The Friday Blog: A Dose of Unhealthy Economics
Greetings and a very happy Friday to you dear reader. I trust your preparations for the big day are well and truly underway because there is not long to go now. In fact, there are only another two editions of this stuff and nonsense before your blog artist puts his feet up for a few weeks into 2026. On that note, a big thank you to Jacob Lant who sat in last time and reprised some of the messages he delivered at our excellent annual conference last month. Our relationship with patient facing organisations is a precious one and helps us ensure that our policy advocacy always supports the most important actor in health and care. I would encourage you all to make sure you are connected with the appropriate ones in your spaces as well as the umbrella groups like Jacob’s National Voices and The Patients Association.
We were back on the history trail last week lest Daughter used two days of teacher training for anything other than highly focussed A level studies, and a grand trip it was too. My relationship with Airbnb is a bit like the one I have with Uber. There is something that makes me not want to use it, but not to do so is to wilfully disadvantage oneself. And when it works well, and, to be fair, both platforms often do, I try to get over myself a bit and recognise that it really is a very good use of modern technology. Besides, when it comes to accommodation I leave it to Daughter. She has an uncanny habit of finding us amazing places and this one was no exception, securing us the use of a converted boathouse on the Thames at Hampton Wick. Admittedly the weather was not entirely conducive with making the most of the outside decking areas, but just sat inside with a cuppa watching the water world go by was a decent enough way to spend a couple of mornings. Swans and scullers alike, the river was a constant passage of wildlife and crafts of all shapes and sizes, with occupants to match. The RNLI even put on a drill outside our window on Saturday.
History came in the form of Hampton Court Palace and Ham House as we tried to add some Technicolour and Surround sound to what might otherwise be rather drab and dull syllabus text. Unfortunately, personally I cannot tell you much about either, Hampton Court in particular was perhaps the most dog unfriendly attraction we have ever visited. We did not realise quite how unfriendly until after I had parted with an eye watering amount of money to gain admission. Still, the girls soldiered on, their interest piqued by the purchase of a Tudor Rose bauble for the tree (see above). That left dog and I to spend an hour or so up and down the Barge Path before repairing to the excellent Mute Swan Public House adjacent the Mitre Hotel where I had stayed on my last visit some 30 years ago to attend a wedding in the Place grounds. After a very pleasant lunch the girls returned to take a turn around the ice rink in front of the main house, which we all agreed was a cool Mother and Daughter thing to do, and a fine way to start our Christmas celebrations. That left me with the dog again, although our risk assessment had concluded that having both family drivers undertake a hazardous activity simultaneously was probably not a good idea. We then enjoyed a highly atmospheric hour’s stroll back along the Barge Path as darkness descended, made all the better by our dinner destination, The Foresters Arms. A bit like the King’s Head in Worcester I told you about in the summer, the Forester’s is the sort of local you want at the end of your street. Lively, welcoming, great staff and serving unfussy, good, honest pub food. My old school mate Tommo made the journey along the Thames from Chiswick to join us for dinner on Thursday and had what he described as “the best pie I have ever eaten.” And Tommo is a Lancashire lad so knows about these things. The other big plus was that it was a dog friendly location. And proper dog friendly. Rottweiler friendly. Some places claim to be, for example Hilton Hotels, but it turns out they apply a weight limit such that if your pooch will not fit into a handbag, it is not coming in. The Foresters delivered again, loads of space, dog bowls delivered and plenty of fuss. Happily, our gorgeous young Neavh played her part and did not eat any children.
The big news on my return was the announcement of the UK / US medicines deal on Monday. Well, not just medicines actually as it happens. I must admit I had no insights that it was coming, but got frantic notes from officials about 1.45 asking if we had spoken to Downing Street as we were on a long call list to get the heads up before the White House made its announcement 15 minutes hence. I was interested about how it was billed, big trade deal which would make the UK a more favourable environment for the pharma industry, including zero tariffs for medicines. Actually, there was a bit in it for us, given we were facing a Section 232 Inquiry which could have slammed any amount of additional import charges on top of the existing 10%. It was good news, but we will continue to advocate for the elimination of tariffs altogether which would bring us into line with pharma. As with all of these things what we have seen so far are just announcements and positive PR notices, and we will have to wait until all this is written down to make sure we have got what we think we have got.
