Dear all,


Is there a reason that drug companies don’t bear the cost of continuing development and long term efficacy? I am wondering if the emphasis on loss for the patient could be otherwise stated such as when this drug is shown to deliver benefits in proportion to its cost and effectiveness we will be happy to include it in the many drugs available to patients. Then the answer to patients is not the drug costs too much money and saving you will kill others, but rather the drug company has not elected to determine efficacy in line with a reasonable price point but as soon as they do we are willing to consider the drugs inclusion and to do otherwise would be an irresponsible use of your tax dollars. Also a break down on what the drug costs the company to produce might be useful, for instance this drug costs them x x$ to develop, xx to manufacture and their profit margin is xx$ or say xx$ more than what it costs to produce this drug is what is being passed on to consumers...


An objective arms length research program where drug companies can apply to have their products tested/replicated at a cost to them by outside parties could be established and perhaps help our universities as well and each drug company pays a percentage of what they are charging for the drug to be included. Drug companies that elect not to be a part of the plan could be excluded from government contracts and the advertising of their products could be banned until efficacy and cooperation with the partnering country was in place. I think if several developed countries did this at once the impact could be considerable.


Could there even be a trial period with promising products with lesser evidence in that they are accepted with the provision that a certain percentage of payment would be released after efficacy evidence is established by the purchasing entity as although the cost of knowledge is critical so is paying 60,000 per annum per patient over time for something that day to day efficacy is not made a part of the evidence. For instance if I was a drug company that knew the limitations of my product well but knew I could get it past the initial evidence barrier and charge top dollar then why would I go for further efficacy that could cut me out at a later date while costing me money?


Also how about transparency in cost for development and some realistic barriers on price gouging where prices for drugs are not artificially escalated once initial efficacy is established....





From: Evidence based health (EBH) [mailto:[log in to unmask]] On Behalf Of Maskrey Neal
Sent: 20 July 2011 08:55 AM
To: [log in to unmask]
Subject: Re: solution to health care cost crisis: technical vs.philosphical..


Annual NHS England primary care drugs bill is c8billion. Secondary care is c2.3billion and homecare medicines (on the best estimate) 1billion. Home care includes often complex medicines (chemo, enteral nutrition for example) administered, logically, in the patient's home. Different and complex supply, contractual arrangements and pricing / reibursement mechanisms apply across all three sectors.


Growth in spend is pretty much flat in primary care and has been for the last 4-5years, despite a pretty steady 5% growth in the number of prescriptions annually over the same period. There's double digit percentage annual increases in the other two sectors.


None of it negates Ash's points, or indeed the discussion.


Best wishes



Neal Maskrey

Programme Director

National Prescribing Centre

Provided by the National Institute for Health and Clinical Excellence
Ground Floor Building 2000 Vortex Court | Enterprise Way | Wavertree Technology Park | Liverpool L13 1FB | United Kingdom

Tel: +44 (151) 295 8691 | Fax: +44 (151) 220 4334

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From: Evidence based health (EBH) [mailto:[log in to unmask]] On Behalf Of Ash Paul
Sent: 20 July 2011 13:26
To: [log in to unmask]
Subject: Re: solution to health care cost crisis: technical vs.philosphical..


Thanks Stephen for pointing out my typo!

As you have rightly written, the NHS annual budget in England is 110 billion pounds, it's the annual NHS drugs budget that I was referring to.




From: Stephen Senn <[log in to unmask]>
To: [log in to unmask]
Sent: Wednesday, 20 July 2011, 12:35
Subject: Re: AW: solution to health care cost crisis: technical vs.philosphical..

Point of clarification. I think that Ash must be referring to the annual budget for drugs. The NHS annual budget must be a lot more than that. (Reading further down the email I take it that that is what was meant.)


