My name is Dr David Montgomery, I’m the medical director for Pfizer Oncology in the UK.
I’m here today shooting a video about health economics and as I see you reaching for the off buttons on your screen, I would ask you to hold on a second because this could be the most important video you watch about access to medicines in the current situation in the UK.
I’m going to try and do something that hasn’t been done in public terribly often before, and that is demystify the process by how we approve and assess medicines in the UK.
I’m going to stick with one issue, and that’s the issue of add-on treatments. That’s treatments that are added into current therapy instead of replacing medicines that are available already.
This is often considered a complicated topic, and I guess when you get into the real detail and the nitty-gritty it can be, but at its heart the process for assessing medicines is actually pretty simple.
In the UK we use cost effectiveness, an incremental cost effectiveness radio, which I will come into a little bit later.
This essentially means that we look at the costs of introducing a new medicine compared to the costs of the current treatment regime, and then we look at the difference of effectiveness between those two regimes, and we simply divide one by the other. Cost divided by effectiveness gives you cost effectiveness.
In this video we’ll do a little bit of a discussion of how you work out costs, of course, and we’ll spend a bit of time looking at the difference in effectiveness between two medicines and how we measure that.
To measure incremental cost, in simple terms we have to look at the cost of two different options, and see what the difference is between those.
In the case of NICE, it is looking at the appraisal of medicines and drugs so that we can look at the cost of two different treatment regimens, or two different drugs, and the difference between those. If one treatment is more expensive than another treatment, then it has an incrementally higher cost, and that difference between those two treatments is the incremental cost.
With an add-on therapy, we are no longer looking at the cost of drug B minus the cost of drug A to work out the difference between having a new treatment vs having the old treatment.
As it is an add-on therapy, there are more drugs than just drug B in that regimen; it is given in combination with other drugs as well. As such, the cost of having this new treatment regimen is much higher than just the cost of drug B alone.
The effect, the benefit side of the equation is measured by NICE in health economic modelling using QALYs.
The QALY, an acronym for Quality Adjusted Life Year is a measure of two things.
First of all, quality of life whilst alive, and secondly, the life extension.
Health can be measured on a scale of 0 to 1. 0 being a state like death, and 1 being perfect health. When we appraise medicines using QALYs, we use this scale. The less symptoms and the less disease a patient has, the higher they will score on this scale of 0 to 1.
When we consider the example of an existing treatment, drug A, and a new treatment, drug B, if drug B is a more effective drug, then it can not only improve quality of life whilst alive, but it might also extend life, as well.
Drug B may offer more Quality Adjusted Life Years than drug A, due to those quality of life improvements vs drug A whilst alive, and also the potential life extension.
The difference in QALYs between drug A and drug B and those pathways, is the incremental QALY.
In this way, we have both sides of the equation.:
The incremental cost from introducing a new medicine, and the incremental benefit.
In simple terms, it is the extra cost for the extra benefit, and we can look at how much money it costs to introduce a new drug beyond what we are already paying, but how much benefit we get for that.
So, the cost for benefit, the cost effectiveness. And that difference, and that ratio is the Incremental Cost Effectiveness Ratio, the ICER.
Let’s look at a medicine. It’s an add-on treatment, and it extends progression free survival, the length of time you spend with your tumour controlled in the pre-progressed state by 12 months, if it’s given in addition to current standard of care.
Very often, the overall survival, the time you spend alive is immature at the time you go to NICE, and very often it can be difficult, that can be the contentious bit of working out the overall benefit.
We’ll look at three different scenarios, or three different assumptions of how that 12 months of progression free survival gain translates into overall survival, and we’ll look at 12 months equalling 12 months of overall survival, we’ll look at the overall survival being a bit shorter at 6 months, and we’ll look at an assumption where there is no overall survival gain from that PFS gain.
When a patient is in a state which is progression free, they may have a score of 0.7 on our scale of 0 to 1. When their disease progresses, this will drop, let’s say to 0.5. If a patient dies, the Quality Of Life score drops to 0.
Resultingly, an example where a new drug extends progression free survival time by 12 months, and then overall survival time by 12 months can result in a QALY gain of 0.7 vs the older treatment. This is 0.2 gained from progression free survival, and also 0.5 gained from overall survival.
In this example, a new treatment has provided a 0.7 QALY gain.
NICE have a threshold for incremental cost effectiveness around £30,000 per QALY.
This means that if a new treatment adds an additional QALY onto what the existing treatment can do, NICE would be willing to pay £30,000 extra across a patient’s lifetime to achieve that gain.
This is the cost for the effect, the cost effectiveness.
If NICE are willing to pay around £30,000 for one QALY, they are willing to pay around £21,000 for 0.7 QALYs
If the treatment duration was an average of 24 months, the incremental £21,000 that would be willing to be paid for the extra QALY gain would have to be split over this time.
This would imply an additional cost of £875 would be willing to be paid above what is already paid for treatment.
This cost may include a multitude of things; the new drug cost, but also the administration costs, the monitoring costs, the management costs, the cost of scans, and even the cost of any add-on therapies that are already in that treatment regimen.
If the overall survival gain was halved to only 6 months, this would denote a 0.25 QALY gain.
With 6 months overall survival gain, but retaining the 12 months progression free survival gain, the total QALY score, the incremental QALYs, would be 0.45.
This is 0.25 incremental QALYs from the 6 months overall survival gain, and 0.2 QALYs from the progression free survival gain.
The NICE threshold indicates that for 0.45 QALYs, a £13,500 incremental cost would be willing to be paid.
If there was no evidence of a life expectancy gain and overall survival gain, or the evidence had not matured yet, so that data was not yet available and we relied only on the benefit of the medicine’s progression free survival gain, the total QALY gain would just be the 0.2 from the progression free survival gain.
In this case, completely removing all the QALYs from overall survival would reduce the amount willing to be paid for this new treatment to £6,000.
Split once again over the assumed treatment duration of 24 months, this equates to £250 per month.
It quickly becomes obvious that even if the drug is given away for free, it may not reach the cost effectiveness threshold.
Assuming a treatment duration of 24 months, this implies a cost per month incrementally, above what is already paid for standard treatment of £562.
We hope this has been useful, and not too technical.
It’s incredibly important because we’re at a time where we are making great progress in malignant disease, but increasingly we’re going to see more than one medicine required to control tumours as long as possible, we’re going to see add-on treatments.
This is going to be particularly the case in immuno-oncology as we start to build on the great progress we’ve made so far with single-agent immuno-oncology, and we start to see two and three drug combinations. It’s also going to be important in personalised medicines, as we’ve seen in HER2 positive breast cancer, for example.
We really need to find a solution, we cannot be in a situation where add-on treatments are not available on the NHS, simply because the process we use for assessing those medicines isn’t suitable, and doesn’t allow those medicines to get through.
This is something we are all going to have to work on together.
It’s going to require clinicians, government, NHS England, NHS in all the other devolved nations, Scotland, Ireland and Wales… As well as the pharmaceutical industry and patients and patient groups, and NICE, and the SMC to come together to collaborate to come up with solutions to this problem.
And it’s an urgent, urgent issue.
Job Bag Number: PP-ONC-GBR-0413