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European Perspective on the Costs and Cost-Effectiveness of Cancer Therapies

Michael F. Drummond, Anne R. Mason

From the Centre for Health Economics, University of York, York, United Kingdom

Address reprint requests to Michael F. Drummond, PhD, University of York, Alcuin A. Block, Heslington, York, United Kingdom, YO10 5DD; e-mail: md18{at}york.ac.uk

In Europe, the vast majority of the costs of cancer therapy fall on third-party payers, normally the government, or sickness funds. Therefore, the main focus of cost-effectiveness studies is to assist payers in deciding whether new therapies are worthwhile, despite their high cost. Drug budgets are regulated in most European countries. The main form of central control is price setting, with some form of reference pricing being the most common approach. This sets the price of drugs, either to an international standard, or to a common price for drugs in the same group or cluster. At the hospital level, the main control over cancer drugs is the hospital formulary. Studies have shown a wide variation among European countries in access to cancer drugs. Explanations for these variations include differences in research funding, the drug approval process, the role of health economics in decision making, and budgetary issues. Several countries in Europe now require economic data in making decisions about the reimbursement of new drugs. An examination of decisions made by the National Institute for Health and Clinical Excellence in the United Kingdom suggests that cancer drugs have fared quite well, with most recommendations being positive. This could be because of the seriousness of the health condition and the lack of alternative therapies for some cancer patients. If the policy of requesting cost-effectiveness evidence for pricing and reimbursement decisions becomes more popular, a major implication for the pharmaceutical industry is that studies should be conducted during phase III of clinical development to generate the required data.

Authors' disclosures of potential conflicts of interest and author contributions are found at the end of this article.

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