However, I agree with the point. Cruel as it may seem, paying for rare diseases has important resource implications but also evidence implications. Evidence costs; if you want the same evidence for rare diseases that you want for common ones , then, other things being equal, the cost will be the same. Thus the cost per patient will be much more for a rare disease than a common one. When you consider the value of information, this does not make sense. It may be appropriate to accept lower standards of evidence. Thus part of the total cost-benefit equation for a list such as this has to be the cost of information.





Stephen Senn

Professor of Statistics

School of Mathematics and Statistics


Direct line: +44 (0)141 330 5141

Fax: +44 (0)141 330 4814

Private Webpage:


University of Glasgow

15 University Gardens

Glasgow G12 8QW


The University of Glasgow, charity number SC004401


From: Evidence based health (EBH) [mailto:[log in to unmask]] On Behalf Of Ash Paul
Sent: 20 July 2011 06:39
To: [log in to unmask]
Subject: Re: AW: solution to health care cost crisis: technical vs.philosphical..


Dear Gary,

I don't think it is fair of you to compare NZ with the rest of the world.

In NZ, you all have a fantastic organisation PHARMAC who are given a limited drugs budget every year by the government and told to stay strictly within that budget for the whole of NZ, which they have done wonderfully well over many years now.

That is not the case in other countries.

For instance, we have a very good equivalent organisation NICE in the UK, but they don't hold a fixed budget and therefore don't consider affordability when deciding what drugs the country should pay for. They are not financially accountable to the NHS. To just look at clinical and cost effectiveness without looking at affordability is, in my opinion, a fallacy.

To put this into context, the NHS annual budget is 7 billion pounds. Taking the case of rare diseases, this total money will pay for only 120000 patients, assuming that each drug costs 60000 annually. Bear in mind that many new drugs for rare diseases cost many times that amount. If we have 7000 rare diseases and we had new drugs for all of them (a fantasy situation right now, but all the drugs companies are extending their orphan/rare diseases portfolio at a frenetic pace; the NIH calculates that by the year 2020, there will be 200 new and costly drugs for rare diseases atleast), you would need only 17 patients in each rare disease category to bust the entire annual drugs budget of the NHS at present.

There is a need to seriously revisit contentious areas like 'Rule of Rescue' and 'Opportunity Cost' in the changed/desperate financial situation in the whole of the world.





Dr Ash Paul
Medical Director
NHS Bedfordshire

21 Kimbolton Road


MK40 2AW

Tel no: 01234897224




From: Gary Jackson <[log in to unmask]>
To: [log in to unmask]
Sent: Wednesday, 20 July 2011, 5:06
Subject: Re: AW: solution to health care cost crisis: technical vs.philosphical..

A fascinating discussion - cost-effectiveness and value for money are hardly
new phrases in publicly funded health systems like New Zealand, but there is
certainly a renewed focus on it in economically tough times.  I'd like to
contribute 2 small bits. 

Agree price is important, especially when combined with the evidence of
effectiveness.  One example locally has been the use of statins in primary
vs secondary prevention of CVD.  With the price of 40mg of Simvistatin in
New Zealand now ~6c a tablet, or $20 a year (around 10 pounds) the cost
effectiveness threshold changes - normally treatment is recommended at a 15%
absolute risk of an event in 5 years, you can probably justify dropping to
10% risk, which is getting into the primary prevention area.

Second point is the numbers bandied around for costs in the last year of
life, which tend to be grossly exaggerated.  In one district in NZ the cost
was about 5% of the total public system healthcare spend- that is the
inpatient, outpatient, pharms and labs cost.  (attached).  Yes it can be
expensive caring for people in their last year of life (average $22k in this
sample, but range up to $780k), and things like advanced care planning are a
good thing to be promoting, but the total number of deaths is relatively
small compared to the rest of the population - it is the tide of chronic
disease that is the larger concern.


