You must remember this ...

  • by: |
  • 11/22/2005

An article from today’s WSJ that spells out in very stark terms the different social contracts at play in the UK and the US.

Britain Stirs Outcry by Weighing
Benefits of Drugs Versus Price

Government Arm Finds Pills
For Alzheimer’s Too Costly,
Angering Patients, Pfizer
Ms. Dennis, 80, Joins Protest

November 22, 2005; Page A1

LONDON — Millions of patients around the world have taken drugs introduced over the past decade to delay the worsening of Alzheimer’s disease. While the drugs offer no cure, studies suggest they work in some patients at least for a while.

But this year, an arm of Britain’s government health-care system, relying on some economists’ number-crunching, said the benefit isn’t worth the cost. It issued a preliminary ruling calling on doctors to stop prescribing the drugs.

The ruling highlighted one of the most disputed issues in medicine today. If a treatment helps people, should governments and private insurers pay for it without question? Or should they first measure the benefit against the cost, and only pay if the cost-benefit ratio exceeds some preset standard?

The U.S. generally follows the first course. Even the most cost-conscious insurers say they’ll pay the price if a drug works and there aren’t other options. Britain openly and unapologetically adopts the second course. If a drug or type of surgery costs a lot and helps only a little, it says no.

“There is not a bottomless pit of resources,” says Phil Wadeson, finance director for the National Health Service unit that oversees hospitals and doctors’ offices in Liverpool. “We reached the point a while ago where there is far more medical intervention available than any health-care system can afford.”

The decision on the Alzheimer’s drugs has sparked protests from pharmaceutical companies including Pfizer Inc. and Eisai Co., which co-market the leading Alzheimer’s drug, Aricept. They say Britain is using a flawed economic model and will end up spending more on nursing-home care. More than 8,000 patients and caregivers sent angry letters to the National Institute for Health and Clinical Excellence, or NICE, which made the cost-benefit analysis.

NICE “has this strange mathematical formula they put heaven knows how many numbers into and out comes: ‘Yes, it’s affordable,’ or ‘No, it isn’t,’ ” says Antony Dennis, a Web-site designer in the village of Ramsbury whose mother takes Aricept. “Things like the relationship my mum has with her grandson are probably not easy to put into that formula.”

NICE’s decision, first announced in March and reaffirmed in June, applies only to new Alzheimer’s patients and isn’t final. Following the protests, the institute set a meeting for next month at which drug makers will try to show that the Alzheimer’s drugs are cost-effective in at least some patient groups. Until then a previous directive from January 2001 that recommended the drugs remains in force.

NICE doesn’t have the power to force a doctor to prescribe in a certain way. Its decisions are officially just guidance. But in practice, if the institute chooses in December to reject the Alzheimer’s drugs, it is likely to choke off prescriptions for new patients across the United Kingdom (except Scotland, which has its own health system). That’s because most British doctors are employees of local units of the National Health Service such as Mr. Wadeson’s in Liverpool. The local units must keep costs within an annual budget. When NICE says a drug doesn’t pass muster, doctors are under pressure to avoid it and let the local funds be used elsewhere.

Since NICE was founded in 1999 it has reviewed 93 drugs, surgical procedures and other treatments, starting with those it feels are most in need of a rigorous cost-benefit analysis. In eight cases it has called on doctors to stop prescribing treatments because their benefits were judged not to be worth the cost. Rejected treatments include Kineret, a drug from Amgen Inc. for rheumatoid arthritis. In 57 cases it has recommended restricting use of a treatment. It said Eli Lilly & Co.’s Evista should be prescribed only for osteoporosis patients who can’t take another class of drugs.

In 28 cases NICE encouraged full use of a treatment, even if it costs more. Andrew Dillon, NICE’s chief executive, says this demonstrates that the institute’s aim isn’t to save money but to make spending more effective.

Still, Britain spends far less than the U.S. on drugs, not only because of usage restrictions but also because the government sets limits on the profits drug companies are allowed to make in the U.K. In 2004, the National Health Service’s drug bill, including Scotland, came to about $17 billion. Even after adding in out-of-pocket costs, Britain’s per-capita drug bill is less than half of that in the U.S. — about $340 a year per Briton versus about $800 per American based on IMS Health figures.

