This site is intended for health professionals only

NICE to be stripped of drugs rationing role

NICE will no longer make ‘yes’ or ‘no’ decisions on access to drugs from 2014 as the Department of Health will set the maximum price the NHS will pay, the health secretary has revealed.

Andrew Lansley said patients’ rights to access drugs under the NHS Constitution would remain, but would be based on negotiations with the DH, rather than NICE’s assessment of cost-effectiveness.

He said the change would enable more innovative medicines to be available to CCGs, but critics said the ‘political fix’ could have major implications for GP commissioners trying to balance budgets.

Speaking at the NICE conference in Birmingham this week, Mr Lansley said that the current Pharmaceutical Price Regulation Scheme (PPRS), which expires in January 2014, had failed to ensure NHS patients had the access to new treatments.

He said the Government would open talks with pharmaceutical companies later this year to introduce a value-based pricing structure from 2014 that would apply to new drugs, rather than those currently available.

The change would mean that ministers, rather than NICE, will dictate which treatments are funded on the NHS, with the DH setting payment thresholds and negotiating directly with manufacturers over them.

The DH will determine the how QALYs will be weighed, potentially paying more for treatments which show additional therapeutic benefits, more innovation or had other ‘societal benefits’, said Mr Lansley.

CCGs will have a legal responsibility to provide access to therapies approved under the new scheme, as PCTs currently have under the ‘funding direction’ for NICE-approved therapies.

He said: ‘As enshrined within the NHS Constitution, the NHS in England will continue to fund existing drugs that have been recommended by NICE. And that right will continue and will apply to new medicines to which value-based pricing applies.

‘NICE will examine the evidence on the potential clinical and cost effectiveness of new drugs as they become available; drawing on its world-leading expertise in the field.

‘And, importantly, under the new system of value-based pricing, NICE will no longer be obliged to make yes/no decisions on access, based on its own cost per QALY thresholds.’

Dr David Jenner, GMS/PMS contract lead at the NHS Alliance and a GP in Cullompton, Devon said: ‘I would be concerned that judgements on value would be made on political, rather than evidential grounds.’

 ‘The devil will be in the detail. The crunch for CCGs will be if more drugs are let through – that could increase the cost pressures on budgets.’

And Professor James Raftery, professor of health technology assessment at the University of Southampton, said the plans were a ‘political fix for difficult diseases’.

He said: ‘The opportunity cost is borne by patients who could be treated and are not because the NHS budget has been raided.’

‘It is taking money on the basis of no evidence, and on the basis that those diseases are difficult to say no to.’



How could value-based pricing work?


Step 1: Ministers set maximum QALY payment thresholds


Step 2: Companies submit evidence on cost and effectiveness


Step 2: NICE advises ministers on health gain and calculates QALY


Step 3: QALY is weighted for any additional ‘societal’ benefits


Step 4: Government negotiates if the price is too high, asking for more evidence if available


Step 5: Drug is approved for use on NHS, or company has to state publically why they were unable to agree a price


Source: Department of Health 2010, A new value-based approach to the pricing of branded medicines: A consultation