Abiraterone, the new drug that extends the lives of people with advanced prostate cancer by three months, has been approved by the National Institute for Health and Clinical Excellence (NICE). This follows an earlier rejection by the drug approval body for the National Health Service, on the basis that it was not cost-effective for the NHS, given the value for money that it brought. NICE claims that it has now seen more evidence of the benefits provided by the drug. But tellingly there has also been a reduction in the price charged to the NHS by Janssen, the drug manufacturer.
Paul Gershlick, a Partner and Head of Pharmaceuticals and Life Sciences at Matthew Arnold & Baldwin LLP, welcomed the decision but raised a warning: “This is fantastic news for people with prostate cancer and their families. It is also seemingly good news for the NHS.
“However, at what price? There is much concern in the industry that as costs of bringing new drugs to market are increasing, the price they can charge is falling as pressures are increased on NHS budgets to obtain more for less. In particular, there is concern over the QIPP Agenda, in which the Department of Health has to find billions of savings to obtain better value, and value based pricing – the new pricing regime about which there is currently not much certainty. If people who invest in research and development in bringing new drugs to market are not sufficiently incentivised to make the profits that ultimately reward their investment and associated risks, we could all suffer in the long-term. It is important that new drugs are valued appropriately to incentivise the new wave of drugs.”