PRIVATE health insurers are refusing to pay for potentially life-saving drugs unless they have already been approved as cost-effective for use in the NHS.

General & Medical and HSA, two of Britain’s biggest medical insurers, have introduced a policy of authorising only drugs that have been certified by the government’s National Institute for Clinical Excellence (Nice).

The institute balances the medical effectiveness of drugs against their cost before recommending whether they should be prescribed on the NHS.

Many people who pay for private healthcare will be surprised to learn that NHS budget constraints apply and that they are still subject to the “postcode lottery” of unpredictable drug prescription.

The policy has emerged after a company director’s insurer refused to pay for a drug needed to shrink his tumours and stop the spread of cancer of the colon.

Dr David Radstone, a consultant oncologist at Thornbury hospital in Sheffield, told Tony Evans, 66, from Matlock, Derbyshire, that he needed Erbitux, which has been licensed as safe for use in Britain. But Health-on-Line, the internet-based insurer, refused to pay for it because it has not yet been approved by Nice.

When Evans took out his medical insurance six years ago he was told it would cover serious illnesses such as cancer and pay for all necessary drugs. He failed to notice a new clause this year in his £112-a-month policy saying that Health-on-Line would pay only for drugs approved by Nice.

Evans, the managing director of a gas sales and servicing company in Matlock, said: “I’ve been fighting this disease for nearly three years and this is the last news you want when one drug stops working on your tumours and you’re told you need another to keep you alive.”

He added: “The whole point about having private insurance is that it provides where the NHS doesn’t always. I feel bitter that this company is now using Nice as an excuse for me not having this drug.”

He and his wife Pamela are now preparing to sell their £500,000 four-bedroom home near Matlock to buy a small cottage and spend anything left over on Erbitux, which he estimates will cost £30,000 a year.

“I’ve got 11 grandchildren and I want to be around for them as long as I can,” said Evans.

Mark Martin, managing director of Health-on-Line, said: “Since April this year we have used the Nice guidelines as a means of determining what is experimental and what is not. Recent concerns mean that we are reviewing whether this process achieves the balance of treating all of our customers fairly.”

Evans’s case highlights a growing trend among insurers. General & Medical and HSA are the biggest insurers to insist on sticking to Nice guidelines.

Nice assesses drugs only after they have been given safety licences. Its decisions were not intended to influence private insurers and the industry is split over whether to follow its guidelines. Some insurers, such as Bupa, Axa and Norwich Union, rely largely on their own medical committees to decide on drug use.

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