Health Policy AnalysisA Tale of Two Thresholds: A Framework for Prioritization within the Cancer Drugs Fund

BackgoundThe Cancer Drugs Fund (CDF) has been the subject of controversy since its inception, with critics arguing that it creates a “backdoor” to the National Health Service (NHS), circumventing the National Institute for Health and Care Excellence and its health technology assessment program. Nonetheless, with its creation comes a new decision problem, how to best allocate resources among cancer drugs.ObjectivesOur objective was to estimate CDF's willingness and ability to pay for cancer drugs, providing guidance regarding where CDF funds are best spent, and determining the number of NHS quality-adjusted life-years (QALYs) displaced through the existence of the fund.MethodsUsing CDF utilization figures, cost-per-QALY, and treatment episode costs from National Institute for Health and Care Excellence health technology assessment reports, the league-table approach was applied to determine appropriate cost-effectiveness thresholds to inform the CDF's decision making.ResultsThe CDF exhibits a willingness-to-pay value of £223,627 per QALY, with 74% and 33% of expenditure for drugs with incremental cost-effectiveness ratios of more than £50,000 and more than £90,000, respectively. During 2013-2014, CDF expenditure generated 4,677 QALYs, compared with a potential 13,485 if the same funds were used as part of routine NHS commissioning, displacing 8,808 QALYs. By ring fencing 10%, 25%, and 50% of the CDF budget for the provision of unevaluated drugs, cost-effectiveness thresholds of £149,000, £111,400, and £68,600 were calculated, respectively.ConclusionsAdopting the proposed framework for CDF prioritization would result in disinvestment from a number of highly cost-ineffective drugs applicable for CDF reimbursement. The present lack of a formal economic evaluation not only results in net health losses but also compromises a founding principle of the NHS, that of “equal access for equal need.”