England: Is the Cancer Drugs Fund Running Out of Money

The headlines have moved on for the English Cancer Drugs Fund (CDF). Replacing the positive press releases such as “thousands of patients to benefit” in 2013 are headlines shouting out that “thousands face being denied life-extending medication”.  In other words, a return to the same concerns that prompted the creation of the fund in the first place.

The English fund covers the cost of cancer treatments when the National Institute for Health and Care Excellence (NICE) has said ‘no’ or hasn’t yet come to a view. It started at £50 million (US$82m) a year and is now £200 million (US$ 328m) a year. UK Prime Minister (PM) David Cameron recently announced an extension of the fund to April 2016. He also said that the fund will allow new patients to benefit, but will also “guarantee that those currently receiving drugs will continue to get them”. A pretty big promise, especially in the run up to the next General Election (which should be around May 7th, 2015).

The fund has been controversial from the outset.  And that included whether or not there was enough money in the pot to go around. The British Oncology Pharmacist Association (BOPA) originally said no, there would not be enough.  They also pointed out just how hard it was to forecast demand. (And they put their calculations in the public domain so that anyone could come to a view). The Rarer Cancer Foundation (RCF) said yes, and actually it would be OK for some time, predicting a small under-spend for 2013/14. Both have been shown to be wrong (although in fairness BOPA’s predictions of blowing the budget just took longer to come through): according to the media, the fund will be overspent for 2013/14 and some drugs will have to be ‘de-listed’.  The over-spend could be some £40 million. And it could be worse in the future; if the fund stays as it is it will need to rise to £320 million for 2014/15.

Further, NHS England, the national agency with responsibility for the CDF, faces a ‘structural deficit’ of £330 million on specialized services (those services that are for relatively rare conditions and therefore planned and budgeted for centrally).

What happened to the money that was under-spent?
A key question is what happened to the fund money that was under-spent? The fund was under spend in 2012/13 to the tune of £25 million. And that was nothing compared to the £150 million under-spend in 2011/12.

Part of the under-spend was used for a new radiotherapy program (but only £15 million), good news for many, and also allowing the PM to make another positive press release related to cancer.  But you’ve got to wonder why, if this was money specifically to be spent on cancer drugs (whatever the right or wrongs of that), that it couldn’t have been held back for that purpose.

What happens now?
The CDF is now operating alongside the new Pharmaceutical Price Regulation Scheme. That scheme has a key new feature: industry will keep the total branded medicines bill within an overall limit, paying back if it goes above the forecasted bill. According to NHS England, the paybacks have already been accounted for in their funding allocation.  Which also means no-one in the NHS will feel like they are actually getting the windfall or can easily see how much they get.

So where does that leave the funding gap in the CDF?

Leela Barham is an independent health economist. You can find out more about on her at http://leelabarhameconomicconsulting.blogspot.co.uk and contact her on leels@btinternet.com