How Should the NHS Make Funding Decisions About Cancer Drugs?

Table of Content

This essay will examine the criteria that should be taken into account by the National Health Service (NHS) with regard to making funding decisions related to cancer drugs. It will first consider how the NHS currently reaches such decisions before focusing on if the opinion of the patients themselves should be a factor. This will be followed by what the most efficient method of making such judgements would be, and on how equitable concerns would affect efficiency. Then the debate on whether patients should be allowed to pay for additional or alternative drugs themselves (co-payments) will be discussed, before finally taking into account methods of rationing that could be employed.

To begin it is important to establish how the NHS presently make funding judgments regarding cancer drugs, as it is rather redundant to theorize how the process should occur without considering what may be wrong with the current system. Decisions in relation to drugs funding are made by local Primary Care Trusts (PCTs), of which there are 151 across the UK, that receive an annual budget based on the population within their catchment area. They must take into account two key aspects; firstly the current government policy that can be found in the 2011 Department of Health ‘Improving Outcomes: A Strategy For Cancer’ and secondly the guidelines set out by the National Institute for Health and Clinical Excellence (NICE), as it is there that decisions as to which drugs are available are made and guidelines as to how particular types of cancer are treated are developed (NICE, 2011).

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The latter institution is particularly pertinent as the introduction of the NHS Reform and Health Care Professions Act 2002 retrospectively legislated directions from the Secretary of State ensuring that PCT’s provided funding for every NICE approved drug. This localized decision making is evidently problematic as it is arguably to blame for the geographical discrepancy in the availability of drugs that have not been approved by NICE (Jackson, 2010), which suggests the first change that should be made is to eliminate PCTs and establish a centralized NHS authority to make the decisions. It can be argued that a national organization would be unresponsive to the specific needs of individual patients and the knowledge of their local doctors, but the coalition government do not appear to agree as one of the key points in the 2011 Health and Social Care Bill is to abolish the PCTs.

The criteria that a central NHS organisation would have to take into account when making funding decisions will now be discussed, beginning with if patient choice should be a factor. It has been suggested that an individual is in the best position to identify their own needs (consumer sovereignty), although this could influence funding negatively as it risks patients requesting more expensive medications as this connotes with more effective, when in actuality it is often merely an indicator of how new the drug is (McCrone, 1998). Whilst patients have the right to refuse treatment they currently possess considerably less choice in terms of provider and drugs prescribed, and it can be argued that this is appropriate because of the asymmetrical information on the part of the patient, as due to the complex nature of their disease they would lack the knowledge to successfully evaluate the diagnoses and treatment recommended by the Doctor (Stiglitz, 2000). Additionally unlike most products individuals consume cancer drugs cannot be accurately recommended by peers, which further reduces the knowledge the consumer has access to, and this consequently suggests that they should not be an active part of the decision making process.

Two of the primary goals of resource allocation are those of efficiency and equity, and these dichotomous goals are problematic in that they can only be maximised at the expense of the other. It has been suggested that the most efficient method of making healthcare funding decisions cannot be to base them on providing the best possible outcome regardless of cost for each individual, as this is unrealistic and would lead to disparity in the resources allocated (Le Grand et al, 2008). Pareto efficiency states however that no one person can be better off without someone else being worse off (Stiglitz, 2000), and as such arguably an effective method of making funding decisions about cancer drugs would be to prioritise those who have a higher chance of recovery using non uniform provision, and this could be done by concentrating funding on oncology drugs as opposed to palliative. This is partially because keeping patients alive for as long as possible if their cancer is not in remission cannot be an efficient goal for drug allocation (Le Grand et al, 2008), and also due to the financial burden of providing a rival consumption product with no chance of recouping the expense. The latter refers to not only the initial financial cost of the drugs that has to be considered but also the additional loss of production and contribution to the economy if the patient is unable to work. In the case of those whose life will only be extended for a short amount of time due to the drugs the marginal social cost appears to outweigh the marginal social benefit.

This leads to the need for equity, a particularly important component of any decision related to healthcare due to it being an extremely expensive commodity. One widely used definition of in terms of healthcare is that of horizontal equity, or ‘equal treatment for equal need’ (Le Grand et al, 2008), but it may be more useful to the decision making process to view it in terms of Rawls theory of distributive justice, with higher precedence given to the funding of those who are worse off financially as the difference principle states that only the allocation of resources that maximises the utility of the worst off is fair (Stiglitz, 2000). This conforms to vertical equity, which accepts that individuals are not equal in terms of resources and as such should be treated differently. This can be interpreted as a suggestion that priority for funding is given to those who cannot afford it through other means, and whilst this appears to be a helpful caveat in deciding how funding is allocated it is problematic and politically difficult to implement in its own right (Donaldson and Gerard, 1993). This is because the NHS is funded through taxation, and consequently those who would be in a financial position to pay for their own medial care will presumably have contributed a significant amount to the NHS budget.

