The impact of the government’s drug pricing deal on patient access to new medicines has been thrown into confusion after a pharmaceutical company’s appeal against the decision to ban routine NHS funding of one of its drugs was upheld.

A National Institute of Health and Care Excellence appeals panel found in favour of Roche’s argument that the appraisal of its breast cancer drug Kadcyla had been “procedurally unfair”.

The company claimed that NICE’s appraisal committee had been wrong not to consider the impact of the Pharmaceutical Price Regulation Scheme 2014 when assessing the cost effectiveness of Kadcyla.

An average course of the treatment, which is currently only available through the cancer drugs fund, costs £90,000. NICE assessed the value of the drug to be at least three times less than £50,000 per quality adjusted life year, which is generally regarded as its threshold for approving end of life drugs.

However, Roche argued on appeal that when considering cost effectiveness, the committee should have considered the fact that under the scheme, the pharmaceutical industry had agreed to cap growth in the drugs bill to 0-1.9 per cent a year for the next five years.

It said this had “fundamentally changed” the nature of how NICE should consider cost effectiveness.

The appeal decision, published earlier this month, said the panel had been “persuaded that the PPRS could potentially be relevant” to how NICE appraises cost effectiveness.

NICE, the Department of Health and the Association of British Pharmaceutical Industry had previously insisted Roche’s interpretation of the impact of the deal was wrong.

However, a NICE spokeswoman acknowledged the appeal decision had far reaching implications for the appraisal of all new drugs.

She said the body was still considering the next steps for the appraisal of Kadcyla and was having “conversations” about how the scheme could be considered in all appraisals.

Current appraisals would continue as planned because it was in the best interest of patients to ensure they got access to new medicines as quickly as possible, she said.

However, while the appeals panel concluded the Kadcyla appraisal committee’s position on the scheme was “insufficiently explained” and this was unfair, it stressed it was not ruling out the possibility that NICE could find “on further inquiry” that the scheme was “irrelevant” or “impossible to operationalise”.

Roche general manager Jayson Dallas said the company would be paying in the region of £27m back to the NHS under the the scheme during 2014.

“We believe this scheme is fundamentally relevant to NICE’s assessment of whether a new medicine represents an appropriate use of NHS resources and we are pleased that the NICE appeal panel has recognised this and has upheld our appeal on these grounds.”

In total, 134 companies are signed up to the scheme, covering more than 90 per cent of UK branded medicines. So far industry has paid back £229m to the DH for the first three-quarters of the year.

There has been controversy about how the money is used. The industry has called for it to be spent on improving uptake of new medicines but the DH said it had already been incorporated into the NHS budget for 2014-15.

Paul Catchpole, ABPI’s director of value and access, said: “This appeal illustrates the importance of NICE being transparent about all the factors taken into account in its appraisal decisions. NICE will now need to consider the implications of the appeal outcome for future appraisals.

“The PPRS is designed to allow patients and clinicians better access to the medicines they need, with the cost underwritten by the pharmaceutical industry. We continue to maintain the need for appropriate value assessment within this context.”

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