NHS England’s budget impact test: what it means for dementia

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By Clare van Lynden | Monday 03 April 2017

From this month, new measures will come into force that will change the way new treatments are introduced on the NHS in England. You may have seen media reports about the change, and heard that a number of organisations, including Alzheimer’s Research UK, have raised concerns about the measure. So what exactly is happening – and what might it mean for people with dementia?

Deciding on cost-effectiveness

For any new treatment to be given on the NHS, it must first be assessed by the National Institute for Health and Clinical Excellence (NICE). NICE’s role is to establish whether a new treatment is cost-effective – in other words, whether the benefits it offers to patients justify the price tag. This judgement is made using a comprehensive assessment called a health technology appraisal.

NICE assessments and NHS funding are the last steps in the process of getting new treatments to patients

This is an important step. Without considering cost-effectiveness, our health service could end up paying a high price for drugs that offer only a small benefit compared to other, less expensive treatments. With a finite budget available to the NHS, these assessments ensure the treatments it pays for are good value for money in terms of their impact on people’s lives. Currently, if NICE considers a drug to be cost-effective, NHS England is then tasked with funding the treatment for its patients – usually within 90 days of NICE’s decision.

The budget impact test

However, from 1 April 2017 a new ‘budget impact test’ will also apply to treatments that have been judged cost-effective. Under this measure, if a new treatment is expected to cost more than £20m a year in any of its first three years, this could trigger talks between NHS England and the drug makers. Crucially, if these negotiations are unsuccessful, NHS England will be able to apply for permission to delay its introduction.

The pressures on the NHS budget have been well documented in recent years, and the budget impact test is aimed at helping manage these demands. As we outlined in our response to the changes last month, it’s understandable that NHS England will want to seek ways to meet its financial pressures. It’s also right that drug companies should be challenged to offer affordable prices for treatments – but we believe the budget impact test is not the right tool to achieve this.

What does this mean for people with dementia?

Right now, people with dementia won’t see any difference in the way their condition is managed. The budget impact test only applies to new treatments, so existing drugs, which can help with some of the symptoms of dementia, will still be prescribed as usual.

But we desperately need better ways to treat the underlying diseases that cause dementia, which is why with your support, drug discovery is one of the key areas we are investing in. Our concern is about what could happen when a breakthrough drug for dementia is discovered. One of the main criticisms of the budget impact test has been that treatments with the potential to help large numbers of people would be more likely to be affected, as these will also mean a bigger cost to the NHS. With so many people living with dementia, future treatments for the condition could fall into this category. While our scientists are working hard to deliver much-needed new treatments for dementia, we want to ensure the NHS is prepared when that day comes.

What’s the solution?

At Alzheimer’s Research UK we’re very aware of the challenges that may affect the roll-out of new dementia treatments – last year, our Treatments of Tomorrow report delved into some of these issues, including the significant upfront cost a treatment would likely mean for the NHS. That’s why we’ve pushed back against the new measures coming into force tomorrow, instead arguing for an improved early warning system for the NHS about new treatments on the horizon, allowing conversations with pharmaceutical companies to happen much sooner.

Last year, the government-commissioned Accelerated Access Review outlined proposals that could help meet some of these challenges and speed up the process of introducing new medicines. One suggestion included the creation of a Strategic Commercial Unit inside NHS England, whose role would be to work with innovators who are developing new medicines. We are still waiting to learn whether the government will adopt these proposals, but we would hope to see England’s health service take an approach that’s more in line with these ambitions.

While the solutions to this complex challenge will not be easy, we must work to find them or we risk failing those who could stand to benefit from future treatments. At Alzheimer’s Research UK, we are working with other charities to suggest alternative approaches, and will continue to raise our concerns – and put forward possible solutions – to those with decision-making power.

To help us keep this issue and dementia research on the political agenda, sign up to become a campaigner.

1 Comment

  1. L Tanner on 29th April 2017 at 1:51 pm

    Can you put a price on a life???

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About the author

Clare van Lynden

Team: Campaigning