It does however lead to the question of if NHS patients should be allowed to pay for drugs that the NHS is not legally bound to provide (co-payments). It can appear incongruous that patients may want to pay for drugs at all when the NHS provides a ‘comprehensive service, available to all’ (NHS Constitution For England, 2009), but in reality drugs that exceed the cost of £30,000 per annum are not deemed cost effective by NICE (Appleby et al, 2007) and are unlikely to be approved and available to NHS patients. The introduction of the new £200 million cancer drugs fund is partially intended to address the access problem (Department of Health, 2010), but it is worth considering co-payments as this fund is finite and may not be extended beyond 2013.

The argument against allowing co-payments is an egalitarian one, as NHS care is based on citizenship and as such the only way to create a system by which one person would have precedence over another is on a clinical, and not financial, basis (Dingwall et al, 2001). Allowing individuals the right to co-payments would fundamentally undermine this, but on the other hand the libertarian ideals that a democracy should uphold would allow for people to use their financial property in any way they wish, and to prevent them from doing so is an infringement on their autonomy (Richards et al, 2001). It can be argued that permitting co-payments would relieve some of the burden on the NHS budget and allow the institution to function more effectively in a consumer society (Gubb, 2008), and in light of the purpose of this essay it appears allowing co-payments would be an excellent option to promote vertical equity and ease the burden of rationing somewhat.

With regard to rationing it is accepted that this must take place (Mechanic, 1995), but the specifics of what system should be used are less agreed upon. One qualifier that could reasonably be used is age, with younger people receiving priority. This can be argued for on the basis that any treatment that will assist a person for the rest of their life will benefit the young to a greater extent (Williams, 1997), and research shows that public opinion concurs with this, with 80% of participants in one study prioritising a child to receive medical care over older candidates (Cookson and Dolan, 2000). On the other hand the elderly have paid taxes and as such to deny them the right to drugs appears rather unjust, and furthermore they have as much legal right to life as any other person, which would presumably mean any rationing based on age would have to be implicit. This is problematic in that it can be argued that democracy fosters explicit rationing (Evans, 1997), and in addition the NHS should be openly accountable to the public, which suggests that any system of rationing that contradicts either of these factors is not the ideal solution.

It may be more useful to use a set framework for making all decisions as this should eliminate arbitrary decisions and create uniformity. Duplicating that used by NICE, which entails using the Quality Adjusted Life Year (QALY) to assess how cost effective a drug would be (Jackson, 2010) could do this. This takes into account the number of years and quality of life gained by the introduction of the drug. Each QALY is assigned a number on a scale of 0 to 1, the former equating to death and the latter perfect health, and drugs with higher QALY scores are deemed more cost effective (Johansson, 1995).

This method can be criticised however as being concerned purely on the patient’s health and not on their utility, ignoring factors such as patient satisfaction and overall happiness (Brazier, 2004). Another system would be to employ the theory of Rational Choice as a framework, as this is a basis from which economic decisions can be made. It can be defined thusly, ‘to be rational is to select from a group of alternative courses of action that course which maximises output for a given input, or minimises input for a given output…to select a course of action from a group of possible courses of action which has a given set of predicted consequences in terms of some welfare function,’ (Carley, 1981). It does however assume the decision maker has perfect information in terms of their subject, which is doubtful with regard to cancer drugs due to how complex and numerous they are (McDonald, 2002). In contrast to the QALY assessment this appears somewhat overly utilitarian, in that it suggests that the moral worth of an action is decided solely by outcome. In addition the theory may not be ideal in terms of cancer drugs as the predicted outcome of a drug can vary hugely depending on the patient and their illness, and it also fails to take into account that those in charge of making the decisions are not infallible, and will most likely be influenced by sentiments regarding patients that could override maximising utility.

In conclusion the general recommendations made in this essay are as follows; the abolishment of primary care trusts to remove the geographical discrepancy in drug access, the legalisation of co-payments to relieve some of the burden of the cancer drugs fund and promote vertical equity, prioritisation of those with a higher chance of recovery through focusing funds on oncology drugs, the omission of the patients personal choice in the decision making process and finally the exclusion of age as a rationing qualifier due to the implicit nature such a system would require. These suggestions should take place within the context of a wider framework that would help make all decisions more uniform, and of the two discussed it appears utilising the QALY assessment is the most ideal method as it manages to be cost effective while considering the quality of life experienced by the patient.


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