UPDATE 1-Britain allows top-up payments for pricey drugs
* Britain to allow private top-up drug payments on NHS
* NICE given more scope to approve drugs for terminally ill
* Govt seeks flexible pricing arrangements with drugmakers
(Adds government announcement, more details)
LONDON, Nov 4 (Reuters) - Britain is to allow private top-up payments for cancer and other costly drugs within the state health service in a compromise move highlighting the dilemmas facing cash-strapped social healthcare systems worldwide.
At the same time, the National Institute for Health and Clinical Excellence (NICE) is to have more flexibility to assess the cost effectiveness of drugs for the terminally ill in a bid to minimise the number of patients needing to pay.
Relaxing the evaluation threshold will effectively increase the number of expensive, niche drugs cleared for use on the National Health Service (NHS).
Allowing top-up payments is a jolt to Britain's 60-year-old health service, which currently prevents patients paying privately for treatment. Those seeking to pay are typically denied any free NHS care.
Critics fear top-ups will introduce a two-tier NHS -- but health minister Alan Johnson said the old system was simply seen as "cruel".
"A greater range of more expensive therapies will be available to more patients on the NHS, reducing the need for them to seek private care," he said.
"A small number of patients may still choose to pay for additional drugs not available on the NHS. But I have agreed that, from today, NHS care must never be withdrawn in these cases -- as long as private care takes place in a private facility."
Johnson said he was also working with drug firms to agree new and more flexible pricing arrangements -- including lower initial prices, with the option of a higher prices if value is proven later when additional clinical trials report results.
Mike Richards, the country's National Cancer Director, who drew up the package of measures endorsed by Johnson, said there were around 15,000 applications a year in England from patients seeking drugs not covered by the NHS.
He predicted this number would fall sharply in future.
Welcoming the news, Harpal Kumar, chief executive of Cancer Research UK, said tens of thousands of cancer patients should benefit from changes that would improve access to medicines without giving drugmakers "a blank cheque".
Some companies, like Johnson & Johnson (JNJ.N) and Novartis (NOVN.VX), have already negotiated risk-sharing deals to cap the cost of their drugs to the NHS and more such deals are expected.
Firms, however, are wary of making promises that could undermine prices in other markets.
Britain -- home to drug giants like GlaxoSmithKline (GSK.L) and AstraZeneca (AZN.L) -- accounts for 3 percent to 4 percent of the global pharmaceuticals market. (Reporting by Ben Hirschler; Editing by Chris Wickham)
