Healthy Skepticism Library item: 10088

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Publication type: news

Fortson D.
Have a Nice day? Pfizer in court clash with British drug authority
The Independent 2007 May 13
http://news.independent.co.uk/business/news/article2536746.ece

Full text:

The world’s largest pharmaceutical company will next month square off with Nice, the government drug-rationing body, in an unprecedented showdown in the High Court.

The case, lodged by American drugs giant Pfizer and marketing partner Eisai of Japan, marks the first time that the Government’s National Institute for Clinical Health and Excellence, the entity that recommends whether drugs should be reimbursed by the NHS, has been put in the dock.

It is the clearest sign yet of a growing clash between the pharmaceutical industry and the Government over the latter’s efforts to reduce the £11bn that it spends every year on medicines.

“You could look at this as a line in the sand,” said a Pfizer spokesman. “This goes beyond a purely financial or commercial objective. This is about Nice itself and how they operate.”

The row stems from an initial decision by Nice in 2005 to withdraw approval for the NHS to buy a class of four drugs used to treat patients with Alzheimer’s disease. One of the four was Aricept, which was developed by Eisai and is co-marketed by Pfizer. The move sparked a storm of controversy, forcing Nice to reconsider its position. Last year, it gave its final appraisal, which largely stuck to the first ruling.

However, it said in its latest ruling that those in the moderate phase of the disease, rather than in the early or very late stages, would qualify. That left most of the 700,000 dementia and Alz- heimer’s sufferers in the UK ineligible for NHS-funded treatment.

Nice’s argument was that the drugs simply were not effective enough to give good “value for money”. Andrew Dillon, chief executive of the institute, said: “The evidence indicates that drugs are simply not effective for some patients… Health service funding is limited and it is our job to assess the clinical and cost-effectiveness of both drug and non-drug interventions to ensure the money spent by the NHS is well-spent.”

In terms of worldwide sales the UK is minute, representing just over 3 per cent of annual turnover. But for Pfizer this case is about more than the denial of one drug. “This has some pretty wide implications. We disagree with their process and with their decision to effectively ban these treatments,” said the Pfizer spokesman.

Last week, the High Court set 25 June for the start of a four-day judicial review. But the worry for drug companies is that Nice’s value-for-money approach could be exported to other countries.

Pfizer and other pharmaceutical giants are fighting against an array of forces that are gradually eating away at its base. As the population ages, healthcare spending has skyrocketed. That has led governments to become much more discerning about what they will pay for. Incremental improvements on existing treatments, for example, stand far less chance of being accepted than they did even five years ago.

Last year, Nice infuriated Pfizer when it issued a severely limited approval for Exubera, the world’s first inhaled insulin system for diabetics. Nice said that only those who could be clinically diagnosed as “needle-phobic” could have the treatment reimbursed by the state.

Drug prices in the UK are set under the Prescription Drug Pricing Regulation Scheme (PPRS), a profit-capping agreement renegotiated every five years by the Government and industry. In the last round in 2005, the Government forced through a 7 per cent across-the-board price cut. A recent report by the Office of Fair Trading said the NHS could save even more if it scrapped the PPRS altogether in favour of a new value-based pricing model.

Germany and Japan have also pushed through significant price cutbacks in recent years, while similar moves may be afoot in America, where more than half of the world’s drugs are sold.

The toughening stances of governments, a dearth of new drugs coming through the pipeline and challenges from producers of cheap generic drugs have kept Pfizer’s sales flat for the past three years.