Dr Gary Jackson    Health Partners Consulting Group
Consultant Clinical Planning
M  +64 21 286 1815
[log in to unmask]
A  PO Box 147209, Ponsonby, Auckland

-----Original Message-----
From: Evidence based health (EBH)
[mailto:[log in to unmask]] On Behalf Of Dr. Amy Price
Sent: Wednesday, 20 July 2011 5:06 a.m.
To: [log in to unmask]
Subject: Re: AW: solution to health care cost crisis: technical

Dear Hilda and All,

I completely agree with your statement and think it is a huge consideration.
Some interventions are not so amenable to RCTs and the practitioners that
specialise in this areas may not have the statistical experience to put
together a good clinical trial. On the other hand RCTs may be avoided due to
prohibitive cost, lack of facilities, or even that those making money
already know the intervention is useless so avoid clinical trials.

As far as vertebroplasty I worked with several patient based organisation
and some of the patients did very well with this intervention and healed
faster and with less pain in contrast to their peers. There are others who
had devastating results. I imagine better quality study of the interventions
could have saved a lot of time, pain and money. People outside the standard
deviations are often dismissed but this does not negate the effectiveness
for them. There were others RCTs on arthroplasty of the knee, brain
training, psychotropic drugs etc where later studies were found to conflict
with the initial RCT. A large clinical trial is great when it is well run on
accurate assumptions but in the end it may not be as unbiased as it is made
to appear. In these cases an RCT may be more like an N of 1.

I read over some of the papers re technical vs philosophical and found that
rather than extending bridge building resources most seemed to fall along
the lines of the immorality of spending money and the drama of end life

There is little out there to guide the respective parties about how to
initiate and time information choices that work for them or what processes
are required if a change of mind takes place. Statements like 95% of health
care is spent on end stage care were not objectively justified and really
one is hardly going to need much healthcare while one is well.

Best regards,


Amy Price
Building Brain Potential


-----Original Message-----
From: Evidence based health (EBH)
[mailto:[log in to unmask]] On Behalf Of Bastian, Hilda
Sent: 19 July 2011 11:46 AM
To: [log in to unmask]
Subject: Re: AW: solution to health care cost crisis: technical

G'day!  I like the terminology of "proven to be useless", because it reduces
the danger of throwing babies out with bathwater (interventions where the
issue is an absence of evidence, not evidence of absence of effect).
Evidence of absence of effect is unfortunately not required it seems for
many people to brand things useless. Often it seems to me that the equation
can be "intervention I don't believe in + no evidence of effect = useless",
instead of "likely to be harmful + no evidence of benefit" or "evidence of
no benefit". (No comment on vertebroplasty here - just the general point.)


From: Jeremy Howick
<[log in to unmask]<mailto:[log in to unmask]>>
Reply-To: Jeremy Howick
<[log in to unmask]<mailto:[log in to unmask]>>
Date: Tue, 19 Jul 2011 11:33:27 -0400
"[log in to unmask]<mailto:[log in to unmask]
<[log in to unmask]<mailto:[log in to unmask]
Subject: Re: AW: solution to health care cost crisis: technical

Dear All,

I have very much enjoyed reading these useful contributions. Paul Glasziou
showed us all up by stating what should be obvious to all of us - what
everyone signed up to this list should be fighting for: CUT OUT TREATMENTS
THAT HAVE PROVEN TO BE USELESS. It merits restating:

"We might do this by doing less useless things (cutting waste). For example,
vertebroplasty for osteoporotic fractures was costing the US about $1Billion
per year, but the two RCTs that used a sham control showed no benefit. This
is just one of a very long list. We could also cut costs by doing the same
things better - which quality improvement aims to do .. Another example is
Peter Pronovosts' work to reduce central line infections, which saved lives
and money (from less ICU time)."

Best wishes,



Jeremy Howick PhD, MSc, PGCert, DipSoc, BA
MRC/ESRC Postdoctoral Fellow
Centre for Evidence-Based Medicine
University of Oxford
Oxford OX3 7LF
United Kingdom,descCd-authorInfo.html