In Britain, the Alzheimer’s drugs cost about $1,500 a year per person. The total cost to the National Health Service is a little over $100 million a year. The money goes mainly for three drugs: Aricept, Exelon from Novartis AG, and Reminyl from Shire Pharmaceuticals Group. All three are available in the U.S. and covered by most plans under the new Medicare drug benefit. Reminyl is sold in the U.S. by Johnson & Johnson under the name Razadyne.

Underlying Cause

The drugs are thought to work by maintaining supplies of a chemical involved in the brain’s information processing. Since Aricept went on the market in 1997, the drugs’ global sales have risen above $3 billion a year, according to IMS Health. However, they don’t address the still-unknown underlying cause of Alzheimer’s, which gradually destroys a person’s memory and ability to reason and carry out daily activities. Ultimately the disease is fatal.

While studies aren’t clear-cut or unanimous, they generally suggest the drugs have a short-term effect in delaying the worsening of the disease and may even improve cognitive function temporarily for a minority of patients. Over several years, the effect seems to wear off. One study published this year showed that patients with mild cognitive impairment who took Aricept had a lower risk of progressing to full Alzheimer’s disease than patients taking placebo during the first year of the trial. But after three years the Aricept patients were no better off.

For British health authorities, the combination of high cost and apparently limited efficacy made the Alzheimer’s drugs a natural target of a detailed investigation by NICE, the institute charged with determining whether drugs are worth the money. NICE had already done a cost-benefit analysis and concluded in January 2001 that the drugs were worth paying for. This time it used different methodology and took into account new clinical-trial data.

Last year NICE hired a group of health economists at Southampton University to create a financial model. Using data from clinical trials, the model sought to measure how much benefit patients taking medication would receive over a five-year period compared with those not taking medication. It looked at some of the main benefits medicated patients received — improved cognition, improved quality of life, and a delay in the need for nursing-home or other full-time care.

Following NICE’s standard procedure, the economists then converted those benefits into what is called a “quality-adjusted life year.” This measure, known as a QALY or “kwah-lee,” is used by health economists around the world including in the U.S. A QALY assigns a score between zero and one to a person’s health. A person at zero is dead. A person at 1.0 is in perfect health. If a drug that costs $1,000 extends a person’s life in perfect health for one year and then the person dies, the drug’s cost per QALY is $1,000. Toting up all the numbers, the economists concluded that the Alzheimer’s drugs each cost more than $100,000 per QALY. Typically, NICE believes that drugs shouldn’t cost more than $50,000 or so per QALY, although it doesn’t set a firm line.

Data in hand, the institute convened a panel of doctors and other medical professionals in January of this year to make a recommendation. The panel was sharply divided. Patients’ families and drug companies were arguing that the Southampton University team failed to include some intangible benefits in its analysis such as the reduced burden on caregivers. Patients taking the drugs, they said, were more sociable and less dependent.

Ultimately the panel voted 12-8, with one abstention, to reject the drugs. It concluded that they were “outside the range of cost effectiveness that might be considered appropriate for the NHS.” The decision was announced in March.

Mr. Dillon, NICE’s chief executive, calls it a “very difficult decision” but defends the process of measuring how much an improvement in someone’s life is worth in monetary terms. “NICE has got a responsibility to act on behalf of the whole community, to make decisions about the best way to allocate a finite resource,” says Mr. Dillon. “We have to step back and look at just how much benefit is being obtained from the money the health-care system would have to pay.”

Mobilizing Patients

Within weeks of the NICE ruling in March, the Alzheimer’s Society, a patient-advocacy group that receives drug-industry funding, mobilized more than 500 patients and their families to protest discrimination against dementia sufferers. Across from the Houses of Parliament in London, they assembled around a giant inflatable elephant — the society’s symbol — and shouted: “They say cut back, we say fight back!”

Among the protesters was the Dennis family, who traveled by train from a village in Wiltshire. Joan Dennis, 80, began taking Aricept after being diagnosed with Alzheimer’s in January 2003. She hasn’t improved since then, but her doctor and family credit the daily doses of the drug with staving off further decline.

