Public Accounts Committee

Oral evidence: Cancer Drugs Fund, HC 583

Monday 30 November 2015

Ordered by the House of Commons to be published on 30 November 2015

Watch the meeting:

Members present: Meg Hillier (Chair), Mr Richard Bacon, Deidre Brock, Chris Evans, Caroline Flint, Kevin Foster, Mr Stewart Jackson, Nigel Mills, David Mowat, John Pugh, Mrs Anne-Marie Trevelyan


Amyas Morse, Comptroller and Auditor General, Laura Brackwell, Director, National Audit Office, Adrian Jenner, Director, National Audit Office and Marius Gallaher, Alternate Treasury Officer of Accounts, were in attendance.


Witnesses: Mark Hicken, Managing Director, Janssen UK, Harpal Kumar, Chief Executive and Chairman of the Executive Board, Cancer Research UK, and Deb Lancaster, Director of Market Access, Roche, gave evidence.


              Chair: Good afternoon everyone, and welcome to the Public Accounts Committee on 30 November 2015. Today we are looking at the National Audit Office investigation into the Cancer Drugs Fund. This is an interesting time, because the Department launched a consultation about a successor fund just two weeks ago.

              I should be clear that this Committee does not look at the policy of whether there should be a cancer drugs fund. We know that this topic—how we provide patients, including those who are terminally ill, with access to drugs that their doctors think will help them—is important. We do not decide how the money should be spent, or how much should be spent, but we do have an interest in how well it and the process are managed. We do not know the impact of the fund on outcomes because, unfortunately, the Department and NHS England have failed to collect the data required to show that. That is a concern of the Committee’s that we will touch on in our questions. Our other big concern is that in the past two years the fund has significantly overspent and NHS England expects that to continue this year as well, even though it has taken some action to stem that overspending.

              Our first panel of witnesses come from different backgrounds. They are not the people who choose how to spend the money, but the people who help patients to benefit from it. First, we have Deb Lancaster, the director of market access at Roche; thank you very much for coming, Ms Lancaster. Secondly, we have Harpal Kumar who, as well as being chief executive and chairman of the executive board of Cancer Research UK, also chaired the independent taskforce on the Cancer Drugs Fund; welcome to you, Mr Kumar. Finally, we have Mark Hicken, the managing director of Janssen UK, which is—well, are you Janssen or Johnson & Johnson, strictly?

              Mark Hicken: Janssen is a subsidiary of Johnson & Johnson—we are the pharmaceutical arm.


              Q1 Chair: So you would say you are Johnson & Johnson for today’s purposes.

              Mark Hicken: Yes.

              Chair: It is good to be clear about that. I am going to hand over to Stewart Jackson, who is leading the questioning today.


              Q2 Mr Jackson: Good afternoon. This is a more holistic question: what is your professional understanding of why, until reasonably recently, the UK has lagged behind other European countries in cancer recovery rates and the prescribing of appropriate cancer drugs to treat patients?

              Harpal Kumar: To clarify one thing: the taskforce looked at the entirety of cancer services, not just the Cancer Drugs Fund, so we spent a long time examining the very question you just posed. I think it is now fairly well understood that a number of factors drive the differential in survival rates on an international basis. The two most prominent are, first, that on average we tend to diagnose patients later than patients are diagnosed in other countries, so that on average a patient has more advanced cancer at the point of diagnosis. That makes it more difficult to treat and reduces the chances of successful treatment. That is one big issue.


              Q3 Mr Jackson: Why is that?

              Harpal Kumar: It is a multiplicity of things. There is a range of factors, the biggest single one of which is that we have an undercapacity of diagnostic testing and therefore, to some extent, problems in accessing diagnostic testing.


              Q4 Mr Jackson: In primary care?

              Harpal Kumar: In primary and secondary care. In that context, the whole system needs to be addressed. We know that we have far lower rates of diagnostic testing than most of the countries with which we choose to compare ourselves, by very significant margins. That reflects an under-investment in the workforce as well as in kit and so on, which knocks all the way back into primary care. That is the single biggest driver of the differentials in survival rates, because it means that you cannot necessarily access curative treatments quickly enough, which affects survival rates for most types of cancer. That is the biggest single driver, but there are also differentials in access to treatment, and that is across the board—it is not just for cancer drugs but, for example, radiotherapy as well. So there is a multiplicity of things, but the biggest single driver is late diagnosis.


              Q5 Mr Jackson: We are being compared with countries that do not always have a tradition of primary care—only acute hospital care—and they often do better at diagnosis against us, but we have both primary and secondary care.

              Harpal Kumar: As I say, it is a combination of different factors. It is partly the organisation of the system and the lack of integration between primary and secondary care that gives rise to some of the problems we see.


              Q6 Mr Jackson: May I ask our other two witnesses about something? It is pretty evident from the Report that the drug companies that were looked at could discount some prices for a number of drugs in respect of the Cancer Drugs Fund in order to remain in the fund. That is slightly worrying, because one might say it gives rise to an accusation that they were hitherto overcharging the fund. What do you say to that?

              Mark Hicken: I would say that in the instance of our own medicine, Abiraterone, which is one of the more widely prescribed medicines on the Cancer Drugs Fund, it is discounted from the list price. It is not uncommon in the UK for the NHS not to pay list prices for medicines, not only cancer medicines, but many others. In the instance of Abiraterone, the price paid by the NHS is the same that it pays for the use of the medicine where it is currently NICE approved, which is after men have had chemotherapy. In this instance, it was on the Cancer Drugs Fund because we were in discussion with NICE about its approval for use before chemotherapy. It is available to the CDF at the same discounted price. But remember that that is a discount from the list; it is not a further discount on the medicine price that is currently charged.


              Q7 Mr Jackson: May I come to Roche? The Report says in paragraph 3.10 on page 22 that Roche “supplied the drugs for 24% of the patients supported, reflecting the fact that it manufactures Avastin… the most commonly supplied drug.” I accept that that does cover a number of cancers—breast, cervical, colorectal, gliomas and ovarian—but what would you say to someone who says that there is an oligopoly or a cartel of suppliers? Perhaps you could also address why you and other drug companies were effectively forced to reduce your prices to stay inside the Cancer Drugs Fund.

              Deb Lancaster: I can address that. First, when the Cancer Drugs Fund was first set up in 2010, we offered an additional discount on Avastin right from the beginning. We did that proactively because that we knew that the Cancer Drugs Fund was likely to be a big success and we wanted to ensure that it remained affordable for the NHS. As you mentioned, Avastin does have seven different indications, so it is in effect like seven different drugs. As a consequence, yes, it is responsible for 19% of applications to the Cancer Drugs Fund.


              Q8 Mr Jackson: If one extrapolates that across the five years, it is £968 million, assisting 74,000 patients. That is almost £200 million for one company and one drug.

              Deb Lancaster: It is, but, as I said before, it is really like seven different drugs. One of things that we have to remember is that Avastin is a standard of care medicine in most of the rest of the world, and there is a very high demand from both clinicians and patients for the benefits that this drug can bring for that multiple number of different cancers.


              Q9 Mr Jackson: Mr Kumar, may I ask you to look at page 27, paragraph 4.4?

              Harpal Kumar: Sorry, I don’t have a copy.

              Mr Jackson: Okay. This is about data collection, and I just wonder, in terms of your professional expertise in the charity sector, whether you find it frustrating that the Report says on data collection, to which the Chair has already alluded, that “although all patient records had a treatment start date and a primary diagnosis, many records lacked important data: 70% were missing a final treatment date; 47% did not include the cell type; 52% did not include the stage of disease at the start of treatment; and”—most tellingly and damningly—“93% did not have an outcome summary.” If you don’t look to outcomes, how can you measure the efficacy of the Cancer Drugs Fund?

              Harpal Kumar: Your question is very pertinent. One of the problems with the Cancer Drugs Fund up until now has been that we haven’t collected data on the difference in outcomes that it has made over that period. We know that tens of thousands of patients have accessed treatments that they wouldn’t otherwise have had access to, but we haven’t collected the data that would prove that that has actually delivered a benefit in terms of outcomes.

              Your question has a broader base to it, which is that there are issues around data collection across the entirety of NHS services. We need to improve that. It is being improved, but it’s only really in the past two or three years, for example, that we have started collecting data on the stage at diagnosis. That data collection will hopefully get better over the years ahead. It’s also really only in the last two or three years that we have started to collect data on chemotherapy and the prescribing of different drugs for different indications. Those data are not yet at a point where they are comprehensive enough to be able to do the sorts of analyses that you or I might want to see in terms of the difference they are making. We have to get that right in the next phase. Part of the proposals for how the CDF will evolve are focused on the need to collect data during this period that a drug would remain in the Cancer Drugs Fund. We think that would be a really important development.


              Q10 Mr Jackson: The Cancer Drugs Fund is quite an odd concept in one simple respect. The Report says that 36% of the drugs that are dispensed via the Cancer Drugs Fund are as a result of decisions that they are either too expensive or their efficacy has not been tested. Nevertheless, that is 36% of £968 million, and the public are paying for those drugs. Isn’t that difficulty compounded by the lack of data?

              Harpal Kumar: Whether it is compounded by the lack of data, I am not sure, but certainly the lack of data means that we cannot properly evaluate the effectiveness of that spend. I guess that what is behind your question is the need for the Cancer Drugs Fund in the first place and whether it is appropriate. What it reflects is that we do not, at an overall level, have the same level of prescribing of certainly the newer cancer drugs that many other countries do. We need to understand why that is the case, and there is a set of issues that the CDF was designed to address. One is that it just takes time for NICE to go through an evaluation process that might lead to routine prescribing of a cancer drug. But if you are a patient with end-stage disease, waiting six, nine or whatever it is months for that decision to be made, even though a drug has received its licence, is a long time, and it might make a difference between your getting access to that drug or not.

              So that is one issue. Another really important issue is that, up until now, NICE has only looked at evaluations of drugs that would be appropriate for a certain number of patients, or higher than a certain number of patients, and increasingly new drugs are developed that might benefit only a relatively small number of patients. It might be fewer than 1,500 patients a year, for example, but still very relevant for that patient group. If there is not a NICE assessment of that patient group, there is not a mandate for routine prescribing of that drug, so we need to be able to find a solution to these sorts of problems. That is what the CDF was set up to address.

              Mr Jackson: You have answered my question; I was going to ask about the coverage of rarer cancers. I declare an interest. I am an officer of the all-party group on pancreatic cancer. I am disappointed that pancreatic cancer does not really feature here. I think one of the other witnesses wanted to come in.

              Mark Hicken: If you remember, the purpose of the Cancer Drugs Fund was as an interim measure while there was NICE reform. An important point to raise here is that we have a system that lacks certain flexibilities. So remember what we are fixing here by providing access to these medicines is just levelling the playing field. If you live in another developed country in most parts of the world, you will have routine access to the medicines that the Cancer Drugs Fund provides. The NICE appraisal process does not deal well with truly innovative medicines that do not have lots and lots of evidence behind them. If you have something that is truly a breakthrough that makes a huge difference to somebody with an advanced cancer, you do not have the time to gather lots and lots of evidence to put that in front of NICE. That takes time. So, to go to Harpal’s point, what do you do in that instance? Do you say, “No, we won’t pay for it because we need evidence”, or do you say, as other countries do, “Yes, we will pay for it, and then we will review whether we’ve got good value for money or not after a period of time”?



              Q11 Mr Jackson: The question linked to your answer is: is NICE, as currently constituted, fit for purpose in terms of its capacity, skills, knowledge and ability to do the job?

              Mark Hicken: Yes, on all those issues, but on the process for cancer medicines, you have to look at the number of rejections before the initiation of the CDF. Most of the cancer medicines assessed were rejected in the UK, and they were routinely available in other countries.

              Chair: I think we will want to touch on that.

