drive better productivity and growth in the economy … That school of thought is part of the problem that is slowly killing the life science sector in the UK.
Nice’s “unwillingness to modernise its approach or update its [cost‑effectiveness] thresholds — unchanged for more than 25 years — is a key reason why the UK is now widely seen as uninvestable from a life sciences perspective.”
• These new drugs are changing lives — the NHS won’t buy them
The medicines watchdog, sponsored by the Department of Health and Social Care, approves drugs by balancing their cost against how many years of high-quality life they provide — a metric known as “quality adjusted life year” (QALY).
Novartis’s corporate centre in Elm Park, Dublin
• NHS patients do get best drugs, watchdog insists in Big Pharma row
Last December, the government announced that Nice cost effectiveness thresholds for drugs will rise in April, for the first time since the independent body was established in 1999. The level will increase from a cost of £20,000 to £30,000 for each year of quality life provided, to between £25,000 and £35,000.
Kahlstrom said that while this was “an important first step”, the thresholds needed to rise further to keep in line with inflation.
However, the chief executive of Nice, Jonathan Benger, has called for a freeze in the cost-effectiveness threshold after the recent rise. He told the Financial Times last month that any further increase would have a “diminishing return” and that the increase to the thresholds would result in only three to five more medicines being approved each year.
Benger noted that if the government spent more on medicines, “they’ve got to pay for that somehow”, meaning a choice would have to be made about cutting other services or raising taxes.
The government plans to double investment in new medicines from 0.3 per cent of gross domestic product to 0.6 per cent of GDP over the next decade, but Kahlstrom said he wanted to see a “clear roadmap” on how to get there.
• Billions more to be spent on medicine as Keir Starmer rips up rules
About 9 per cent of healthcare spending in the UK goes on medicines, down from 11 per cent ten years ago.
Sally Gainsbury, a senior policy analyst at the Nuffield Trust health and social care think tank, said: “The government has already committed to raising the Nice threshold in response to pressures from the US, and has said that will cost an extra £1 billion a year by 2028-29, which appears to be a low-end estimate.
“The government has also said it will not provide extra funding to cover that cost, which means resources will have to be diverted from other forms of care where patients are already waiting too long, such as elective procedures or GP appointments … The evidence shows those forms of care offer patients far greater benefit for each £1 spent than the benefits patients get from expensive new medicines.”
The life sciences sector employs 126,000 people in high skilled jobs and contributes £17.6 billion in direct gross value added annually to the economy, according to data from the Association of the British Pharmaceutical Industry. However, there are concerns within the industry that the life sciences sector is diminishing in the UK as companies such as MSD and Eli Lilly scrapped plans to build research centres in London last year.