NPC Archive Item: Getting better value from the NHS drug budget

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11 January 2011

A BMJ article proposes innovative ways of restructuring healthcare prescribing to get better value for money from the NHS drug budget, and encourages pharmaceutical companies to research more innovative medicines. It suggests that more efficient use of the most cost-effective medicines could save the NHS more than £1 billion per year.

What is the purpose of this article?
In view of current financial constraints within the NHS it is important that health professionals continue to review and amend prescribing practices and policies to ensure that drug budgets are used efficiently without compromising quality of care. The proposals in the BMJ article suggest some radical prescribing, financial and regulatory reforms are needed to achieve this (see below). However, as pointed out in an accompanying commentary the changes suggested are challenging and implementation may not be straightforward. Furthermore, they are suggested at a time when the organisations needed to implement the changes are undergoing major structural reform.

What actions can be taken now?
Whilst some of the financial and regulatory recommendations would require high level policy decisions, there are recommendations in this paper on choice of medicines, many of which mirror those already in the NHS ‘Quality, Innovation, Productivity and Prevention (QIPP)’ programme. An initial document prepared by the NPC and Department of Health, published in July 2010, includes recommendations covering 15 therapeutic topics. This is available for download from the NPC website.

What does the BMJ article propose specifically?
The authors of this article point how most new drugs fall into the category of “me too” drugs, and the NHS spends billions of pounds each year on them, even though they often have little or no incremental value over alternative agents.

They state: “Effectively, the NHS is rewarding the drug industry for poor investment and creating a disincentive for risk taking and genuine innovation. When resources are limited, giving one patient an expensive drug with no added value when cheaper alternatives exist stops other patients getting treatments they need”.

“Reducing spending on medicines with no added value would free up money to spend in other areas of need and provide incentives for the drug industry to invest in the right places.”

The article proposes the following prescribing reforms:

  • Scrutiny of high spend drug classes (>£100million/year) — when generic (or pending generic) alternatives exist, NICE should assess their cost effectiveness in collaboration with professional societies. This extended NICE remit should have equal priority to the existing remit of assessing new therapies
  • National generic first prescribing policya mandatory generic first line policy for new prescriptions in the NHS but with systems for occasional exemptions and exceptions
  • Generic anticipation policy — where no generic exists, default prescribing of the drug that is due to come off patent first, unless the later drug is more cost effective or has specific clinical advantages
  • National therapeutic switching programmes across the board switching to generic drugs. Five types of switching are proposed:
    –  Therapeutic substitution — e.g. losartan instead of branded angiotensin 2 receptor antagonists
    –  Reduced prescribing of combined formulations — e.g simvastatin/ezetimibe or angiotensin/diuretic combination switched to individual products
    –  Active enantiomer to racemic mixture substitution — e.g. esomeprazole to omeprazole; escitalopram to citalopram
    –  Rationalisation of unnecessary modified release preparations — e.g. standard release metformin rather than sustained release formulations
    –  Generic substitution — e.g. non-proprietary clopidogrel instead of Plavix®

Examples of high spend drug classes suggested by the authors as means to make potential savings are shown in Table 1.

The NPC generally supports the principle of prescribing of traditional (usually generic) drugs over newer (generally branded) drugs where there is insufficient evidence for a clinically significant benefit  The QIPP programme also supports many of the other suggestions in the document, for example, with regard to the recommendations regarding the prescribing of statins, ezetimibe, renin-angiotensin system drugs, PPIs, and clopidogrel, as reflected in our QIPP document.  However, in some other circumstances, the use of the lower-cost medicines may be easier when initiating drug therapy with a particular class of drug, rather than changing a patient’s medicines when their condition is already being managed and is stable. Some of the switches suggested in the BMJ article may therefore be more difficult or may not be appropriate for individuals.

For example:

  • Prescribers need to be aware of the very different evidence base for tiotropium▼ and ipratropium. Prescriber’s should follow the NICE Clinical Guideline for the management of COPD with regard to the use and choice of short- and long-acting anticholinergic drugs.
  • Although a switch from candesartan to losartan may be considered to have little risk for a patient with essential hypertension, those risks may be higher for someone with, say, heart failure – not least because of the uncertainty regarding dose equivalence.
  • Switching between oxycodone or buprenorhine to morphine may also not be straightforward; and is clearly not appropriate when a patient has been successfully switched previously from morphine as a result of adverse side effects.
  • Although there may be little to choose in effectiveness at the population level between lower cost antipsychotics, such as risperidone▼, in the treatment of schizophrenia, this may not be the case for individual patients, and the side-effect profiles of antipsychotics differ considerably. Switching someone to risperidone▼ who has been stabilised and is relapse free on a branded antipsychotic may require very careful consideration.

Further information on these issues can be found in the appropriate  therapeutic floors of NPC.

Table 1. Examples of high spend drug classes (reproduced from the BMJ article)


a1=generic substitution,

2=therapeutic switching, 3=generic anticipation, 4=modified release rationalisation, 5=combination therapy rationalisation

bIncludes fixed dose combination to individual inhalers and non-generic corticosteroids to generic beclometasone

cAtorvastatin 10/20mg or rosuvastatin 5/10mg) switch to simvastatin 40mg; rosuvastatin 20/40 and ezetimibe to atorvastatin (at post 2012 estimated 25% cost for atorvastatin)

dAll angiotensin receptor blockers to losartan 100 mg

Calculation is of switch non-generics to average of seven in-class generics

eAll non-generics or high tariff generics to amlodipine

The following financial and regulatory reforms are proposed:

  • Zero cost generics key generic drugs (e.g. simvastatin▼*, losartan) that have branded equivalents with no added value should be centrally funded, making them zero cost for prescribers (hospitals, general practitioners, primary care trusts), or with no prescription charge, or both. These drugs would be free from the day of patent expiry, which would encourage generic anticipation and make the development of “me too” drugs less attractive
  • Central funding of NICE decisions savings from the prescribing reform would be used to centrally fund NICE decisions, making local budgets more predictable and explicitly linking prescribing reform with resources for new drugs in areas of need
  • Reassessment of NICE threshold for approval to incentivise genuine innovation, the NICE quality adjusted life year (QALY) threshold (currently £20,000 to £30,000 /QALY and higher for end of life treatments) could be increased to the higher end of life threshold for all innovative treatments.

*Note: The MHRA has advised that the black triangle (▼) refers to intensive monitoring being requested only when simvastatin is used in children and adolescents (10–17 years), in line with the recently licensed paediatric dosing recommendation.


Moon JC, et al. Getting better value from the NHS drug budget. BMJ 2010; 341:c6449

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