              Deb Lancaster: I completely agree with what Mark just said. In the main, NICE does a fantastic job. For non-metastatic, non-advanced cancer, it works very well and is seen as a gold standard throughout the world, but advanced cancer is different. It is very, very hard to fit a cutting-edge, high technology drug that is being used at the end of life through the NICE process. That is one area that is different, which is, of course, what bred the CDF. It was seen that it is a different area that needs to be dealt with differently.


              Q12 Chair: May I stop you there? Mr Hicken talked about other countries. What lessons can the UK and NHS England learn from overseas? Presumably, you both have experience of other areas.

              Deb Lancaster: Yes. We have got experience of all the different reimbursement systems throughout the world. We see successful outcomes, in terms of patients getting access to our medicines, primarily where we have got the chance to negotiate. NHS England, by law, is not allowed to negotiate with companies, but when we can sit in a room and talk to the regulators, and both sides can be flexible, that is where we see the patients winning out.


              Q13 Chair: The patients get the drug, but they get it cheaper, according to research by Liverpool University.

              Mark Hicken: That isn’t true. That piece of work, which Andrew Hill of Liverpool authored, was based on list prices. Remember that, importantly, for reasons of commercial and confidence issues, we won’t reveal what the true net prices are to the NHS, but I assure you that the UK does not pay the highest prices for medicines. As for what we can learn, in countries such as France and Germany, when a medicine receives its regulatory approval and is proven to be safe and effective, it is made available routinely to patients who need it. There is an initial negotiation on price and, perhaps a year or two in, a renegotiation based on what the medicine has actually delivered for patients in those countries. That seems to be a better way of going forward.


              Q14 Chair: Deb Lancaster, you were nodding. Do you agree with Mr Hicken?

              Deb Lancaster: Completely, yes.


              Q15 Mr Jackson: One last question for all of you, but particularly for Mr Kumar. The overall rationale for the Cancer Drugs Fund was to try to ameliorate the effects of postcode rationing and to level the playing field. Do you agree that the Report shows that, although things have improved since 2013 when NHS England took over, areas that have existing good commissioning with oncologists attached to a teaching hospital have an institutional advantage over other parts of the country that do not have a teaching hospital or such well-established oncologists and other clinical staff? Therefore, you are always going to have a bit of a disparity, and you can never have a truly level playing field in the dispensing of drugs, particularly for rarer cancers.

              Harpal Kumar: You raise an important problem that is true not just of the UK, but internationally. There is a differential between the centres that are at the leading edge of new cancer developments and the rest of the system. As I say, that is true not just in the UK, but internationally. It is not least a demonstration of the pace of progress we are now seeing that the centres that are at the leading edge stay at the leading edge and the others try to catch up. I don’t think that is a problem of commissioning; it is a problem of the degree to which oncologists in those various centres are up to speed with the state of the art in those different places.

              I didn’t have a chance to come back to you on your last question, which is important. I think NICE has the capacity to do what we are asking it to do, in the context of new cancer drugs. It is the right organisation to be doing the assessments. There are two important things that haven’t come out of the previous answers. One is that, up until now, NICE has essentially been able to go one of two ways. It has been able to say, “Yes, we have the evidence for this drug to be used through routine commissioning,” or, “No, we don’t.” Those have been the only two options available to it. There has not been a mechanism of saying, “Actually, we need to collect a bit more data to be sure.” What is proposed in the new solution that is being consulted on is exactly that third way that would give the time to be able to collect the sort of data that would provide a sounder basis for routine commissioning going forward. That is a really important development. That is the critical point that I wanted to make.


              Q16 Mr Jackson: Anecdotally, it has been described as a car park where no cars ever leave, or perhaps the Eagles’s “Hotel California” where you book in and you never leave. You have various—

              Harpal Kumar: That is why the new mechanism is so important. It would give it a time-limited, managed fund where a drug goes into the fund for a period of time that is agreed up front, and then it leaves the fund at the end of that period.


              Q17 Mr Jackson: Are we shifting the old bangers out? That is the thing.

              Harpal Kumar: That is what I think the new process will address. It has not been addressed in the way it has been implemented up until now.


              Q18 Chris Evans: In Wales, the lack of a cancer drugs fund is seen as a political football. Just the other day, the Welsh Conservatives announced that they would introduce a cancer drugs fund for Wales. As you know, Mark Drakeford, the Health Minister in Wales, has called the Cancer Drugs Fund “unfair, unethical” and “inefficient”. In the wake of a lack of data, is he right?

              Deb Lancaster: It is unfair on Wales in the same way that it is unfair on Scotland and Northern Ireland. In terms of the English system, it is very fair, because it makes sure that patients who need these medicines at the end of their lives can get them, in line with the rest of Europe, but that is only England. We have been doing some work with Wales to copy the systemic anti-cancer therapy database that is being used in England. We are hoping to be able to use that as a mechanism to help improve the affordability of the medicines specifically in Wales. We are doing some work there, and, yes, it is unfair in terms of our total nation.

              Harpal Kumar: Let me make a couple of points. I think we would all agree, and I would certainly say very strongly, that in the way the cancer drugs fund has been implemented up until now, it is unsustainable and not fit for purpose going forward. That is why it absolutely has to evolve. We absolutely have to keep a cap on the budget that is spent on drugs in the Cancer Drugs Fund as we were just discussing.

              The issue is that the different devolved nations have different systems. Scotland has just established a new system and we will need to see how that beds in. With respect to Wales and Northern Ireland, of course they generally follow NICE recommendations and guidance, so there I think it is much more relevant to talk about how the Cancer Drugs Fund would apply.

              If we can get the CDF to a point where it is set up properly, it does the right sorts of assessments in the ways were have just been talking about and drugs stay in only for a period of time and the cost of those is managed, I think it can be a very effective mechanism for making sure that patients get access to the drugs that they should get access to for their condition and that clinicians would indicate would be appropriate. Therefore, something similar for Wales and Northern Ireland would be, I think, appropriate. But it has to be in the context of getting the CDF to a place where it is set up correctly and I do not think that it is at the moment.

              Mark Hicken: I agree with Harpal in all but one respect, which is to say that the CDF has not been well run. That is not necessarily true. I think it has been—

              Harpal Kumar: I did not say that.

              Mark Hicken: Well, I may be paraphrasing—

              Chair: You said that it was unsustainable and not fit for purpose.

              Mark Hicken: I would say that those who have been involved in running the CDF have been trying manage a challenging situation. Remember: this was meant to be only while NICE reform was taking place and what has let them down quite badly is that we have not seen a reform of the NICE process up until now. So has it been challenging? Yes. Has it provided access to life-extending treatments for many tens of thousands of people in the UK who would not otherwise have had them? Yes, it has. Can it improve? Yes. Is it an out-and-out failure? I do not think it is.


              Q19 Chris Evans: The key point that Mr Drakeford was focusing on when he talked about a potential Welsh cancer drugs fund was that it would be unethical because it prioritises cancer above other diseases. That has been backed up by evidence from the Cystic Fibrosis Trust and the Multiple Sclerosis Society. Do you think that because the Cancer Drugs Fund has basically run wild, in terms of the 126% increase in spend, drugs for other serious conditions are losing out? I would be interested to hear from you, Mr Kumar, because you are from that sector. Do you think that other deserving diseases and syndromes have lost out?

              Harpal Kumar: You might expect, given that I run Cancer Research UK, that I would have an interest in what is important to cancer patients. That does not mean I do not have an interest in what is relevant for other patients. Certain things make cancer somewhat unique in the assessment of new medicines. If it’s helpful, I can talk you through some of the things that make it unique. One I have already alluded to. Increasingly, new drugs are developed for relatively small indications, relatively small numbers of patients. If there is not a process by which those drugs can be assessed for routine commissioning, we have a problem. That would equally apply to cystic fibrosis, but there are many other conditions where the patient numbers are much, much greater. It is partly because those cancers might be rare, but increasingly it is also because we subdivide even the common cancer types into what we call stratified populations and they might therefore apply only to a small number of patients. That is a really important issue.

              A second really important issue is that because so many cancers are still lethal, we are increasingly seeing drugs being licensed on the basis of relatively immature data. In other words, we have what is called progression-free survival in a number of cases. That is the extent to which patients have their cancer stabilised by use of a drug; the cancer therefore is not progressing. Increasingly, we are seeing new drugs being licensed on the basis of progression-free survival, but what we do not have yet is what is called the overall survival data—how long did the patient actually live? But most of NICE’s methodology for routine commissioning depends on having that overall survival data, so what do you do in the interim? This is much more true for conditions that are still very lethal, which is the case with many cancers, and much less true for certain other conditions that are not as lethal.

              A third issue, which relates to that, is that if you are starting to see a signal in a clinical trial that something might be of benefit—again, because so many cancers are lethal, you have a situation in which patients are allowed to cross over between the two arms of a trial because it is considered unethical not to give them the treatment that is clearly benefiting patients on the other arm. Again, that presents, for an organisation like NICE, a degree of uncertainty in the data that they have in order to be able to assess whether a drug should be routinely commissioned.

              All these are issues that, while it would be wrong to say they do not apply to other conditions—there are other issues as well—it is the collection of them, their aggregation, that makes cancer more difficult than certain other conditions and that therefore requires an alternative approach. That is why I think it is appropriate to have this approach that says, “Okay. Let’s have a period of time when we can collect the important data that will enable us to establish, as NICE, whether something should be routinely commissioned or not.”

              Chair: I am going to bring in Mr Hicken and Ms Lancaster and then we will hear from Caroline Flint, Richard Bacon, David Mowat and Deidre Brock, so we need to be aware of pace, folks.

              Mark Hicken: That was an excellent summary of the issues around cancer. The bit of evidence that would support all that is the number of rejections that we saw for cancer medicines through NICE; it was disproportionately much higher than for any other condition.

              Deb Lancaster: I agree with that. As a company, we focus mainly on cancer, but we have other therapy areas as well. Metastatic cancer, advanced cancer, is where we see the issues with reimbursement; we don’t have issues elsewhere.


              Q20 Caroline Flint: I want to go back to the absence of data on outcomes over the last five years, since the fund was set up. Harpal, you have been on a taskforce that you said at the outset was looking at the entirety of cancer services, not just the Cancer Drugs Fund. Were you involved at all in setting up the fund and questions about monitoring and data?

              Harpal Kumar: No.


              Q21 Caroline Flint: Okay. That takes you out of that, but could I ask you this? What is your knowledge of the discussions that were taking place when the fund was being set up about the relevance of data looking at the outcomes? Given that this is an incredibly charged area that is emotionally involving for people and given the expectations about what the fund would do, could you tell us a little about the debate at the time about the relevance of actually getting the data to prove one way or another whether the fund was doing the work that it needed to do?

              Harpal Kumar: As I say, I was not involved in setting up the fund at all.

              Caroline Flint: I accept that.

              Harpal Kumar: So I don’t know what conversations were had at the time about the need for collection of data and the evaluation thereof.


              Q22 Caroline Flint: How long have you been at Cancer Research UK?

              Harpal Kumar: Oh gosh—13 years. But we’re not the NHS.


              Q23 Caroline Flint: Did you not make any submissions about what the fund should be doing?

              Harpal Kumar: We have been saying for years that we need to collect proper data on the entirety of chemotherapies prescribed, not just those drugs that were in the Cancer Drugs Fund. As I touched on in answer to an earlier question, it is only in the past few years that we have started to collect data in a systematic way on chemotherapy prescribing. We simply didn’t have that data before.

              Deb Lancaster: I was around at the time that the CDF was set up, and I remember being assured by each of the 10 SHAs that were managing it that the data would be collected.


              Q24 Caroline Flint: Was that in writing or verbally?

              Deb Lancaster: It was verbally. It became apparent after about 18 months that that wasn’t actually happening, because we were hoping to be able to use that data to price by outcome, which would be an amazing way to price our medicines. We then started to work with Public Health England and a number of different trusts to try to validate the SACT database and that work is ongoing. Those data, when they are correct and fully robust, should be able to work really well in monitoring both the Cancer Drugs Fund and the whole of oncology in the UK. It would be a fantastic resource for research.

