Think tank sets out new ‘pay-for-what-works’ model to address affordability in NHS

A recently published report, sponsored by Novartis, has described the potential benefits of the NHS only paying for drugs that actually work as a new model to address affordability and reduce risks within the health system.

The report from the Social Market Foundation (SMF) discusses the challenges faced by the NHS, which encompass not only budget constraints but also growing strain on the system due to an increasing population. Additionally, it notes the effect the reform agenda of personalised outcomes-based care, which is gathering pace, has on the healthcare system.

So, efficiency is high on the agenda for the NHS, yet the way in which medicines are acquired has not really been examined despite a current expenditure of £16.8 million each year on treatments.

This overriding cost control structure could lead to sacrificing long-term value, according to the report authors, which would in turn harm patient outcomes. Instead, the report stresses that a longer-term focus on value for money should be adopted.

“With pressure on the health budget growing, the NHS should adopt the principle of only paying for what works when it buys medicines. This would simultaneously drive better value for money and mean that patients could be given earlier access to new treatments,” said report author and SMF research director Nigel Keohane in a blog post. “Given the NHS spends £17 billion on medicines each year, the reforms would also steer manufacturers to develop innovative drugs that can make the largest improvements to patient health.”

“We know that our health system is incredibly stretched. The NHS is being asked to do more with less funding, and patients are, rightly, demanding swift access to the effective, innovative treatments, they deserve. We need a different approach so the health system is sustainable, delivering better economic value over the long-term, and ensuring better patient outcomes,” added Barak Palatchi, oncology general manager, Novartis UK & Ireland. “We are working in partnership with the medical and patient communities to bring our science-based innovation and pioneering approach to deliver novel treatments to more people when they need them.”

The research backing up this report has been taken from similar developments in other countries, such as Italy where the manufacturer must pay back the full amount of the medication to the Italian commissioner for every non-responder under the ‘payments-by-results’ scheme or a proportion of the amount under the ‘risk-sharing’ contracts scheme.

Further, the authors set out proposals on how the scheme should be implemented, including inclusion criteria, a definition of outcomes, better measurement and data, and cost-sharing options.