Are expensive drugs worth it? Rolling out new medicines may be too costly to other patients' health

New medicines can be a lifeline for millions of patients – but over two decades in England, public spending on them came with significant trade-offs that indicate the money paid for new drugs may be better used on other health services, a new analysis has found.

Once England’s National Institute for Care and Excellence (NICE) recommends a new drug for patients, the National Health Service (NHS) must pay for it, if it’s prescribed by a doctor.

But with a limited budget, NHS spending on new drugs means other health services won’t be funded – and this isn’t always considered when policymakers and health professionals weigh the cost-effectiveness of new medicines, according to the study in the Lancet medical journal.

With that gap in mind, the researchers from UK and US universities modelled how this trade-off shapes the health of England’s population overall.

"We know patients are deriving benefits from new drugs, but that comes at a cost to others in society who may have to forego access to services because funding has to be reallocated to paying for drugs rather than anything else," Huseyin Naci, an associate professor of health policy at the London School of Economics and the study’s lead author, told Euronews Health.

"They are the invisible people who are losing out as a result of explicitly prioritising the health benefits we get from drugs".

Public spending trade-offs

Other analyses have shown that, on average, it costs about £15,000 (€18,000) to pay for one year of health, a measure known as quality-adjusted life years (QALYs).

The researchers used that figure to estimate the number of healthy years that could essentially be bought with the £75.1 billion (€90.2 billion) the NHS spent on new drugs between 2000 and 2020, if the funding had instead been allocated to other medical services or treatments.

They found the new drugs earned nearly 3.75 million QALYS for about 19.8 million patients – but if that funding had been used for other health services, it could have supported 5 million QALYs.

That’s a net loss of about 1.25 million healthy life years.

The researchers did not link the sacrificed QALYs to any specific medical care, but rather estimated the aggregate health impact, Naci said.

For example, in 2010 NICE recommended the drug trastuzumab for patients with later-stage stomach cancer, estimating that about £43,200 (€51,900) worth of trastuzumab buys one healthy life year.

In the analysis, that translates to 2.88 healthy years lost elsewhere.

A NICE spokesperson acknowledged that spending money on new medicines does displace funding for other health services, but said that the agency only recommends new treatments that "offer value-for-money for the taxpayer".

"Every pound of the NHS budget can only be spent once," the NICE spokesperson said, adding that even if the agency did not recommend the new drugs, they would likely be prescribed for some patients anyway, leading to disparities in access at the local level.

Which drugs are covered

Part of the challenge is that NICE coverage prioritises patients with more serious unmet health needs who could benefit from new medicines, like those with cancer or undergoing end-of-life care. Often, these drugs are more expensive than other treatments, like hip or knee replacements.

Over the 20-year study period, two-thirds of new drug appraisals were for cancer and immunology treatments, while only 8 per cent were for more common vascular issues like stroke or coronary artery disease.

Just 19 per cent of the 183 NICE-recommended new drugs had generic or biosimilar alternatives which are typically cheaper than name-brand medicines, the study found.

Amitava Banerjee, a professor of clinical data science at University College London, said the findings indicate more should be done to encourage drug development for more common diseases to maximise the health benefits of government spending.

When it comes to cancer medicines, policymakers and researchers should “look at the gap between surrogate outcomes such as changes in tumour size on imaging versus long-term impact on reducing mortality and on improving quality of life,” Banerjee said in a statement.

A more holistic view of drug cost-effectiveness

The findings are particularly salient as health systems in the UK and other European countries debate whether they should pay for new blockbuster anti-obesity drugs that may also help patients manage other health conditions.

Health officials have been worried about the long-term budget hit of these medicines, which drugmakers have suggested could be taken for life.

The study authors said that the UK government should consider adjusting how it decides on the cost-effectiveness of new medicines, and could even push to bring down drug costs so they are more in line with other medical services.

However, such a move would likely face fierce opposition from the pharmaceutical industry.

In the meantime, Naci said NICE should be more transparent about the potential consequences of prioritising new drugs over other treatments.

"I suspect the committee members within NICE may reach different decisions if they’re presented with that trade-off," Naci said. 

"We only talk about benefits [of new drugs] as if there are no opportunity costs or unintended consequences of those benefits at the population level".