              Harpal Kumar: Just one other comment. This shines a light on a much broader issue. If you were to look at how routinely the NHS collects outcomes data on many of its interventions, I don’t know whether cancer is particularly poorly served, but I would imagine that it is probably typical.


              Q25 Caroline Flint: From what you are all saying, it was an opportunity to have more rigour in the system that was lost.

              Chair: You’re nodding.

              Harpal Kumar: Yes. One of the strong recommendations in the cancer strategy has certainly been that we need to collect much better data on outcomes and—

              Chair: I think you’re sensing the Committee’s frustration on the data.


              Q26 Mr Bacon: Dr Kumar, as the head of Cancer Research UK, you will obviously have a very clear interest in the money spent on medical research being spent to the greatest effect. Are you aware of the work done by The Lancet in a series of articles on improving value and reducing waste in medical research?

              Harpal Kumar: I don’t know to which specific articles you are referring, but yes.


              Q27 Mr Bacon: I’m talking generally. There is a website,, that collates some of this data. It says right on the front page: “It has been estimated that 85% of research is wasted, usually because it asks the wrong questions, is badly designed, not published or poorly reported. This diminishes the value of research and also represents a significant financial loss.” Now, I am not asking you specifically about particular streams of cancer research or indeed about whether 85% is the right number, but do you recognise that there is a problem here in terms of some money going to research and not being well spent?

              Harpal Kumar: This is a very broad question. I am not sure that it is relevant to the CDF, but—


              Q28 Mr Bacon: My question is not broad. Do you recognise that there is an issue?

              Harpal Kumar: There is some research that is not good research, but that would be true of every field of endeavour. At Cancer Research UK, we ensure that everything we do is fully peer reviewed internationally and is of the highest quality. Could I say that every piece of research done everywhere in the world is of the highest quality and always delivers a result? No, absolutely not.

              Mr Bacon: Mr Hicken, do you recognise that there is an issue here, regardless of whether 85% is the right number?

              Mark Hicken: I’m probably not qualified to comment, so it is better that I don’t.

              Mr Bacon: Miss Lancaster?

              Deb Lancaster: I think it probably depends on which areas of research you are looking at. Research is our bread and butter. It is obviously how we develop medicines for the future, so it has to be right, it has to be published, and it has to be shared with the regulatory authorities. I have worked in pharma for a very long time and know for a fact that a lot of small studies are done by individuals with half a dozen patients in a hospital somewhere and that could well be wasted money. As an aggregate, however, you don’t see much wastage in the large, well-run studies.


              David Mowat: I am very interested in Ms Lancaster’s statement about outcome-based pricing. It seems to me that it would solve a lot of this issue—this issue in its entirety—if you were able to do it. Say, for example, that Roche take a drug to NICE and NICE look at it and don’t do it: for the methodological reasons you told us about, they are not capable of doing it. Previously, it would not have been done at all, but now it may be done under this fund. But if in the first place you just went to NICE and others and said, “Right. We will price this based on outcomes. We don’t know ourselves what they are going to be yet”—because presumably nobody knows entirely—you would fit under NICE’s criteria; you could make it fit under their criteria. No?

              Deb Lancaster: Not at the moment, no, because NICE work to a very strict threshold on cost-effectiveness.


              Q29 David Mowat: Your evidence to us was that NICE have a set of criteria that is uniquely unuseful for cancer. I think that is what you said.

              Deb Lancaster: Yes. If we were able to—


              Q30 David Mowat: I understand the point you made. Outcome-based pricing would not fix that.

              Deb Lancaster: Outcome-based pricing would fix the affordability for the NHS in many cases, but outcome-based pricing would not go through NICE in their current system, because they have a very strict—


              Q31 David Mowat: Why? Because NICE won’t do it, or what?

              Deb Lancaster: I don’t think NICE would be able to do it. You would do it on an individual patient basis, so if it did not work, you would not—

              David Mowat: I suppose what happens, though—

              Chair: Mr Hicken was going to come in on that.


              Q32 David Mowat: Yes, he was. I am just going to follow up on this point. You must have a lot of flexibility about how you price these drugs, because obviously all the money has been spent on the development of them. That is the tough thing; it takes years and years to get them through. By the time you have got that all spent, the actual cost to make them is small relative to what you charge. That is fair enough; that’s the model, but it does mean you have lots of flexibility in how you price them relative to volume. I would have thought you would be looking at all that sort of stuff a lot.

              Deb Lancaster: We look at lots of different flexible ways of pricing our medicines, but just going back to the paid-for R and D and the relatively low manufacturing costs, we have to invest the R and D for the drugs that we are going to launch tomorrow, so Herceptin is paying for—


              Q33 David Mowat: Absolutely, but you still have the issue that you now have this drug that works and that somebody won’t buy. What you charge for it is many times more than it costs you now to manufacture it, but you have a patient on it for—I don’t know—20 years or something. All I’m saying is that there is pricing flexibility there. Sorry, Mr Hicken, you were going to come in on this.

              Mark Hicken: On the point about pricing to outcome or guaranteeing an outcome from a product, we at Johnson & Johnson introduced the first scheme in the UK; it was for cancer, actually. It was called the Velcade response scheme and it guaranteed that if the medicine did not work per the licence or per the expectation, the cost of the medicine would be rebated to the NHS. That was first introduced in 2007. We have subsequently tried to get a number of complex schemes approved through the DH, but we know they are not popular either with what is called PASLU, or the DH.  They prefer simple discount schemes.


              Q34 Chair: Does PASLU stand for something?

              Mark Hicken: Yes, it’s the patient access scheme liaison unit and it is part of NICE. I think you need to ask NICE how many complex schemes are actually approved and make it into NICE guidance in the last three or four years. It won’t be very many.


              Q35 David Mowat: Isn’t the advantage of this pricing method that it transfers some of the risk? It does so partly to you, actually, because if something does not work as well as you hope and say, you do not get as much money.

              Mark Hicken: Precisely.


              Q36 David Mowat: That seems to me to be a win-win that we could develop if we were to do more of that.

              Mark Hicken: And in fact with Abiraterone, which is the medicine currently on the CDF in the pre-chemotherapy space, we have proposed a complex scheme to secure NICE approval. Our experience is that the negotiations with the Department of Health can be quite protracted.


              Q37 David Mowat: Why are they reluctant, given that it presumably minimises their risk potentially? You presumably are willing to charge less in the first instance and then perhaps more, depending on how it works and all that stuff. I would have thought they would have been happy to do that—keen to do that.

              Mark Hicken: The feedback we receive is that there is concern around the administrative burden required to register patients, perhaps to track the outcome and then to report back on the outcome. Always what we hear back is, “Will this require an additional administrative burden on the system?” And if the answer is yes, they generally—


              Q38 David Mowat: Just one final question. Do you make more money on the drugs that NICE reject and that then go into the Cancer Drugs Fund? You must have drug profitability analysis. Do you make more on those drugs?

              Mark Hicken: No—categorically, no.


              Q39 Deidre Brock: With regard to the Scottish situation, there was, of course, a review of the Scottish Medicines Consortium in 2013. It reformed last year, after that review. It now has £80 million in a new medicines fund and it takes patient and clinician evidence as part of its assessment for drugs, which I believe has led to many more drugs being passed for use. I just say that in answer to your comments, Ms Lancaster.

              Further to what Mr Mowat was saying, as part of that review, at a health committee meeting in the Scottish Parliament a professor of clinical pharmacology described pharmaceutical companies as being very secretive about pricing. How can we sure that we are getting the best value for the NHS, for patients and for the taxpayer from pharmaceutical companies, and how can we improve their openness and transparency to the level that we need, to be sure of that?

              Deb Lancaster: As I mentioned earlier, if NHS bodies were allowed to negotiate and we could have flexibility on both sides, that would really help matters. As Mark said earlier, the list price in the UK is not the price charged to the NHS, but there are commercially confidential agreements in place. In the future, with the new CDF it will be up to NHS England to negotiate with us and to show some flexibility.

              Mark Hicken: I would say that the medicines bill is managed very efficiently in the UK. Remember that the £80 million reinvested by Scotland is part of the rebate that the pharmaceutical companies pay back to the Government. We have a pricing agreement, referred to as the pharmaceutical price regulation scheme, or PPRS, in place between 2014 and the end of 2018: it guarantees the overall cost of medicines in the UK. Any incremental spend over that is rebated by all the companies, based on the share of the overall spend that they have. So, there are actually some very tight controls in place to ensure that the UK gets good value from medicine spend.

              What is required, as Harpal referred to earlier and as we would all agree with, is that there has to be a robust value assessment on the way in, but it has to be one that is fit for purpose, and some changes around cancer medicines would make NICE fit for purpose.


              Q40 Chair: Mr Hicken, you talk about good value, but I think I am right in saying that with both your and Ms Lancaster’s companies—certainly, with Roche—when the fund was overspending, the price of the drugs went down to try to keep them in the fund. So you offered a discount to the NHS at that point.

              Deb Lancaster: Where it was possible, yes, but I would like to make the point that right from the start in 2010 we gave a discount proactively on Avastin. In 2013, we gave discounts proactively on—


              Q41 Chair: My point is that further discounts arose at the point when you were in a critical position about whether the drugs that your companies produced—I am not sure if I am speaking accurately about Janssen and Johnson & Johnson, but certainly about Roche—

              Deb Lancaster: Where we could, yes, we did make some further discounts—


              Q42 Chair: You talk about the NHS not having the power to negotiate, but maybe there was not enough giving from the pharmaceutical side as well to keep the costs low enough to ensure that the fund was manageable in the long term. Is that fair comment?

              Deb Lancaster: If we had been able to negotiate from the beginning, then maybe both sides would have had a better deal, but I would like to point out that we gave discounts ahead of being requested to give discounts—and not insignificant ones either.


              Q43 Chair: Mr Hicken, does that apply to you?

              Mark Hicken: As I mentioned earlier, for us in the case of Abiraterone it is already significantly discounted and already NICE-approved for use after chemotherapy; this is simply a matter of having it before chemotherapy. In that instance, there was not any additional discounting offered.


              Q44 Chair: But don’t you get some benefit by testing something with real patients? You will test some of these medicines in other countries, but you have a real patient cohort here to measure, so you would gain some benefit too. Surely, therefore, there should be some further discount to the NHS and the taxpayer for that reason alone.

              Mark Hicken: Bear in mind that with Abiraterone, for example, one of the important things that has not perhaps been mentioned enough yet is that if the standards of care that are routinely available in other countries are not routinely available in the UK, that starts to challenge the view that the UK is a good place to come and do further research. So, we have a follow-on compound in prostate cancer that we need to research. We have to compare it with the standard of care, which in every other country is Abiraterone. If that is not available here, what do we do? So, it is important that the medicines are made available.

              As a consequence of making the medicines available, we currently provide Abiraterone free of charge through a large study run by the Medical Research Council; more than 1,800 patients get it free. One of our other medicines in chronic lymphocytic leukaemia is being given to more than 1,600 patients free of charge, so there are many mechanisms by which we offer something back. And remember, if we do our research in the UK, that is a net positive for UK plc.

              Sir Amyas Morse: Thank you for much for that, Mr Hicken. To understand, though, is there anyone in the NHS—allowing for your commercial confidence—to whom you are transparent about your underlying costs and margins?

              Mark Hicken: On each individual asset or as a company overall?

              Sir Amyas Morse: When you are negotiating deals, I can understand that you don’t want to mention it to everyone, but is there someone you sit down with and say, “Okay, given that you’re such a major customer, we’re going to tell you what it costs us to produce these drugs, so you can satisfy yourself that’s reasonable,” or is that not part of your basis of dealing with the NHS? Just a yes or no answer. I am just curious to know which it is.

              Mark Hicken: It is not, no.

              Sir Amyas Morse: No? All right, so nobody knows.


