Playing NICE: The Case for More Efficient Development

Roche recently received the disappointing news that their melanoma drug Zeloraf has been turned down for the second time by UK’s National Institute for Health and Clinical Excellence (NICE).  While financial details of Roche’s proposal are not known, the list price of $2,700 per week provides a clue.  NICE also rejected Avastin for breast cancer, and, as Tracy Station, noted,

NICE has been less-than accommodating to the latest cancer drugs. Treatments that, like Zelboraf, are directed toward a subgroup of patients tend to be more expensive than older drugs. But cancer therapies in general have grown pricier; consider Dendreon’s Provenge treatment for prostate cancer at $93,000. Bristol-Myers’ new melanoma drug Yervoy–which isn’t a targeted treatment, either–was priced in the U.S. at more than $120,000 per patient, and it, too, got stonewalled by NICE.

These lessons were emphasized by the current Newsweek article, How Much Would You Pay for Three More Months of Life? The conclusion: “There’s no such thing as a cancer drug coming on the market that is some sore of regular drug price. They’re all prices at spectacularly high levels.”

Both focus on a central incongruity of development: you can’t spend a huge amount of money in development, even in critical areas such as oncology, and then expect payers to cough up whatever you demand. Increasingly, this conflict of high pricing and acceptability reflects the mounting health care burden that all recognize as unsustainable.

Oncology isn’t the only area where this is an issue. The entire blockbuster model is increasingly fragmenting towards an orphan-based research model. This means researching and developing drugs which have far smaller patient populations and – more importantly – far smaller revenue opportunities. So what’s the solution to this?

You have to become more efficient.

Big pharma cannot pursue the battleship model of big, expensive, trials to get to approval, then hope to recoup costs by astronomical costs. The US, one of the richest nations in the world as measured by per capita income, only 8% of the population makes more than the $100,000 that newer targeted oncology products sell for.

Greater efficiency is possible. It means that the industry is being forced to re-examine its entire business model, which I see as a favorable development and one that is necessary for change—which is good for us all, whether consumers, regulators, and yes, even the industry itself.

Share Button

Leave a Reply

  • (will not be published)