“Without them we are totally convinced that mum would not be in a state to look after herself at all,” says her 43-year-old son, Antony, whom she calls “Ant.” Ms. Dennis will be able to keep taking Aricept because any NICE ruling would only apply to new patients.

Chatting in Antony’s kitchen on a recent afternoon, Ms. Dennis couldn’t remember whether she had eaten breakfast that morning. But she is still able to live on her own, in a row house a five-minute walk away, and cooks her own meals and pays her own bills. Little signs posted around her house help her keep life on track. After forgetting a pan of ground beef on the stovetop last year and burning it to a crisp, she taped several pieces of paper to the wall: “Make sure cooker is switched off.” Another sign stuck to a kitchen cabinet above the phone says, “Don’t call Ant unless it’s pretty urgent.” Before she posted that reminder, Joan says she would sometimes call Antony dozens of times a day to ask about “silly” things she was worried about.

Antony believes the drugs have given his mother the energy to spend time with her youngest grandson, Toby, who is 3. She often reads to him from a brown velvet sofa in her living room. During the protest march in London, Toby carried a placard that said, “I love my Grandma.”

In June, NICE gathered its panel of experts again. They heard officials from the Alzheimer’s Society give the results of a survey of 4,000 patients and caregivers. The survey found 73% of them felt the drug treatments had worked in their cases. The committee declined to change its decision. Later, though, it scheduled another meeting for Dec. 20.

A Hard Case

Pharmaceutical companies will have a chance at the December meeting to argue that their drugs offer especially significant benefits for some groups of Alzheimer’s patients. However, that is a hard case to make because studies offer little evidence for what type of patient does best on the medication. The panel may decide to issue a final rejection of the drugs at that meeting. Companies or patients could still appeal the decision to a separate appeals commission.

Some doctors say they’ll continue prescribing the drugs until local officials force them to stop. “As someone who’s actually seen patients — unlike the epidemiologists and health economists who see this as an incredible waste — I know these drugs work,” says David Wilkinson, a doctor who treats dementia patients in southern England. “If the drug companies hadn’t priced them as they have we wouldn’t be in this bloomin’ argument.”

Pfizer says it and its partner, Eisai, reduced the price of Aricept by 7% on Jan. 1, 2005, under an agreement with Britain’s Department of Health. Paul Hooper, managing director of Eisai in the U.K., points out that the drugs are the “same price as a pint of beer” per day.

Mr. Dillon, the NICE chief, notes that doctors were on the committee that declared the drugs not cost-effective. “This isn’t a bunch of technocrats in an office block in London making a decision,” he says.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

Blog Roll

Alliance for Patient Access Alternative Health Practice
Better Health
Biotech Blog
CA Medicine man
Cafe Pharma
Campaign for Modern Medicines
Carlat Psychiatry Blog
Clinical Psychology and Psychiatry: A Closer Look
Conservative's Forum
Club For Growth
Diabetes Mine
Disruptive Women
Doctors For Patient Care
Dr. Gov
Drug Channels
DTC Perspectives
Envisioning 2.0
FDA Law Blog
Fierce Pharma
Fresh Air Fund
Furious Seasons
Gel Health News
Hands Off My Health
Health Business Blog
Health Care BS
Health Care for All
Healthy Skepticism
Hooked: Ethics, Medicine, and Pharma
Hugh Hewitt
In the Pipeline
In Vivo
Internet Drug News
Jaz'd Healthcare
Jaz'd Pharmaceutical Industry
Jim Edwards' NRx
Kaus Files
Laffer Health Care Report
Little Green Footballs
Med Buzz
Media Research Center
More than Medicine
National Review
Neuroethics & Law
Nurses For Reform
Nurses For Reform Blog
Opinion Journal
Orange Book
Peter Rost
Pharm Aid
Pharma Blog Review
Pharma Blogsphere
Pharma Marketing Blog
Pharmacology Corner
Pharmaceutical Business Review
Piper Report
Prescription for a Cure
Public Plan Facts
Real Clear Politics
Shark Report
Shearlings Got Plowed
Taking Back America
Terra Sigillata
The Cycle
The Catalyst
The Lonely Conservative
Town Hall
Washington Monthly
World of DTC Marketing
WSJ Health Blog