              Q45 Chair: You talked about the price of drugs. You might be aware of the research by Dr Andrew Hill, a senior research fellow in pharmacology and therapeutics at Liverpool University. He maintains that the NHS is paying up to 14 times more for cancer drugs than in other countries. Is that something either of you recognise?

              Deb Lancaster: No.

              Mark Hicken: No.


              Q46 Chair: Just to give a couple of examples, Imnovid, which is used to treat blood cancer—I don’t think it’s either of yours—costs the NHS £115,000 a year, compared with £90,000 a Spain.

              Mark Hicken: Remember that you are comparing list prices. I wrote to the Daily Mail to request a correction of what is essentially factually incorrect information. If you want to compare list prices, that would be a hypothetical situation. The negotiations that take place across countries are all commercial in confidence. As you can imagine, every authority we talk to asks very similar questions about how best to secure value. Our job as internationally based companies is to make sure there is equity of pricing across those countries. That is what it is we have to do. There are not huge cost differentials—


              Q47 Mr Bacon: Why is that your job? I thought your job was to make a return for your shareholders. It is called a discriminating monopoly. When you can consistently sell into one market at a higher price than another, the rational economic thing is to do that. Why is it your job to secure equity between the different markets? I don’t understand that at all.

              Mark Hicken: I was not suggesting it was my job, or our job; I was—


              Q48 Mr Bacon: I think those were the words you used.

              Mark Hicken: It is our responsibility to make sure that we do not request of one geography, one sector or one country that it pays disproportionately more in order to cover the overall costs of research and development to allow profit, because we are a business that needs to make a profit. We try to ensure there is equity of pricing across geographies.


              Q49 Chair: The problem is that it’s all very secretive and discreet, because of commercial confidentiality. As the Comptroller and Auditor General highlighted, there is a very small group of people who have these discussions with you—we will be asking the NHS about this. We do not know, and the taxpayer does not know, whether or not you are charging a fair price. We get research that suggests to us very big differentials. I will not list it all, but I think some of you are aware of that research. So how do we know? How can you reassure taxpayers that you are not doing that? As Dr Hill puts it, “What the drug companies are doing here is grotesque. The Government should stop giving in to them.” Would you like to comment, Mr Hicken?

              Mark Hicken: Back to the prime point, the pharmaceutical industry has, as I mentioned, guaranteed the overall medicines expenditure through the  pharmaceutical price regulation scheme and the arrangement which runs five years. We are currently rebating, this year, an excess of 10% of all the sales generated in the UK, based on the fact that the medicines bill was a little overspent last year. So, in real terms, the UK taxpayer can be sure that the medicines spend is under control, and we offer an overall guarantee. I think their interests are well taken care of.


              Q50 Chair: The last sentence of paragraph 6.3 of the Report says:  “In essence, this means that any spending on the Fund”—it is talking about the PPRS—“above an agreed amount each year is outside the growth limit for the Scheme and so the pharmaceutical industry would not repay that amount to the Department.” It is a measure of a protection, but it is not wholesale.

              Mark Hicken: Remember that that is the entire medicines bill that the rebate is paid against. The position that the industry took—I am not here to comment for the entire industry—was to say that in order to agree there needs to be a single value assessment; to say that the CDF can’t continue to grow uncontrolled. So, actually, it has been part of the rebate up to now. The comment was that for future years it has to be limited to make sure the spend does not grow out of control. 

              Deb Lancaster: I completely agree with the comments on PPRS. I would also make the point that generally the UK is disproportionately invested in R and D terms. Certainly, to use ourselves as an example, of our £600 million revenue in the UK, we invest almost £400 million in R and D and in the PPRS. So the UK does have a better deal from the pharmaceutical industry generally, because of its good reputation for research.


              Q51 Chair: We will be asking our next witnesses panel about that. Two quick-fire questions, one from me and one from Richard Bacon. On this proposal to change the way NICE works, with a 90-day turnaround for drugs, and to do things slightly differently—I will not go into the detail on that, because you are aware of it—does NICE currently have the capacity to do that? Yes or no? What would it need to do to have that capacity? We will start with Mr Kumar.

              Harpal Kumar: I think the new proposals are a really good step forward, and I would encourage everyone to support them.


              Q52 Chair: We have heard that before. We are just aware of the time. Would NICE have the capacity?

              Harpal Kumar: NICE says it has the capacity. I think you should ask Sir Andrew Dillon that question when you see him in a minute.

              Chair: Okay—on the fence. Ms Lancaster?

              Deb Lancaster: I think you have to trust them that if they say they can do it, they can do it.

              Chair: Trust. Okay. Mr Hicken?

              Mark Hicken: Some parts of NICE appear to be under-resourced for the job. There are 11 or 12 PASLU meetings a year. They review one PAS—one complex scheme. If you really want to push new cancer medicines through NICE, they are going to have to increase capacity in some of their areas.

              Chair: That is very helpful. Thank you very much.


              Q53 Mr Bacon: Dr Kumar, I think I am right in saying that Cancer Research UK is a charity. It is a very important charity, and one of the most famous in the country. What is your total annual revenue?

              Harpal Kumar: It is about £500 million.


              Q54 Mr Bacon: Of that total—plainly, you will have a range of research partnerships, which will involve funding from a series of different bodies—how much comes from the taxpayer?

              Harpal Kumar: Zero.


              Q55 Mr Bacon: Does some of it come indirectly from the taxpayer?

              Harpal Kumar: No.


              Q56 Mr Bacon: None at all? 

              Harpal Kumar: No.

              Mr Bacon: Thank you.

              Chair: Thank you very much to our first panel. You are welcome to stay. Our transcript will be available uncorrected on the website in the next two or three days, and you will have the chance to correct it. We will be issuing our report probably in 2016.


Examination of Witnesses

Witnesses; Will Cavendish, Director General, Innovation, Growth and Technology, Department of Health, Professor Peter Clark, Chair of the Cancer Drugs Fund, Sir Andrew Dillon, Chief Executive, NICE, and Simon Stevens, Chief Executive, NHS England, gave evidence.


              Chair: Thank you very much for your patience. We had an interesting first panel, which you may have picked up on. I am delighted to welcome Professor Peter Clark, who is chair of the Cancer Drugs Fund for NHS England and a consultant oncologist at the Clatterbridge Cancer Centre NHS Foundation Trust in Merseyside—I hope I have got that right, Professor.

              Professor Peter Clark: Very good. Thank you very much.

              Chair: Welcome back to Simon Stevens, one of our frequent fliers. He is chief executive of the NHS.

              Simon Stevens: My weekly visit.

              Chair: He is fresh from Radio 4’s “Any Questions?”. We then have Will Cavendish. You are fast becoming a frequent flier, Mr Cavendish—I think this is your second appearance before us this term. You are the director general of innovation, growth and technology at the Department of Health. We also have Sir Andrew Dillon, who is the chief executive of the National Institute for Health and Care Excellence, also known as NICE. I will hand straight over to Stewart Jackson, who is leading our questioning today.


              Q57 Mr Jackson: Good afternoon, gentlemen. May I begin by asking you a general question about our performance compared with international partners? What comes specifically out of the Report is that hitherto we have lagged behind in the use of new cancer drugs, well below the international average. Why do you think that has been? What evidence is there that we are addressing that issue? Even more generally, why are we still lagging in respect of cancer recovery rates, compared with other countries, particularly in Europe?

              Professor Peter Clark: Thank you for the question. In terms of drugs, there are two key issues about why we are seen to lag behind other countries in Europe. First, we have a very different health technology assessment programme, run by Sir Andrew here, which I have no doubt is the most rigorous of all assessments of the key question that affects cancer drugs: how clinically effective the drug is versus how much extra life and quality of life the extra cost brings. NICE stands on its own, in my view, in the rigour of that process. The consequence for cancer drugs, of course, which generally, until recently anyway, have relatively modest efficacy but are increasingly highly priced, is that they become, or are seen to be, the casualty of that health technology assessment process. So we have NICE, which is very rigorous and few other countries in Europe have such a body, but therefore there are more negative NICE recommendations on cancer drugs, which is why we are seen to spend less on those cancer drugs.

              The other key issue, as you heard from Harpal, is that the problem that bedevils cancer in the UK is late presentation. Late presentation patients are generally less fit; many cancer drugs often require you to be quite fit in order to have them and benefit from them. In terms of the balance between benefit and the side effects of treatment, less fit patients have greater side effects and the balance becomes more finely tuned in patients who present late.

              Those are the two key reasons why we are seen to lag behind European spend on cancer drugs.


              Q58 Mr Jackson: Is that a result of poor diagnosis in the primary care sector?

              Professor Peter Clark: As you have heard from Harpal, it is a multitude of factors. One of the biggest ones, in my personal view, is that patients in England are conservative; they go to their GP late. Yes, there are problems with bottlenecks in diagnostics, as Harpal said, so patients may go along the patient pathway more slowly than we would like, but the biggest problem is getting the patient to the general practitioner in the first place, with a set of symptoms that are recognised and merit rapid referral.


              Q59 Mr Jackson: Does anyone else have any opinions on this?

              Will Cavendish: It is obviously true that there has been an issue historically; that is well known. I think that has been changing in the last period. Partly in preparation for this session, I was looking again at the spending on cancer drugs in the past four to five years, and overall, if you take the spend on cancer drugs in primary and secondary care, it has gone up from about £1 billion five years ago to £1.5 billion now, so that is a 50% cash increase in five years. The latest credible international study, the RAND study, which looked at the performance of England and the UK in different drug areas, generally showed that there has been some catching up in the last three or four years in different areas, including cancer. So looking at drugs that have been licensed in the last zero to five years, the UK is now doing better than it was five years ago—it is not at the top, but it is not at the bottom. So all the things that Professor Clark said are obviously true, but there has been a reasonable uptick in the last few years—


              Q60 Chair: Has it gone up from 11th to seventh? I think I read that somewhere.

              Will Cavendish: I think that that is the overall figure. I cannot remember the exact cancer ranking—

              Simon Stevens: Figure 6 in the NAO’s excellent—as always—Report illustrates the point that we were up from 46% of the average of 13 countries to the 92nd percentile, and that was in 2013. Since 2013, in the following year, there was a 27% increase in the number of patients being funded on the Cancer Drugs Fund anyway, so we might have seen further advances since then.


              Q61 Mr Jackson: It would be churlish not to concede that quite a lot of it has been quite positive. Having said that, you have spent £968 million and treated 74,000 patients, which is great, but again, data collection bedevils the NHS. Data collection, particularly a lack of outcomes focus, is very poor, according to the Report. Assertions were made when the Committee reported in March 2015 that that issue would be taken seriously. Notwithstanding the fact that NHS England has done better in levelling the playing field, the figure on page 27 that I referred to before shows that 93% of patients had no outcome summary in the CDF. When are we going to take data collection and robust methodology seriously to find out whether there is efficacy in this very significant public expenditure?

              Professor Peter Clark: I share your frustration about the lack of many outcomes in the NHS, about cancer outcomes and in particular chemotherapy outcomes. Before I give my answer, I would like to say that we do take seriously the Public Accounts Committee’s recommendations, and in particular the three that you aimed at the CDF outcome data collection process in March 2015. Whenever you look at unselected real-life data about a particular drug in a particular place in a cancer pathway for a particular cancer, the data has to be robust. There has to be a large number of patients and the requisite duration of follow-up, and it has to reflect, in my mind, not just the fancy academic centres that may have more time to collect the data; you want to know what happens to the NHS, so that is in little centres and big centres.


              Q62 Chair: Which one of you is responsible for making sure that data is collected? Is it you, Professor Clark?

