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Pricing the value of life - Health Policy Today, 14th August 2008

An inherent tension in healthcare has re-emerged in a contemporary theme.  It relates to the balance between population-level and individual-level perspectives on policymaking.  

Over the last week, we have seen the advancement of the individual perspective.  In relation to NICE’s judgement on new cancer drugs, we have read about individuals who are very ill and have sympathised with them and their personal circumstances.  We have read criticisms of economic judgements trumping human need.  There has been a greater focus on the value NICE affords to extra months of life.  Health economists and planners have had a bad press.

In defence of economists in the NHS

A Telegraph article today reports Professor Jonathan Waxman’s view that NICE is ‘bureaucratic, unaccountable and run by economists, not doctors’.  This view is gaining support, particularly from commentators new to the health debate who do not have to face the financial implications of their views.  In this context, it is interesting to read a defence of the NICE approach in today’s New Statesman, written by Peter Wilby: http://www.newstatesman.com/society/2008/08/nhs-drugs-nice-life-companies

His article suggests the NHS needs economists and more economic rationality.  ‘If we genuinely believed the NHS should meet every need at all times, regardless of cost, we would all volunteer to pay 95 per cent tax. ... The NHS could quite easily consume the country’s entire GDP'.

To an individual who has been given a year to live, six months' additional life beyond that year can seem a long time. Yet on a social level, Wilby suggests that this may not be good value for money.  This is what NICE concluded – that six extra months at a cost of £75.74 per day is not worth the cost.

The response of many is to suggest that the government perhaps place too low a value on human life or, in some cases, that the government shouldn’t attempt to cost life.  Peter Wilby points out that similar formulas are central to all sorts of policy decisions, such as whether to improve a road junction - whether the number of lives lost warrant the cost of the work.

Should policy place a value on human life?

There is a growing interest in the value placed on life by NICE and the ‘qaly’ (quality-adjusted life year) framework. A Telegraph article today explains that, ‘generally, NICE approves drugs that cost less than £20,000 for every extra year of improved quality of life they provide, known as a Qaly or Quality Adjusted Life Year. Between £20,000 and £30,000, NICE committees need to be persuaded of the benefit; above £30,000, the drug is usually turned down.’ http://www.telegraph.co.uk/news/2552690/Nice-should-be-abolished-expert-claims.html

The director of policy at Cancer Research UK, Richard Davidson, says there has been “no public debate about setting the Qaly threshold at £30,000 and it ought to be reviewed”.

Should there be a public debate on the value of life?

In Peter Wilby’s New Statesman piece, he makes the point that it is legitimate to argue about whether £30,000 is too low, ‘and in the case of the kidney cancer drugs, whether the data uses to reach an estimated minimum £71,500 per qualy was sound. But there should be no argument that some calculation is needed.  We would do similar sums, in a less sophisticated way, if we paid privately.  Would we pay high insurance premiums to ensure we got any treatment we ever needed?'

The NHS pools social resources so these agonising decisions are not taken by the vast majority of people.  Because of the cost, however, limits have to be set on some interventions. ‘Decisions still have to be taken, collectively for a collective service.  Inevitably, some will seem arbitrary and unfair; you can’t expect terminally ill patients and their relatives to view them dispassionately’.

How can we gain a better value for life gained?

The Professor who calls for the abolition of NICE believes that the government would be better served by negotiating directly with the pharmaceutical industry about the cost of drugs.  Other voices have also suggested that this might be a fruitful approach, in conjunction with NICE, which most people believe is necessary.  If NICE didn’t exist, it would have to be invented.

The Conservatives response to the co-payment debate has been interesting.  Rather than call for their introduction, they have instead focused on NICE and the speed with which it assesses new treatments - as well as the financial arrangements by which new drugs are introduced.  In their consultation on co-payments, they talk about evaluating drugs as they introduced with a payment deal based on how effective they turn out to be.  Peter Wilsby believes that the drug companies should be allowed to prove their case.

‘The companies reckon NICE has got its figures wrong on the kidney cancer drugs and that the cost per qaly could, in one case, be only £28,500. Let them prove it. The NHS could buy the drugs, assess their value-for-money in practice, and then receive reimbursement if they don't deliver as promised.’

This kind of system has been championed by the Conservatives.  Wilsby would like to see the introduction of a scheme he believes would be “payment by results”. He would also like to see the introduction of evaluations for currently licensed drugs, to ensure value for money.

Will improved NICE procedures prevent the introduction of co-payments?

Even if NICE can make faster assessments and even if drug companies and the government could strike a deal that could gain value for money, there will still be patients who want to use drugs that are unlicensed by NICE.

Should this mean that co-payments should be allowed for those that wish to spend the money in pursuit of a small extension of life?  Peter Wilsby says there are several reasons why they shouldn’t, though that does not necessarily mean they won’t.  

‘Unfortunately, this government has always been weak in proselytising for the merits of collective provision. I am not optimistic that it will resist the clamour for allowing wealthier patients to buy their own drugs.’