During 2000–2020, the U.K.'s National Health Service (NHS) faced significant trade-offs in prioritizing new drug treatments, as resources allocated to these medications often came at the expense of broader population health gains.

Lancet research revealed that while newly approved drugs directly benefit certain patients, the overall impact on population health was negative due to the high costs and resulting resource reallocation.

A retrospective analysis reviewed technology appraisals conducted by the National Institute for Health and Care Excellence (NICE) on 332 drugs.

Of these, 276 (83%) received positive recommendations, and most were appraised within five years of regulatory approval.

The study ultimately included 183 drugs after excluding ineligible cases. While these drugs generated an estimated 3.75 million quality-adjusted life years (QALYs) across 19.82 million patients, their cost to the NHS—totaling $94.93 billion (75.1 billion pounds)—led to an estimated net loss of 1.25 million QALYs.

For example, oncology drugs demonstrated a median cost-effectiveness ratio (ICER) of 30,000 pounds per QALY gained, significantly higher than the 6,478 pounds for anti-infective drugs.

Additionally, the ICER for new drug recommendations rose by 32% from 2000 to 2020, reflecting increased financial pressures on the NHS.

Despite potential long-term benefits from price reductions after patent expiration, these effects were limited. Only 19% of the studied drugs had generic or biosimilar alternatives by 2020.

For new drugs to contribute positively to population health, their initial costs would have required a median reduction of 42%.

The ongoing debate around NICE's cost-effectiveness threshold remains central to policy discussions.

A 2024 agreement retained the current threshold until 2029, but experts argue for alignment with the Department of Health and Social Care's estimate of health-opportunity costs.

Such an adjustment could ensure the NHS achieves better value for its investments in new drugs without compromising care quality in other areas.

Balancing innovation with equitable health outcomes requires nuanced policy solutions. The study suggests a lower cost-effectiveness threshold, closer to 15,000 pounds per QALY, could better align spending with health gains.

However, opposition from the pharmaceutical industry underscores the challenges of reforming pricing policies while fostering innovation.

This approach highlights how benefiting one group of patients may require deprioritizing others as existing NHS services and treatments are displaced to fund new drugs.

For instance, in 2010, NICE approved Roche Holding AG's (OTC:RHHBY) Herceptin (trastuzumab) for metastatic gastric cancer, deeming an ICER of 43,206 pounds per QALY gained as cost-effective.

Framing this as 2.88 QALYs forgone for every QALY gained clarifies the value placed on patients receiving the treatment versus those who might lose out on care.

At a population level, using trastuzumab in this context resulted in an estimated 4,000 QALYs lost between 2010 and 2020.

However, adopting this perspective could pose challenges for policymakers due to the established 20,000–30,000 pounds per QALY threshold.

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