              Professor Peter Clark: It is shared between NHS England and Public Health England. I hope my reply will allow that question to be answered. When we publish, it has to be robust data, because we know it is going to be challenged, whether that is by patients, patient groups, clinicians or of course the pharmaceutical industry. The current Cancer Drugs Fund came under the umbrella of NHS England in April 2013. NHS England and Public Health England were brand new organisations, and it took time for them to establish themselves and then start working together. The first thing the chemotherapy clinical reference group for NHS England did once it was established in the summer of 2013 was to ask exactly that question: can we mandate the collection of chemotherapy data outcomes in the chemotherapy contract? The great power of having NHS England have one chemotherapy contract is that you hit all 147 providers of chemotherapy in England. Alas, we were not able to do that until April 2014, as you know.

              Since April 2014, the returns to the SACT office in Oxford have greatly improved, but as you identified, problems remain. Since your Report in March 2015, non-compliant trusts have been subject to leverage by the specialist commissioning hubs in terms of their contracts, so that they can be penalised for the lack of data submission, and non-compliant trusts were also subject to data quality improvement plans.

              To give you a sense of the scale of what SACT has to deal with, in calendar year 2015, 165,000 different patients will have chemotherapy in England. They have an average of five cycles of treatment, so that is 850,000 cycles of treatment that will each create at least 10 data items. So you are talking about 8 million data items. In our keenness to follow your strong recommendation in March 2015, NHS England and Public Health England looked very closely at whether, in the 165,000 patients, SACT could identify the CDF patients easily. For various reasons, they could not.

              After we sorted out the patient confidentiality issues, as the NAO Report describes, NHS England and Public Health England were able in July 2015to sign the data-sharing agreement, which enabled all the CDF patients to be identified, such that SACT now has 63,000 CDF patients on its database. In terms of the mandatory dataset—

              Chair: Professor Clark, I am sorry to cut you off—

              Mr Jackson: It is quite dense—


              Q63 Chair: It has taken five years to get to this point.

              Professor Peter Clark: It has.

              Chair: That is a bit too long.


              Q64 Mr Jackson: Can I ask you to park that? It is very dense, but it is valuable, so would you be so good as to provide a note for us so that we can have a look at that?

              Professor Peter Clark: Sure. The bottom line is that data outcome submission by trusts and analysis by SACT have improved greatly, such that in the next two to three months Public Health England expect to publish outcomes for some CDF drugs, just as they expect to start publishing outcomes for the non-CDF drugs, too. So, has it been frustrating? Yes. Has it taken too long? Yes. But we are getting to the position where those outcome data will be published for scrutiny by you and everyone else.

              Mr Jackson: Thank you for that.


              Q65 Caroline Flint: You have explained what you are doing now. What discussion was there at the time the Cancer Drugs Fund was being established about what evidence would be collected? This was a new fund and there were huge public expectations about what it would deliver, so what discussions were there to try to work through some of the problems that you have done five years later?

              Professor Peter Clark: There were discussions, because at this time the guidance for the CDF was run by the Department of Health, although the implementation was in 10 different strategic health authorities, so they ended up with 10 different cancer drugs funds with 10 different ways of assessing which drugs should be in the fund and 10 different ways of potentially collecting that data.


              Q66 Caroline Flint: So perhaps I can ask Mr Cavendish, because it is a Department of Health issue: given the huge expectations for the fund, why did the Department of Health not knock the heads of the SHAs together to ensure that there was some sort of common collection of data?

              Will Cavendish: Back in 2011, the DH issued guidance to the SHAs about data collection for the Cancer Drugs Fund and that guidance recommended that it cover the eight key pieces of data that are also contained in the systemic anti-cancer therapy database—the SACT database. The issue, though, was that it was not mandatory; it was guidance.


              Q67 Caroline Flint: Why?

              Will Cavendish: At the time, there were a lot of complaints about burdensome cascades from the centre—trusts being inundated with mandatory requests from the centre—so, at that time, the fashion was more for guidance rather than mandation. That clearly led to the situation where there was not consistent data being collected across all 10 areas.


              Q68 Caroline Flint: In the last session, Deb Lancaster, who I understand was involved in some of the discussion around setting up the fund, said that she was verbally assured by SHAs that data would be collected because this is also helpful to the drug companies both in terms of whether their drugs are working and in terms of outcomes having an impact on price. You are saying that because of a worry about over-bureaucracy in regard to setting up the fund, you backed off from making sure that data collection would happen.

              Will Cavendish: That was the reason why it was guidance rather than mandatory—


              Q69 Caroline Flint: So it was about being worried about being burdensome on the SHAs, not about making sure—

              Will Cavendish: Not the SHAs, but the trusts who collect the data. That was the issue at the time. But you have to remember also that these problems laid across cancer drugs across the piece, as Professor Clark was just saying; it is not just about the CDF. Another issue—

              Chair: The CDF has taken a lot of taxpayers’ money.


              Q70 Caroline Flint: The whole point about the CDF is that it was set up because it was felt there were some issues with NICE—I am sure we will come to this—about how people get access to certain drugs. It is an area that is incredibly charged and emotive in many different ways for very good reasons, so you can understand why we are asking the question about why, for a particular fund to meet a particular gap that existed in the health service, you would not from the outset try to have some more effective measures of outcomes, at least in this area.

              Will Cavendish: Indeed. My point was just that the data collection on the CDF was not adequate, but the data collection across all cancer drugs has also not been adequate, as Professor Clark was just saying. That is why we had to address it—

              Chair: We will come back to this point.


              Q71 Mr Jackson: I have to make an observation. Mr Stevens reminds us at every opportunity when he goes on the media about the forward planning in the NHS and the need both to invest properly and to save, because of the demographic changes. There is a significant amount of money just for chemotherapy across the whole NHS, and we probably do not know what that is costing and what impact it is having in terms of outcomes.

              Without flogging a dead horse about the data, can I ask Mr Stevens and Mr Cavendish, is there not a causal link between not really knowing how effective the spending is being and figure 13, which shows a very significant overrun of costs? In 2014-15, we were looking at about a 50% overrun cost to budget—budget being £280 million, costs £416 million. Allowing for the fact that this was just before the general election—we make funny decisions just before a general election and try not to be too controversial—surely the two are linked. If you do not know whether the drugs fund is successful and is making the biggest impact for taxpayer pounds, you are obviously going to have cost overruns.

              Simon Stevens: I don’t think that is the principal reason why there are cost overruns. Professor Clark can describe the drivers around patient volume and pricing inside the original CDF mechanism, but I do think you are right in pointing to the fact that as currently structured, this is not a sustainable vehicle for properly evaluating how potentially important new drugs work in practice. That is precisely why, as you know, we are now at public consultation on a mechanism that I think will be much better. Part of that will be a mandatory data generation to answer these clinical questions about whether the drugs benefit patients or not. If lessons are learned, the new CDF, if that is what we do following consultation, will deal with the issue. Peter, do you want to say a little more to Mr Jackson about the actual drivers of the overspend?

              Professor Peter Clark: You will probably tell me to hurry up too, so please do.

              Mr Jackson: The Chair will, I am sure.

              Professor Peter Clark: The first thing that happened was in April 2013. We had inherited a north-south divide in terms of access to the Cancer Drugs Fund: application rates were twice as high in the south as in the north. The moment we had a single national system for saying these are the drugs that are available, we abolished that straight away. Did it bring the south down? No, it brought everyone else up. It immediately caused a big rise in the number of applications. Add that to the fact that some good, exciting drugs, which are given for longer and have ever-higher prices, came out at a time when, because of those things, NICE was saying no to many of them. This produced a big pressure on the Cancer Drugs Fund, with increasing numbers, increasing durations of treatments and increasing costs—hence the overspend.


              Q72 Mr Jackson: Can I just jump in there, because it comes back to Ms Flint’s interesting question about the genesis of the fund in 2010? To play devil’s advocate, would it not have been better to have said: there are discrepancies and not a level playing field across the country; let’s just take those oncologists who are top of their field and are commissioning cancer drugs well and roll that best practice across the whole country, for fewer pounds than creating a cancer drugs fund, where effectively 36% of the £968 million has been for drugs that are either “too expensive” or have not had their efficacy tested? Couldn’t you have looked at that option in 2010?

              Professor Peter Clark: First, may I correct you? Every single cancer drug that has gone into the Cancer Drugs Fund has an evidence base that has been robust enough for that very group of clinical experts that you have just described to say the evidence for this drug is good enough for it to come into the Cancer Drugs Fund. I do not want anyone to go away thinking that they were drugs of no proven efficacy. Every single drug that went into the fund has had an evidence base.



              Q73 Mr Jackson: The point I am making, which comes out in the report, is that because you have proximity to teaching hospitals, and you have more experience and expertise among some clinical staff, there is inevitably going to be a discrepancy in the prescription of those drugs. That is the issue and surely the reason that the Cancer Drugs Fund came into existence: to get rid of those postcode lotteries.

              Professor Peter Clark: The biggest reasons why the Cancer Drugs Fund came into existence were, first, the public disquiet about the drugs that NICE had deemed were clinically effective but not cost-effective and then, for the rare cancer drugs, NICE at that time, as you have heard, could not appraise everything. There were worthwhile cancer drugs that we knew were clinically effective but we did not know whether they were cost-effective because they had never gone to NICE. Also, there is a small but important group of off-label use, particularly for the rare cancers, where a drug is not licensed for a certain condition but you know that there is a strong enough evidence base to use it for a rare condition. They were, I think, the three main reasons why the Cancer Drugs Fund came into being.


              Q74 Mr Jackson: Sir Andrew, may I ask—[Interruption.] Finish pouring your gin.

              Chair: For the record, it is water, just in case anyone reads the transcript and gets the wrong impression about Sir Andrew’s habits.

              Simon Stevens: Judge by the quality of his answers.


              Q75 Mr Jackson: An earlier witness intimated that the timeliness of research might be impacted by the efficiency of NICE, in terms of processing applications for prescription drugs in respect of the Cancer Drugs Fund. There was some debate earlier about whether NICE was fit for purpose in its present form. How do you respond to that criticism?

              Sir Andrew Dillon: There have been criticisms and questions about whether NICE is fit for purpose for all the 17 years that we have been going. It is not an observation that I make lightly—those challenges matter. Every three years we have gone through pretty rigorous reviews of our methods for looking at drugs and other technologies, to test if there is a better way of doing it and whether the approach that we take is consistent with the ambition that the NHS has for getting access to drugs, including cancer drugs, and all the other treatments that we look at. It is a perfectly reasonable challenge. If there are ways in which we can do better in understanding the incremental benefit that new drugs bring, whether they are for cancer or any other disease or condition, and better ways to assess value for money of those treatments, we would be happy to engage in a discussion about it. For all the years that we have been going, however, nobody has yet come up with a fundamentally better approach, particularly for assessing value for money, than the one that we use.

              The critical point about value for money is not the tool or techniques that you use to establish it, it is what you do with the information. It is not NICE that decides what the reasonable opportunity cost is for the NHS is in acquiring a new treatment. In other words, the point at which the health gain that something new brings in starts to displace more health than we are already buying with existing resources is something for the NHS and the Government, with their stewardship responsibility for the system. What we do is to operationalise that decision. We say that if that is the ambition and the expression of the opportunity cost, here are the mechanism and methods that enable you to convert that into a decision on a case-by-case basis. We can change our approach to establish new value for money but we have to change it only on the basis that it moves to a more accurate approach, with greater consistency with what the NHS itself wants to offer.

              Chair: We will touch on the future in a moment but I am aware that Richard Bacon unfortunately has to leave early, so I will bring him in briefly now on the point he wanted to raise then I will come back to Stewart Jackson.


              Q76 Mr Bacon: Thank you, Chair. I have met Professor Sir Iain Chalmers and Professor Paul Glasziou, who are epidemiologists who have been working on The Lancet studies on research waste and, in particular, on improving value and reducing waste in medical research. I wanted to ask, Mr Stevens, if you are aware of The Lancet’s work?

              Simon Stevens: Yes.


              Q77 Mr Bacon: You are. They say on the front page of their website,, that, “It has been estimated that 85% of research is wasted, usually because it asks the wrong questions, is badly designed, not published or poorly reported”. I do not want to ask you about the 85% specifically, but do you recognise there is an issue here?

