Stop haggling over drug price. Start buying productivity.

(And yes, ask NICE to price it in.)

The NHS’s productivity hole isn’t a rounding error. The ONS nowcasts say healthcare productivity in 2024 was 7.8% below 2019, even after upward revisions; 2023 grew a bit, 2024 was flat. That’s the backdrop to every winter plan, every waiting‑list pledge.

Meanwhile Wes Streeting is at loggerheads with industry over VPAG, the branded‑medicines rebate deal. The rate on newer drugs came in at 22.9% for 2025—higher than expected—after ministers and ABPI failed to land a reset this summer. Useful for the Treasury’s short‑run arithmetic, but it doesn’t answer the bigger question: are we buying productivity, or just squeezing price?

The blind spot in our value debate

NICE’s reference case is crystal clear: count NHS and personal social care costs and measure QALYs; exclude productivity (like workdays gained) from the analysis. You can bolt on wider perspectives as a separate, non‑reference‑case annex—but they don’t drive the main decision. That makes sense for consistency, but it can also make ministers fight the wrong war (unit price) instead of the right one (throughput, capacity, return‑to‑work).

If the UK can appraise new road bypasses using HM Treasury’s Green Book and explicit wider economic impacts, why is our medicines debate allergic to capacity and productivity metrics? Medtech and digital already tiptoe in this direction—NICE’s Early Value Assessment and the NHS’s Value‑Based Procurement both look beyond sticker price to capacity release and operational efficiency. Medicines should not be the last holdout.

GLP‑1s show the opportunity: price the deployment, not just the drug

NICE has approved tirzepatide for obesity, and NHS England’s interim guidance pushes it into primary care from 23 June 2025, with a phased cohort and wrap‑around support—exactly the sort of “green‑routing” that turns a therapy into system throughput.

There’s also emerging evidence that effective obesity treatment improves labour‑market participation: an analysis presented at ECO 2025 estimated ~£4.5 bn/year in potential productivity gains if eligible UK patients accessed GLP‑1s, based on extra paid and unpaid workdays. Reasonable people will quibble with the assumptions; fair enough—so measure them within the NHS roll‑out instead of ignoring them.

What to price in (besides QALY):

  • Cost per bed‑day averted (fewer obesity‑related complications = fewer admissions).

  • Cost per return‑to‑work day gained (for those in work).

  • Cost per clinician hour freed (when prescribing and follow‑up sit in primary care with digital support rather than specialist clinics).

NICE can keep its QALY reference case—and publish a Productivity Annex beside it. Different column, same table.

“Green‑route” medicines: where deployment already buys productivity

This isn’t theoretical. Three live examples where where/how we use drugs beats shaving pennies off the vial:

  1. OPAT (Outpatient Parenteral Antimicrobial Therapy) Move suitable IV antibiotics from wards to community/homecare. NHS England estimates an ICB of ~1 million can save 16,000–28,000 bed‑days a year with a mature OPAT service; UK studies show strong real‑world bed‑day release. That’s throughput, bought with governance and inclusion criteria—not with discounts. Metric: £ per bed‑day averted.

  2. eRD (electronic repeat dispensing) A process “algorithm,” but medicines‑driven all the same. If 80% of repeats ran via eRD, NHS England puts the saving at ~2.7 million GP/practice hours a year. That’s clinics you can reallocate to proactive reviews. Metric: £ per clinician hour freed.

  3. PINCER (pharmacist‑led prescribing safety) Scaled nationally, PINCER cuts hazardous prescribing by ~17% at 6 months (15% at 12)—fewer bleeds, fewer avoidable attendances. Metric: £ per avoidable drug‑related admission.

Caveat with Pharmacy First: shifting minor ailments to pharmacies clearly boosts access, but without tight algorithms (e.g., CRP‑based rules, gateway criteria) England saw far higher antibiotic supply for sore throat than Wales’s test‑and‑treat model. Deployment without discipline can damage productivity via resistance and bounce‑backs.

The proposal: add a second axis—Cost per Productivity Gain (CPG)

Keep cost per QALY as the anchor. But for selected classes where setting and process determine system value (GLP‑1s, anti‑infectives, high‑volume LTC drugs), publish a mandatory CPG annex alongside the reference case:

  • Units: £ per acute bed‑day averted (from admissions avoided/earlier discharge). £ per clinician hour freed (redeployable time in primary/community services). £ per avoided hospital attendance/admission (drug‑related harms prevented). £ per return‑to‑work day gained (reported separately to avoid equity distortions).

  • Methods: Use NICE’s existing allowance for non‑reference‑case analyses; disaggregate so we don’t contaminate the QALY column.  Draw on NHS purchasing practice that already prices capacity release (EVA, VBP).  Guard against double‑counting (e.g., don’t count bed‑days twice—once as cost offsets, again as productivity).

  • Governance: For VPAG, offer rebate relief when companies deliver verifiable CPG thresholds in real‑world roll‑out (e.g., OPAT bed‑days, GLP‑1 return‑to‑work days, eRD adoption). Keep the clawback for the rest.

  • Equity: Publish CPG by pathway, not person, so we’re valuing system productivity (bed‑days, clinic hours) rather than privileging certain populations by income or age.

Why this strengthens, not weakens, NICE

  • It doesn’t tear up the QALY playbook; it adds a pane of glass you can see through. NICE has always permitted non‑reference‑case perspectives in parallel; this just makes a Productivity Annex standard where it matters.

  • It aligns medicines with what medtech procurement already does: pay for outcomes and capacity, not just kit.

  • It re‑centres the policy argument. Instead of political oxygen going into headline rebates, it goes into deployment models that move the productivity dial.

The bottom line

We can keep arguing over percentages at the till, or we can price the pathway—where the drug is used, by whom, with what algorithm—and buy productivity on purpose. GLP‑1s in primary care with wrap‑around, OPAT done properly, eRD at scale, and PINCER as standard are not glamorous reforms; they’re repeatable operating models that release beds, hours and, yes, workdays.

So let’s ask the question out loud: Should NICE and the wider debate keep staring at cost per QALY alone—or add a visible, auditable cost per productivity gain alongside it? If the NHS is 7.8% down on pre‑COVID productivity, the answer writes itself.