UK drugs sector goes to court over NHS price limits

The UK drugs industry is going to court in an attempt to stop the country’s taxpayer-funded National Health Service from imposing new limits on the price it will pay for medicines.

The highly unusual action comes amid fears that a crackdown introduced in April may prevent patients from securing cutting-edge medicines for the most serious diseases, while intensifying concerns about a post-Brexit investment slump in Britain’s lucrative life sciences industry.

The Association of the British Pharmaceutical Industry said that it had applied for judicial review of a decision by NHS England and the National Institute for Health and Clinical Excellence (Nice) , that medicines would no longer automatically be funded if they were set to cost the NHS more than £20 million a year in any of their first three years of use.

The other aspect of the changes concerns drugs for very rare diseases, which often affect children. In future they will face a higher bar, in demonstrating that they will extend patients’ quality of life.

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Nice, which determines whether any new medicine is sufficiently cost-effective to be offered on the NHS, has estimated that this will affect about one in five of the new medicines that the pharma industry produces each year. It is likely to have an impact on the majority of big global pharma companies.

According to QuintilesIMS, a provider of commercial data on the pharmaceutical industry, if the rule had been introduced from September 2012, 24 new drugs would have seen access curbed. These span a range of therapy areas and many are groundbreaking or life-changing medicines, from MSD’s cancer immunotherapy Keytruda, to Gilead’s hepatitis C drug Sovaldi and Vertex’s cystic fibrosis drug Kalydeco.

The backdrop to the changes is the most severe deficit in the history of the NHS, which is forcing the health service to find ways to cut costs. At around 10 per cent of overall spending, the UK health service already spends relatively little on drugs, compared with some large health systems.

Anita Charlesworth, director of research and economics at the Health Foundation charity, and a former Treasury official, said the move amounted to “overt rationing on affordability grounds”.

Earlier this year, Sir Andrew Dillon, chief executive of Nice, said the proposals were designed to “address the challenge of providing faster access to innovative, cost-effective treatments alongside the need to safeguard the future financial sustainability of the NHS”.

Richard Torbett, executive director at the ABPI, told the FT on Monday: “This is not a debate about whether the price is too high. These are medicines for which Nice has given the stamp of approval of cost effectiveness.

“It fundamentally crosses a line to not grant mandatory funding for Nice-approved medicines,” he added. “This has been a part of the Nice regulations for many years and indeed is [a right enshrined in] the NHS constitution.”

The NHS did not immediately respond to comment.

- Copyright the Financial Times Ltd