              Simon Stevens: Yes. I think all medical researchers do. Not just The Lancet but the BMJ and the major US journals have also been pushing towards mandatory registration and disclosure of trials, so that we don’t get repeated trials or trials that have been funded that are not likely to answer relevant questions. There is a big worldwide movement on the part of research funders and the medical journals that publish the data to deal with that question.


              Q78 Mr Bacon: Mr Cavendish, this may be for you, since you are the director general for innovation. What work is the Department of Health doing in this space?

              Will Cavendish: On improving clinical trials and transparency in outcomes?


              Q79 Mr Bacon: No. Specifically on the waste in research; on “improving value and reducing waste” in the words of The Lancet.

              Will Cavendish: I will not pretend to opine on things that I do not know much about so I will go back and ask that question.

              Mr Bacon: If you could write to us, that would be great.

              Chair: Sir Andrew wants to come in.

              Mr Bacon: Sir Andrew, if you want to answer my previous question from the last time you appeared, which was whether Tamiflu was more efficacious than Lemsip, which you refused to answer, I would welcome an answer even now. If not, you don’t have to.


              Q80 Chair: We are not getting into that. Sir Andrew wants to come in on the point you have just raised.

              Sir Andrew Dillon: Perhaps we could go to the bar to talk about that later. The point I want to make about research is that there is a big issue with research that is not sufficiently targeted to address the key questions that health systems need to answer.

              One of the things we have done is to offer a scientific advice service to drug companies and other technology developers. That has been going for about four years. That allows companies to come and talk to us about the nature of the studies that they ought to be conducting and the kind of economic evaluation that they need to do, in order to provide NICE advisory committees with the information they need in order to make a judgment.

              This is not a back-door way to get a “yes” from NICE, but it is a means for companies to ensure that they do not come to a NICE appraisal committee that says, “Look, if only you had done this kind of research we could have come to a clear conclusion.” The companies would rather it said, “We can come to a clear conclusion because you have given us the data we need.” That is proving to be a very popular service with companies and we are in the process of extending it.


              Q81 Chair: Is it working yet? Are you getting better research?

              Sir Andrew Dillon: Yes, it is.


              Q82 Mr Bacon: Professor Clark, did you want to add anything? The first example that Professor Chalmers and Professor Glasziou quote is actually from a medical researcher who had the condition of myeloma, which is a cancer. They quote him: “Research results should be easily accessible to people who need to make decisions about their own health…Why was I forced to make my decision knowing the information was somewhere but not available?”

              Professor Peter Clark: I sympathise greatly with that view. We have already talked about the key questions that affect the relevant patient pathway in NHS practice. That is fundamental to what NICE needs

              I want to pick up on the wretched state of journals not wanting to publish negative results, because negative results are just as important as positive results. They are not as glossy and they do not hit the headlines. I chair several international trial data monitoring committees and it is a source of great frustration that you know that there are data there, and that a trial has finished accruing and might be quite similar to the one that you are looking at, but you are not able to find anything out, the assumption being, of course, that it was negative.

              Chair: This is an issue we may return to when we look at some of these issues in the new year. That is part of the reason for Mr Bacon’s line of questioning.


              Q83 Mr Jackson: Mr Stevens, we have talked about the cost overrun. There was some disquiet in the Report at the lack of remedial action on that until March 2015, well into the life of the fund. Maybe you would want to reflect on that. I want to ask about a wider issue, which is the role of the drug companies, the pharmaceutical organisations.

              Simon Stevens: Could I just say, Mr Jackson, on the remedial action, that December 2014 is when we first did the delist, and that was obviously preceded by action? When it became clear during the course of the financial year 2014-15 that the fund was headed for a substantial overrun, then the first delist process began. We obviously had a consultation to go through, an appeals process, and the opportunity for companies to lower their prices, so it was March of the following year, as you say, that the impact of it was felt, but it was early on in 2014 that action was taken.


              Q84 Mr Jackson: I concede that. Thank you for clarifying. In terms of the drug companies, we had an interesting discussion earlier for those of us who enjoy economics—or not—about the fact that we do not have perfect competition or perfect knowledge, we do not have access to information in the market, and we possibly have an oligopoly. Is the review of the Cancer Drugs Fund going to take into account all these factors? It seems to me not a coincidence that where the drug companies were effectively threatened with being removed from the list—the fund—they miraculously came forward with discounts. What is NHS England going to do about the whole asymmetry between purchasers and providers of these cancer drugs?

              Simon Stevens: Your analysis is right, and that is what the proposal that we are consulting on for the evolved version—the next version—of the Cancer Drugs Fund is trying to rectify. Just to summarise, although I am sure everybody knows the proposal, effectively NICE will give a preliminary review of all cancer drugs, and then on the basis of the information available at the time of marketing authorisation, provided that that has been supplied by the manufacturers, we will be able to say, “Yes this looks to be a strong product at a price that works, and therefore you are into routine commissioning”; or, “No, this is so way off the mark on either front that nothing in the way of new data is likely to change our mind,”; or—this important third category, which we think will be where quite a number of these new drugs will end up—“This could turn out to be promising if priced appropriately, so here is up to 24 months’ worth of real-world usage under these data-collecting conditions, and on the strength of that we will make a final determination.”

              What that does is to put some of the pricing discipline back into the system, in that there is a NICE assessment, provisionally and definitively, and during the period that the medicine is in the Cancer Drugs Fund, it will, in all likelihood, be reimbursed at less than the price that would eventually occur, given the number of patient months or products that are going to be funded through the CDF. So it is going to be less than if you had a definitive yes while we are all finding out, and I think that is a reasonable compromise to strike.


              Q85 Mr Jackson: Obviously, the NHS is a massive organisation. How are you going to ensure that you have the co-operation of clinicians, who, on a daily basis, are doing a fantastic job dealing with a very difficult situation, as Ms Flint has said, in very sensitive areas with the patients and their families? How will you ensure that they understand these issues and these decisions that you have inevitably got to take? It seems to me that unless you get clinicians on your side, you are not going to make real progress in reforming the Cancer Drugs Fund.

              Simon Stevens: Yes. I will ask Professor Clark in a moment, but my sense is that oncologists are looking for this kind of mechanism to help them generate these data so they can make smart choices; and, more generally, among the group of doctors who treat cancer patients, there is a sense that we have perhaps got a little out of balance in terms of where we put our marginal investment, with a strong thumb on the scale on the drugs. Radiotherapy and cancer surgery will also have a big impact on survival rates and cures, so we have got to have a more balanced view in the round. Peter, do you want to talk about the oncologists’ perspective?

              Professor Peter Clark: The oncologists will be very keen to use these drugs because for many of them, the preliminary data is exciting, they have novel modes of action and they are targeted in terms of how they work, so this translation of understanding how cancer develops into where a drug is going to hit is now in practice. They will be very keen to contribute to what will be a very important data collection exercise. I have no doubt that oncologists will grab their opportunity in the same way as they have grabbed the opportunity for the drugs in the last couple of years in the Cancer Drugs Fund.


              Q86 Mr Jackson: Can I make one final point? One of the most tragic figures that we have ever heard on this Committee is the number of people who present at A&E with advanced cancer. It is a very high figure—in the 40s, I think. If we do nothing else in the next five years or so, we have to drive that figure down, because it is an absolutely terrible tragedy that that happens. 

              Simon Stevens: That is completely right. Delayed diagnosis is a big part of why our cancer outcomes for some conditions are worse. There is a shimmer of good news in that in 2006, I think one in four cancers were diagnosed in A&E. That has now fallen to one in five, so 80% of people are getting proper—


              Q87 Chair: When do you think we are going to meet the target for early diagnosis?

              Simon Stevens: We have a particular issue around bowel cancer and lung cancer, with far too many patients getting diagnosed at stage 3 or 4.


              Q88 Chair: Do you have a target date?

              Simon Stevens: We are going to be implementing Harpal Kumar’s Cancer Taskforce recommendation, which has a whole series of milestones, one of which is moving to a new standard for four weeks—28 days—to definitive diagnosis, a sort of “soup to nuts” standard by 2020.


              Q89 Chair: And that has a date attached to it.

              Simon Stevens: No, that is redesigning the clinical pathways so that patients get that definitive diagnosis and start their treatment quickly.


              Q90 Mr Jackson: Would you be so kind as to write the Committee a note on that, because that would be very helpful?

              Simon Stevens: It is in the Cancer Taskforce report—in Harpal’s report.

              Chair: We probably don’t need the note.

              Professor Peter Clark: Can I add a clinical dimension very quickly? I quite agree that we want fewer people presenting with cancer to A&E, but in the last three years, NHS England has invested heavily in oncologists—called “acute oncologists”, who are people like me, who have big experience in cancer—who spend half their time looking at the patients who have been admitted on the acute medical and surgical takes and triaging them appropriately. What we know is that that has first, reduced the diagnostic time, and secondly, reduced bed usage, as the patients get put into the right multidisciplinary team for their management.

              Chair: We are aware that there are many ways of tackling this, and one of the concerns is that the Cancer Drugs Fund is dealing perhaps more with people with late diagnosis—people with terminal cancer—and if that was resolved, we may have a slightly lower bill.


              Q91Deidre Brock: I have three questions. I am not quite sure which person to address this one to, but at paragraph 2.12, it says that a member of the Association of the British Pharmaceutical Industry went off the clinical reference group for chemotherapy. Can you tell me why that was?

              Professor Peter Clark: Why the ABPI member left?[1]

              Deidre Brock: Yes. I think it was in late 2014.

              Professor Peter Clark: It was because first, part of our partnership working was to get someone from the ABPI in in the first place. The reason why was that the change in the CDF standard operating procedure that Simon has described introduced not only an assessment of clinical benefit, which we had always had, but an assessment of median drug cost. Of course, a lot of that information about the median drug cost is confidential between the pharmaceutical company and the CDF team, because of the deals that we were making. Because a member of the ABPI worked for one of the pharmaceutical companies, he would have been privy to a lot of confidential data about the pricing of potentially competing drugs, which is why he had to step down.


              Q92Deidre Brock: Some people might question why that person was there in the first place, given the potential conflict of interest.

              Professor Peter Clark: We gained an awful lot from going beyond the usual triumvirate of oncologists, haematologists and oncology pharmacists. I think we gained a lot of understanding about how the pharmaceutical industry works, how it prices its products and what kind of arrangements we might be able to enter into, just as we gained from having patients and patient group representatives on the panel too.


              Q93Deidre Brock: Can you tell us who that person was?

              Professor Peter Clark: His name is Dr David Montgomery and he is the medical director for oncology for Pfizer.

              Simon Stevens: Your point, Peter, is that at the point you actually started talking prices, they were not there any more.


              Q94Deidre Brock: Secondly, you have changed the method of reporting the data on the number of patients who are supported by the fund, in terms of their geographical location. It is now reported by location and treatment hospitals, rather by where the patient lives. Can you tell us why you changed that?

              Professor Peter Clark: We thought that was only fair, because the reimbursement goes back to the treating trust. It is much easier to administer because you have the four commissioning hubs operating four geographical areas clearly, and it is much easier if they look after the CDF expenditure within the confines of that geographical region, rather than the previous arrangement whereby if the patient lived in Oxford and travelled to London for treatment, the London people then had to gain approval for the CDF drug from the Oxford SHA. It streamlined the bureaucracy.


              Q95 Deidre Brock: I know there were concerns about geographical variations in access to the fund; how does this enable NHS England to assess whether that is fairer? I know you were aiming to even out the bumps.

              Professor Peter Clark: Again, this is one of the many things we are demanding from the SACT team in Oxford. Part of the mandatory data set is the patient’s postcode, so we can plot all 60,000 patients in relation to their postcodes and their CCGs and for example the deprivation indices of those CCGs.


              Q96 Deidre Brock: From now on, that work will be undertaken? Okay.

              Professor Peter Clark: It will be part of the rolling data returns that SACT will be providing for us.