The other bit of it was, of course, the news that NICE was going to increase the QALY thresholds at which it considered medicines to be cost effective. Quality Adjusted Life Years are a way of attempting to compare one technology with another whatever the disease area and whatever the intervention (see below). Whilst this was reported as being very central to the deal, it was always going to happen as part of the ongoing ruckus over drug pricing. Once the Government had indicated it was going to move in response to the removal / withholding of investment by big pharma, it was just a case of how it would be done. Shifting the thresholds so NICE says yes to more expensive medicines was always a likely route, but it does bring with it a number of questions. Will it apply retrospectively to medicines that had not previously passed muster, will those medicines need to be reappraised or is it just bad luck if you have one that got turned down under the old rules? The official blurb from the Institute suggests the latter, with the new arrangements kicking in from April 2026. Also, in said blurb, it was reported that NICE currently says yes to 91% of the medicines it appraises, so it does beg the question as to how much difference it will actually make (3 -5 new ones on top of the current 70 says blurb). Another question everyone is asking is why, given there is no money to implement the 10 Year Health Plan, fix the roof or pay the doctors, are we doing this now, and will the anticipated additional cost (£3Bn) just make matters worse? Well, it will if it costs £3Bn, obviously, but there might yet be a kicker. Back to the official blurb again.
“As part of today’s announcement, we welcome the government’s support to use a new value set for valuing health-related quality of life. The value set comes from asking thousands of people from the public to judge how good or bad different health states would be. These are then used to calculate numerical values, which help healthcare decision-makers compare different treatments and understand their impact on health-related quality of life.
We will introduce the new value set for use alongside EQ-5D-5L following peer review and publication. This change may additionally impact the cost-effectiveness of medicines.”
So, this is what most interested me in all of this. I once wrote a piece called “Not very Healthy Economics.” It was a probably unnecessarily candid reflection on my experience serving on NICE’s Technology Appraisal Advisory Committee, and how the committee used the cost effectiveness data it was presented with. I reasoned that the people on the committee were, mostly, classically trained scientists, and probably regarded the discipline of economics generally, and health economics (actually largely pharmacoeconomics) specifically as pseudo-science. That is if they actually knew anything about it, or anything about the methodologies being used to produce the information on which decisions were based. This is where the EQ-5D-5L stuff comes in. The EuroQuol, 5 Dimension, 5 Level questionnaire is a tool used in cost utility analysis, which is what health economists use in NICE appraisals (cost effectiveness analysis is actually something else). The tool is used to assess quality of life in people of varying health states from being in perfect health (rated as a 1) to being dead (rated as 0). Although actually it is possible, some would argue to record a value of less than 0 if you have a really nasty condition. Determining these values is done by asking lots of people what they think about their health and what they believe it might be with certain conditions. You can also ask people with certain conditions about how they rate their quality of life. EQ-5D-5L is not the only show in town, and the type of questions asked is not the same in every tool that has been developed, and some like EQ-5D-5L have been developed in general populations (in this case across multiple European countries) and some have been developed in disease specific populations. That means that QALYs derived using one methodology in one population are probably measuring something fundamentally different from QALYs derived using a different methodology in a different population. This is another point I wrote in my unnecessarily candid article, suggesting most of my fellow committee members would have no idea about this nuance.
I started thinking about it this when Roy Lilley suggested that one way we can avoid spending all the money on drugs was for NICE to cheat and decide that the new medicines being appraised next year were not cost effective even with the new thresholds. And then I read the official blurb “we welcome the government’s support to use a new value set for valuing health-related quality of life. The value set comes from asking thousands of people from the public to judge how good or bad different health states would be.” A point of contention is the generalisability of quality of life measures generated in one population and used in another. Remember EQ-5D-5L comes from multiple European countries, but this sounds like we are coming up with a UK population-based value set. And what if our British stiff upper lip really is a thing. We would rate health states as not being all that bad versus those moaning minnies on the Continent, so the impact of a new expensive medicine would be less in Stoke-on-Trent than it would in St. Tropez. Which is why the official blurb is saying “This change may additionally impact the cost-effectiveness of medicines.” And that is a conspiracy theory if ever there was one. I thank you.
And finally, today is the anniversary of a momentous day in my life, a real seminal moment. Exactly 45 years ago today my dear old Mum and I, God rest her, were at the Floral Hall in Morecambe. We had gone to see, live on stage, a man who after a decade in the business had finally had some minor chart success, but was just a few months away from exploding into the most successful recording artist of the decade. You will be hearing him an awful lot over the next three weeks. Geddon Shaky.
