Unhappy pills

Manufacturers of cancer drugs cannot expect to keep charging more for them without paying a price themselves

With a limited budget, the NHS cannot meet every demand – and new demands keep arising. As accident and emergency departments face unprecedented pressures, despite the relatively mild winter and an emergency cash injection from the Government, they suck resources from other parts of the service which, sooner or later, feel the squeeze. This week it is the turn of the cancer services.

Cancer is an emotive issue. The diagnosis always comes as a shock. So when the National Institute for Health and Care Excellence (Nice) rules that a new cancer drug may not be provided on the NHS because it is too expensive, it invariably causes heartache and makes headlines.

In August, the pharmaceutical company Roche became embroiled in a bitter public row with Nice over the £90,000 price tag for its breast cancer drug, Kadcyla, claimed to extend the lives of terminally ill patients by six months but which was deemed too costly. This is not good for patients and it is not good for the NHS.

That is why the Cancer Drugs Fund was set up in 2010 – to provide stopgap funding for new drugs and those rejected by Nice (where they were prescribed by a cancer specialist for an individual patient) to take the political heat out of the issue. In bypassing Nice it bypassed the principles of fairness and value for money on which Nice was founded, and has been roundly criticised for doing so.

For a while, however, it worked. It defused what would otherwise have been an increasingly desperate situation in which some patients were told they could not have the drugs their cancer specialist had recommended.

But now the Cancer Drugs Fund itself has run out of money, after its annual budget was increased from £200m to £280m. Yesterday it announced which of the most expensive drugs it would cease to pay for. The pharmaceutical companies, which were informed of the decisions affecting their own drugs last week, reacted with predictable fury.

They are, however, the authors of their own demise, at least in part. Cancer drug prices have been rising at four times the rate of inflation. The cost of new cancer drugs more than doubled between 2000 and 2010, to $5,000 (£3,300) a month, according to a US study. Globally, spending on cancer drugs has risen by 160 per cent since 2003, almost double the rise in the total drug market, to $91bn. The respected US Institute of Medicine concluded earlier this year that, in addition to the high cost of developing new agents, the sharp rise in costs was due to pricing practices, reduced competition, shortage of generics, and reimbursement incentives.

The urgent imperative for the NHS over the next five years and beyond is to ensure that maximum value is extracted from every pound spent. One example is the deal struck with pharmaceutical manufacturers under which they will refund the cost of drug treatment where it fails to have the expected impact. The makers of two drugs – bortezomib for the blood cancer myeloma (£9,000 to £25,000 per patient) and cetuximab for bowel cancer (up to £19,000) – have agreed to refunds for patients who do not respond.

More manufacturers must follow their example. The scale of the challenge is daunting. Latest figures show that there were 331,000 new cases of cancer diagnosed in 2011 in the UK, up by 23 per cent among men and 43 per cent among women since the mid-1970s. The bill for treating them was put at £5.6bn by an Oxford University study published in 2012, and it is projected to rise by more than half over the next decade.

As demand grows on health budgets and the toll from cancer rises, it is vital that we ensure the money available is spent to the best effect.