              Q97 Deidre Brock: Lastly, Mr Cavendish, I know that the pharmaceutical price regulation scheme limits the amount of money paid by the NHS to pharmaceutical companies and thereafter a rebate comes back—that is correct, yes?

              Will Cavendish: Broadly speaking, yes.


              Q98 Deidre Brock: In Scotland, I think that money is put back into the new medicines fund. What happens to that money in England?

              Will Cavendish: In England, that money is handed over in total from the Department of Health to NHS England, and NHS England decides which of its priorities it wants it to fund.


              Q99 Deidre Brock: Might it potentially be of interest to the Department of Health to put that money back into the fund to help fund further drugs?

              Chair: Or to NHS England.

              Will Cavendish: All the money that comes from the PPRS rebate, we forecast what that money is likely to be and we provide that in the NHS England allocation, in total.  So that is really NHS England’s decision. I know that a deal of that money has been used in specialised commissioning, which is the national funding for specialised products, and some of that is for CCGs locally.


              Q100 Chair: Perhaps Mr Stevens could answer.

              Simon Stevens: The situation is as Will describes. The Department of Health takes into account the PPRS rebate.


              Q101 Chair: I think Ms Brock’s point was that in Scotland it goes to the fund, but in the UK it goes back into the general pot.

              Simon Stevens: It becomes part of the total allocation for the national health service.


              Q102 Chair: Have you ever thought about directing it back into the fund?

              Will Cavendish: There is not a top-sliced fund here in the way there is in Scotland. In Scotland, a new medicines fund was set up, as you know, that takes the element of PPRS rebate that comes to Scotland—I do not know whether it is all of it—and puts it into a new medicines fund. That is not the decision we have taken here.


              Q103 David Mowat: This fund was necessary because NICE was not authorising drugs that apparently were being used in other parts of Europe and there was a problem with that, which implies that there was an issue with the NICE criteria at that time. Is that something we are going to fix, going forwards? Sir Andrew, is my assertion correct, first?

              Sir Andrew Dillon: Yes. There were a number of reasons operationally why the Cancer Drugs Fund was thought to be important. At the general rate at which NICE was approving them at that time—and it has remained reasonably consistent—we were able to make positive recommendations about just over 60% of the cancer drugs we look at. That compares with just over 80% of non-cancer treatments. That is the position. There is clearly something about cancer drugs at the time we were appraising them that separated them out from other treatments.


              Q104 David Mowat: That implies a methodology issue of some type in the way you were evaluating cancer drugs, particularly.

              Simon Stevens: Or a pricing issue.


              Q105 David Mowat: I shall come on to pricing; but yes, it could be pricing, you are right. So either methodology or pricing, because it does not fit the criteria.

              Sir Andrew Dillon: On the question of a methodology issue, even before the cancer drugs fund was instituted, NICE had already been asked by the then Government to introduce a more generous assessment, or a more generous approach to assessing cost-effectiveness for cancer treatments compared with non-cancer treatments. So we were already doing that, but despite that, the fact that the additional benefits that new cancer treatments would bring relative to their cost was making it extremely difficult for NICE to significantly change the rate of—


                            Q106 David Mowat: Fair enough, but that raises a question, doesn’t it? Professor Cavendish described your processes as the best in the world and everything else. You have all these extremely good processes, and then along comes a new system that effectively takes things that your extremely good processes were uncomfortable with, or didn’t feel there was value in, and does them anyway. That raises the question why we made that decision—whether it was emotive or political. 

              Sir Andrew Dillon: It was made because it was anticipated that the new process in CDF would be a closer match with the ambition that the new Government coming in had for access to cancer treatment.


              Q107 David Mowat: Yes, but a Government decision is not a clinical decision, is it? I won’t ask you whether you thought it was the right decision, but if your processes, which have been described as the best in the world for getting value for money and all the rest of it, didn’t authorise these products, and another product was superimposed on you, that raises some questions as to why we did this.

              Sir Andrew Dillon: There were, clearly, at the point at which the Cancer Drugs Fund—

              David Mowat: Mr Stevens made the point that it is about price as well as methodology, which it is, clearly, because if you put in the price, the whole thing changes. I am not an expert in this at all, but it seems to beg for outcome-based pricing. You have a product that costs relatively little to manufacture, but a great deal to develop. Companies are getting their money back over the process, and they have great flexibility over what they charge. Presumably, they want to get their product out there to get the volume. Is that something that your group thinks about a lot? It seems to me to be a big win-win potentially.

              Sir Andrew Dillon: NICE has always been concerned to establish what outcomes will ultimately be obtained from a new treatment and to compare those outcomes with those—


              Q108 David Mowat: What I was thinking more about was, if you were actually paying based on outcomes into the future, you could effectively put the risk back on the pharmaceutical companies. You could say, “We haven’t got the proof that this is there yet, but you are telling us it is. Charge us this amount, and we will pay you the extra when we’ve seen it is working.” They are happy, and you are bound to be happy, because you are getting the drugs out. It seems to be such a good solution that it is odd we are not doing this.

              Sir Andrew Dillon: The new Cancer Drugs Fund provides the opportunity—in cases where there is real uncertainty about the outcomes and about the additional benefit that patients can get—to provide some space for the drug to be used for the benefit of patients in the UK for whom it is indicated, but also, in effect, to put the company on notice that we need to gather the data that will allow us to resolve the uncertainty and then make a final decision.


              Q109 David Mowat: Yes, it does mean that the data has to be gathered. What the companies said, or implied, in their evidence—I do not want to put words in their mouth—was that there was a bit of reluctance within NICE to go down this route of outcome-based pricing, for whatever reason. Maybe that was because it was bureaucratic, not clear or whatever. Is that something you would acknowledge?

              Sir Andrew Dillon: We certainly do not regard ourselves as bureaucratic. The point of the process we put in place is to identify for patients what the additional benefit is going to be. Ultimately, we can work only on the basis of the information that companies give us. Companies already have the opportunity to say to us—


              Q110 David Mowat: No, you could work on the basis of the eventual outcomes, with a pricing model that is based on that. That would give the companies more if things are done well and less if they aren’t.

              Simon Stevens: That was the theory, as I understand it, when the Cancer Drugs Fund was originally set up: there would be a short-term thing while this new method of value-based pricing rippled out across all the medical drugs bought by the national health service. It turned out in practice to be completely undoable—utterly unworkable. You can do it for some individual classes of drugs, and for some particular products, but the idea that we can use this as a basis for buying billions of pounds of different medicines is just not there. So if we proceed following consultation—just for the record, we will obviously have to analyse very carefully the range of consultation responses we get, so no decisions have yet been taken about what we will do with the future of the Cancer Drugs Fund—and if a variant or a version of the proposal on the table that we are out consulting on is what we go ahead with, then, exactly you as have described, that is a method for setting a price at the end of the process, based on the outcomes data that have been achieved.



              Q111 David Mowat: But the evidence you have just given me, very strongly, is that when the pharmaceuticals companies told us that they thought we could do more in that regard—

              Simon Stevens: We probably can do more, but we can’t do the whole thing. There was, I think, a rather over-ambitious expectation back in 2010 or 2011—I was not here, but that is my reading of it—that somehow this would be ubiquitous.


              Q112 David Mowat: There is a lot of concern about opaque pricing and different prices being paid in different countries. The drugs companies do not tell you what the figure is because it is commercially sensitive. I suppose one way around that would be for you to go and ask the French, the Spanish or the Americans what they are paying. I don’t think that is illegal and you could get around the market issue that way. Do you do that?

              Professor Peter Clark: Asking is not illegal, but they will be bound by the same confidentiality clauses as we are, so they will not be able to answer the question.


              Q113 David Mowat: So when you buy the drugs, you sign a confidentiality clause?

              Will Cavendish: Yes. The direct answer to your question is yes, we ask that regularly. Many of the drugs are provided in things like patient schemes, which are confidential, so we are bound by that confidentiality just as other countries are, but where we can get transparency on the prices being charged in different markets, we certainly go for that. Can I come back to your point about outcome-based pricing? Not only is there a proposal in relation to the Cancer Drugs Fund for a managed access fund as was just being described, but equally, in the broader accelerated access review, for which the interim report came out a few weeks ago, there is a very significant focus on new models of decision making, including new models of pricing, which could be used for cancer and other drugs more broadly. The wider answer to your question is yes, this issue of innovation coming through and flexible pricing arrangements is very much part of our thinking and we have a very serious programme of work under way to see whether we can move to those kinds of models.

              Sir Andrew Dillon: Specifically on the point about outcomes, there is already a mechanism in place for companies to offer their drugs and for the effective price that the NHS pays to be a function of what patients actually get in terms of improvements to their condition. In about 40% of the cancer appraisals that we do, companies put those proposals forward. So it is not the case that NICE is not interested in outcomes or outcome-based pricing. We are using the mechanisms that we have in place already to enable companies to put schemes forward that effectively set their price against the real benefits that patients get, with real-world experience.


              Q114 Chair: A few quick-fire points from me. Mr Stevens, one of the main points of the fund was to tackle rare cancers, but a very high percentage of the money goes on routine cancers, if I can say such a thing about cancer. You know what I mean—mainstream chemotherapy. Do you think the fund has failed on rare cancers, and how sure are you that the new process being proposed will make a difference?

              Simon Stevens: No, I don’t. I think 70% or thereabouts of the indications supported by the Cancer Drugs Fund are for rarer cancers, but I will obviously be interested in what Professor Clark has to say.

              Professor Peter Clark: I do not think that there should be any difference between a patient who has a rare cancer and one who has a common cancer, and that is one of the achievements of the Cancer Drugs Fund. Provided that the evidence base is there, patients have been granted access whether it is a common cancer or a rare cancer.


              Q115 Chair: The point is that with the more common ones, you are more likely to eventually get agreement from NICE, because there is volume take-up.

              Simon Stevens: Sure, but not in the new CDF. In the new CDF, they will get fair dibs, just like every other one.

              Professor Peter Clark: Exactly, but the whole thing about the Cancer Drugs Fund was that it opened the door to those drugs that had not been appraised by NICE and it opened the door to those cancers that had a relatively small evidence base—very rare cancers. It had a mechanism for dealing with those, too.


              Q116 Chair: Can I again ask Simon Stevens how much the fund has cost so far in 2015-16—this financial year?

              Simon Stevens: I think we are anticipating that the year-end position—I would have to pull out the month 9 or 10 position, but the year-end position is going to be in the zone of £400 million to £430 million, with a central forecast of £410 million. However, as a result of the second delisting we have done, we think we are closer to the run rate budget position of about £340 million, going into 2016-17.


              Q117 Chair: You talk about delisting. Professor Clark, you were making decisions about that delisting. How did you make the clinical decision about which drugs to delist?

              Professor Peter Clark: We had a system that looked at the clinical benefit. We had a scoring system for that and a scoring system for the amount that the drug cost per patient. Drugs that were delisted either were below the threshold in terms of clinical benefit, so it did not really matter what the cost was, and there were other drugs that had greater benefit, but their cost brought their overall score to below the threshold. Those are the drugs that you have heard about, where some manufacturers chose to reduce the cost to bring their drug above the threshold.


              Q118 Chair: That brings me back to the question I asked the previous witnesses. They managed to reduce the costs when the pressure was on. Do you think it shows a failure of the NHS in negotiating the cost in the first place that manufacturers were quite quickly able to reduce the cost when there was a threat of drugs being delisted from the Cancer Drugs Fund?

              Simon Stevens: I think in the early days of the Cancer Drugs Fund, there was not enough of a mechanism in there to drive a value and pricing conversation with the manufacturers. That has changed in the past 12 months or so.


              Q119 Chair: The past 12 months or so?

              Simon Stevens: Since 2014-15 and 2015-16. Going into the evolved version of the CDF, if that is what we do, we will have a really good mechanism for doing that.


