The National Institute for Health and Care Excellence (NICE), a cost-effectiveness watchdog for Wales and England, has refused to grant Bristol-Myers Squibb Co (NYSE:BMY) Opdivo approval for the treatment of neck and head cancers. The cancer immunotherapy which is manufactured by Bristol-Myers Squibb was rejected on the grounds that it was not cost-effective. This comes after the CHMP committee of the European Medicines Agency gave a recommendation for Opdivo. The drug is expected to get the approval of the European Union in a couple of months.

No final decision

Bristol Myers Squibb and NICE could, however, still reach an agreement since the final decision is yet to be made. This is what the leading cancer clinicians, patient groups in the United Kingdom and even Bristol Myers Squibb are urging because of the efficacy of the drug.

“It is vital that we find a solution that is fair for all and we ask NICE to share our sense of urgency on this matter,” Bristol-Myers Squibb’s Ireland and UK general manager Benjamin Hickey, said.

Data shows that Opdivo is responsible for the highest rise in survival rates in patients suffering from neck and head cancers in two decades. NICE, has, however, stated that this is not “cost effective”. In the third phase trial on patients who were suffering from advanced neck and head cancer, the number of participants in the trial who were still alive after one year had doubled when compared to participants who were treated using chemotherapy.

Slightly better than chemotherapy

This translates to patients on Opdivo extending their lifespan by approximately 2.4 months compared to patients being treated using chemotherapy. And because Opdivo is significantly more expensive than chemotherapy, NICE decided that the marginal extension in lifespan was not enough to warrant recommending the immunotherapy, even though side effects are more manageable.

Getting Opdivo approved by NICE is critical for Bristol Myers Squibb to ensure the cancer immunotherapy does not lose its market share to Keytruda, a similar immunotherapy developed by Merck. Keytruda got the approval of NICE after it reduced its price. Though its price is not public knowledge yet, its price is estimated to be around $37,235. Bristol Myers Squibb will therefore facing increasing pressure to reduce the price of Opdivo.

In Tuesday’s pre-market hours shares of Bristol-Myers Squibb stood at $53.35.