Pharma’s new ‘sensible pricing’ behind cancer drug approvals, says NICE

A string of ‘yes’ decisions from NICE on cancer drugs – but what has changed?

After years of a deadlock between NICE and the pharmaceutical industry on cancer drugs, recent months have seen a wave of positive approvals from the cost-effectiveness watchdog.

But is this a significant shift in pharma pricing policy? Many companies are probably being persuaded to cut prices for older drugs, with the hope of creating ‘headroom’ for a rush of newer medicines.

Following a decision to reform the CDF earlier this year, England’s cost effectiveness watchdog began to reappraise, or appraise for the first time, most drugs currently in the CDF in April 2016.

NICE has been re-appraising 31 existing cancer drugs over the last few months, and today announced 9 out of 11 reviewed so far have been recommended.

The list of 31 drugs must now either gain NICE approved or be removed from the CDF and have all funding taken away.

NICE says price cuts offered by companies on these cancer medicines are the prime reason why it has been able to say yes to so many.

Sir Andrew Dillon

Sir Andrew Dillon

Welcoming the shift, NICE’s chief executive Sir Andrew Dillon also acknowledged better data in some cases, but the emphasis on pricing was clear.

“Sensible pricing and in some cases better data, is helping to secure access to important cancer medicines as they move out of the old Cancer Drugs Fund, following reappraisal by NICE,” said Dillon

“As reappraised drugs now move to routine commissioning, funding in the CDF can be freed up and used for newer, innovative cancer treatments. This is good news all round for patients.”

NICE and the pharmaceutical industry have been at loggerheads for years over cost-effectiveness of cancer drugs, but now pharma companies look to be offering deeper discounts in order to gain market access.

One of the latest examples is Bristol-Myers Squibb’s chronic myeloid leukaemia drug Sprycel (dasatinib).  As part of its reappraisals of Sprycel in two CML indications, BMS submitted a revised discount, which meant that NICE could recommend the drug for use in the NHS for both patient populations. Around 700 patients will be eligible for treatment with the drug per year.

This decision brings the total of approved reappraised CDF treatments to seven: Bosulif (CLL) Afinitor (breast cancer) Xalkori (NSCLC) Sprycel (two CML indications) Alimta (NSCLC) Xofigo (prostate cancer).

Erbitux in head and neck cancer and Nexavar in hepatocellular carcinoma are the two currently slated for rejection in the process – though further discount from their manufacturers could sway NICE on these as well.

Pharma still wants NICE reform

However this new ‘sensible approach’ to pricing doesn’t mean pharma is happy with the NICE process. Indeed reform of NICE’s core appraisal methodology remains a key industry demand.

But pharma companies operating in oncology know that a wave of new drugs are being launched, and both sides want to move on to tackling this new generation – which are high cost drugs.

These include flagship immunotherapy treatments, Merck’s Keytruda and BMS’ Opdivo. Both of these drugs may soon end up in the new ‘managed access’ Cancer Drugs Fund for use in non-small cell lung cancer (NSCLC).

The CDF budget has been fixed at £340 million, and once this limit has been reached, no new drugs will be admitted. Faced with a new generation of drugs being blocked from England’s market, pharma companies are settling for access for established drug at lower prices.

This battle reflects similar negotiations going on in developed markets around the world over cancer drugs. In Japan, the government has just announced that a 50% price cut will be imposed from February 2017 on BMS’s Opdivo – a response to its growing use in melanoma and NSCLC.

GSK’s chief executive Sir Andrew Witty this week urged the industry to follow his company’s strategy of focusing on volume rather than price. He made this recommendation particularly in light of growing pressure on US prices, where heavy discounting is also now becoming a fact of life for pharma.