              Q120 Chair: Do you think there are lessons for the Department about that kind of negotiation? We often touch in this Committee on negotiation with the commercial sector across Departments. Do you think the Department of Health is falling down on the job?

              Will Cavendish: No. As Simon says, the budget pressures really started emerging in 2014-15. You talked about quickly getting on top of it. It is a very sensitive area, and it has taken a lot of effort and time to develop the clinical protocols, methodologies and consultations. Even now, as Simon was saying, the fund is a little bit out of balance, but I do not think we were slow on that; it was just difficult and careful work that needed doing.


              Q121 Chair: We heard a bit from our previous witness from Cancer Research UK about there being an increasing number of stratified or targeted drugs in future, focusing on the patient’s reception of the drug rather than the drug just being blanketly supplied. Is that something the new proposals will really tackle, and will it save money for the taxpayer as a result?

              Professor Peter Clark: I am sure they will tackle exactly that, because that is where the big exciting arena is for these new cancer drugs. For example, you can have a drug developed for lung cancer that may only be applicable to 5% of lung cancer patients, but all the cancer research is now finding the same target in a whole range of other cancers. One of the things the consultation makes clear is our need to sort out off-label use, because it is quite possible that that drug may have a licence indication in lung cancer while also offering a very valuable tool for a range of other cancers. That is why off-label use, which has been sorted out by the present Cancer Drugs Fund—those lessons need to be swept up into the future.

              Simon Stevens: To be slightly controversial, I would also say there is a growing issue with the pricing of new cancer drugs that every industrialised country is on the receiving end of. If previously you had a single medicine that treated, say, 100,000 patients, and now you have 10 separate medicines that treat 10,000 patients each, it is not going to be possible for healthcare systems to say, “Just because you’re treating 10,000 patients, we can pay three or five times more than we would have done,” because 10,000 patients times 10 is the same 100,000 people.

              That issue is showing up in the United States, which, let’s face it, has the world’s highest prices. It is certainly showing up across Europe as well. The win-win here with the life sciences and pharmaceutical industry has to be to help them take costs out of drug discovery, so that mechanisms like the accelerated access review and so on can enable them to—


              Q122 Chair: We look forward to the outcome of your review, because that will be interesting.

              Simon Stevens: It is not going to absolve us of difficult choices.


              Q123 Caroline Flint: On data collection, all of you have talked about being led by the evidence. Professor Clark, you talked about the delisting of certain drugs, looking at the cost and the clinical evidence there. It still seems to me we are trying to solve some issues here without the reference point of the data that is important to make those decisions. Mr Stevens, as my colleague said, only 7% of records had an outcome summary in 2014-15. What can you do in that particular area to ensure that professionals—I presume they are the ones who have to ensure the data is on people’s records, so that we can look at it—improve on that? When do you think we will see an improvement?

              Simon Stevens: That is what Professor Clark covered quite extensively earlier, in response to Mr Jackson.


              Q124 Caroline Flint: I am not sure we got the answer.

              Simon Stevens: I think you got quite a long answer.


              Q125 Caroline Flint: I do not think we got an answer about the priority of this improvement. I heard in evidence that oncologists and others are really concerned about evidence, but it looks like only 7% of them actually fill in the forms that are necessary for us to pool the information and to see about clinical effectiveness.

              Professor Peter Clark: I think you need to be very careful about what the outcome summary means. In particular, it is a measure of the toxicities of treatment, which has always been one of the most difficult things for any NHS system to collect. Does that mean that it is a whole absence of data—of knowing how long the patient was under treatment for? No. Does that mean that we do not know how long the patient lived? The answer is no. So we know the key things, but there were some issues in that outcome summary which, as I said, are a challenge to the NHS, but would not stop me from knowing how long patients were on that treatment and how long they lived.


              Q126 Caroline Flint: I completely understand the complexity of all this. We have had a huge row in the last year where the public were very concerned about access to their patient records, which could then be used as an evidence base for looking at treatments and interventions. Surely, part of getting the public on our side about this—and I think it is a good idea to have access to this information—is to make sure that the professionals are confident about what they are asking for and what they are doing. You cannot argue for patients to open up their record if, on the one hand, you are saying that, and on the other, professionals are saying, “It is not really that good anyway, because it doesn’t cover this, that or the other.”

              Laura Brackwell: You said, “on the date of death”, and I am looking at the data we have got on that. According to the data, only 18% of records in 2014-15 had the date of death. Am I misreading that?

              Professor Peter Clark: No, that is data submitted by the trust. It may only be less than 100% because patients are still on treatment, but the date of death is got from a different dataset.


              Q127 Chair: I think you have picked up the Committee’s concerns about data. The Comptroller and Auditor General has some questions.

              Sir Amyas Morse: You very eloquently explained the quality of data fields you need to able to make pricing decisions based on outcomes. Even if people start doing it properly, how many years will it take before you have a reliable dataset? It is not going to happen immediately the first time people fill it out, so how long will it be before you have a reliable data matrix that you can look at and say, “This is how we should price these drugs”? How many years will that take, starting from now?

              Professor Peter Clark: In terms of all the patients having chemotherapy in the CDF, I think that is imminent.

              Sir Amyas Morse: Can you help me with “imminent”?

              Q128 Chair: In the civil service, imminent might mean several years.

              Professor Peter Clark: Because of the mandatory stipulation in the contract in April 2014 and the contract levers that NHS England is now vigorously working to improve those data returns, I think that 2015-16 will see a dramatic rise in improvement in those data returns, such that in the next financial year, 2016-17, we will have data systems that I am confident will not only be delivering data about non-CDF patients—the 165,000—but CDF patients and, of course, new CDF patients too.

              Sir Amyas Morse: So you think it will be possible to price by 2016-17, based on outcomes?

              Professor Peter Clark: Data will be submitted by 2016-17, but it will take that data time to mature.

              Sir Amyas Morse: How much longer will it take to mature?



              Q129 Chair: When will it be useful?

              Simon Stevens: Let me be clear about what we are and are not pricing. For cancer drugs in routine commissioning, we have a reimbursement mechanism and a PPRS. There are no proposals to change that. For drugs in the new CDF, we will have data because, as a condition of entering the conditional funnel through CDF, they have to produce the data to the satisfaction of NICE, such that they can then make an outcomes-based pricing decision on the back of it. How long that takes will depend on the individual drugs or indications. The expectation is that it will take up to 24 months to generate those data for the new products that are put into CDF.

              Sir Amyas Morse: So it will be about 3 or 4 years.

              Simon Stevens: No, I don’t think that is right.

              Sir Amyas Morse: You start pulling it up, and then it is 24 months—

              Sir Andrew Dillon: As the new Cancer Drugs Fund comes into operation from next April, there will be a cohort of drugs in the scheme at that point, together with new ones coming in. All those drugs will be subjected to the data collection exercise that Peter has talked about, so we are collecting data immediately. In the process, as you have read, after a maximum of two years—it could be earlier—NICE will take another look at all the available data. That might be clinical trials that are conducted somewhere else in the world, clinical studies conducted in this country, and the SACT data. All that data will be brought together. The SACT data itself is not the difference between being able to progress towards outcomes-based pricing; it is a helpful addition. It will start being applied to and collected from next April.


              Q130 Caroline Flint: In terms of what Mr Stevens has just said about what will happen now about data collecting going forward, was it a mistake that this was not thought through at the outset of the Cancer Drugs Fund?

              Simon Stevens: I think the Cancer Drugs Fund was designed at the time to deal with a problem, which in some ways it has dealt with, with over 80,000 people having been successfully treated. But it is clearly not—


              Q131 Caroline Flint: And a lot of public money.

              Simon Stevens: Quite a lot of money, but we do not think this is the optimal evolution of the mechanism. It filled the gap, pending a proposition—


              Q132 Caroline Flint: If you had your time again?

              Chair: Just answer Ms Flint’s question.

              Simon Stevens: I wasn’t there at the time.


              Q133 Caroline Flint: Well no, but with all your experience of the health service, if you had been there at the outset, is data collection for evidence of effectiveness in pricing something that you would wish to have seen?

              Simon Stevens: Clearly.


              Q134 Caroline Flint: Right. May I ask one more thing? When is bowel cancer screening going to be rolled out across England?

              Simon Stevens: We will be responding to the Cancer Taskforce report. One of the recommendations it makes is on the various modalities that we should be adopting, based on the national screening committee, as you know from your previous—


              Q135 Caroline Flint: It is available in some areas, but not in others?

              Simon Stevens: Sure: so we have to roll out a programme. In the case of bowel cancer, we have the original faecal occult blood test, which is offered every two years, and the new bowel scope screening programme for 55-year-olds, which is being rolled out. The bowel scope screening has been rolled out to 76% of centres and we are on track to open all centres in England by the end of next year. More than 50,000 55-year-olds have been screened so far.


              Q136 Caroline Flint: A relative of mine went to their GP in south Yorkshire and was told that it was not available in their area because they are not being paid for it.

              Simon Stevens: They might be one of the 24% of centres that has yet to open, but that should be open, according to this briefing, by the end of 2016.


              Q137 Chair: That is quite a long time to wait. I have one last question, Mr Stevens. We touched earlier on the target between GP referral and decision to treat. The target is 95% by 2020. Are you confident that you are going to meet that target?

              Simon Stevens: We certainly want to meet it, and we have a lot of work to do in order to meet it, because, among other things, we have to expand endoscopy capacity. There has been a big increase in the number of people being referred, including, as Ms Flint has just said, for bowel cancer. We want more of that. We need a big training programme for more nurse endoscopists. We have another 200 to 300 in the pipeline, but unless we expand the endoscopy capacity we will not meet that 28-day target.


              Q138 Chair: In Denmark people swallow a camera pill, which seems to make things very effective. I don’t know the cost of that. Are you confident you are going to meet the target? You say there is a lot to be done. It is a target for a reason.

              Simon Stevens: Exactly, it is a clinically-grounded target that we are committed to.


              Q139 Chair: Are you on track now?

              Simon Stevens: It is a few months since the taskforce published its report. We need to mobilise in order to do so.


              Q140 Chair: We will come back to you on that one. Mr Stevens, you said in a muted way that lessons can be learned from the Cancer Drugs Fund, right at the beginning of this inquiry. I think we would say quite expensive lessons can be learned. The overall message seems to be that sorting this out has taken five years—well, it is not even sorted out yet—from when the Cancer Drugs Fund was set out. It begs the overall question of how long it takes the NHS to reform something. It seems to take three or four years before the problem is recognised and acknowledged.

              We expect as a minimum with the new proposals—you will read our Report when we finally decide what to put in it—that clear objectives need to be set from the beginning and necessary data. We have heard a lot of the Committee’s concerns about that. The budget needs to be managed much better and the drug company negotiations need to be more effective. Do you agree with any of that?

              Simon Stevens: Some, but not all. From the get-go, five years back, there was a problem that needed to be solved. When the thing was first set up, in its first year of operation it dealt with 3,000 patients, and 12,000 patients the year after. In 2012-13 it was 15,000 patients, and then 20,000 patients. It has been a victim of its own success, in that sense. There were more patients coming through, more expenditure and, as a result, a need to drive a different mechanism to use the money wisely.

              I think it would be a rewriting of history to suggest that there was a budgetary problem in the early stages of the fund; I do not think that there was. In fact, there was an underspend, which was deployed on boosting radiotherapy equipment, because it was not receiving sufficient applications for the budget to be fully deployed.

              Chair: Perhaps the problem was not dealt with quickly enough when it arose, but we can touch on that, I am sure, in our Report. Thank you very much, all four of you, for your time. Our uncorrected transcript will be on the website in two or three days’ time, and our Report will be published at some point in 2016—hopefully in the first couple of months.



              Oral evidence: Cancer Drugs Fund, HC 583                            15

[1] Professor Clark should have said “left the CDF panel”. Deidre Brock had said that the ABPI member left the clinical reference group for chemotherapy. To clarify: the ABPI member was on, and therefore left, the CDF panel, not the CRG itself.