New Challenges for NICE

Feb 01, 2010

The United Kingdom's drug spending watchdog, the National Institute for Health and Clinical Excellence (NICE), has become the global poster child for applying evidence to drive decisions on access to costly new medicines. Because its influence extends far beyond the UK, it's worth noting that the reliance reviewers place on one standard statistical measurement tool—quality adjusted life year (QALY)—has spawned criticism among patients, physicians, and other stakeholder groups. In response, NICE management has spent much of the past year on advocating a better "value proposition" for its work. How successful this effort will be is unclear, but 2010 will likely see structural changes at NICE that will in turn shape how other countries (particularly high-growth emerging markets outside Europe) address the application of cost-effectiveness evidence as a health resource allocation tool.

Is QALY a Quality metric?


Julian Upton
NICE has lately been stung by expert criticism of QALY as a narrow and exclusionary means of establishing the value of a particular therapy for listing on the National Health Service (NHS). Last February, a group chaired by science entrepreneur Sir David Cooksey published a report, The Review and Refresh of Bioscience 2015, which called for an official inquiry to the operation of NICE appraisals. The report cited concerns among both industry and physicians on how QALY creates built-in biases with respect to determining the broader merits of innovative drug treatments, from lower spending on healthcare services to productivity gains from reduced disability and absenteeism to relief for family caregivers. QALY, which estimates the additional cost of a year of healthy life per person from a new drug (compared against existing treatments), is currently set at a threshold cost of between £20,000 and £30,000 a year; the threshold means that if the QALY for a medicine exceeds that amount, it is usually rejected as a poor value for the NHS.

Cooksey's main point was that QALY fails to account for the unanticipated positive impact of innovation. "The perceived problem for industry," the report noted, "Is that NICE appraisals do not operate in a way that is supportive of innovation, or uptake and access to medicines, and therefore dissuades companies from investing in the UK."

NICE responded by commissioning a study by Professor Ian Kennedy, former chair of the National Healthcare Commission. His July 2009 report endorsed the QALY appraisal methodology but recommended that work commence on a common definition of "innovation" to underpin the QALY. If a medicine fits the definition, then it will be eligible for positive appraisal under a higher cost threshold.

New Innovation Pass initiative

Kennedy's recommendations came just a week after the government Office for Life Sciences (OLS) unveiled its Life Sciences Blueprint, an initiative that aims "to put innovation at the heart of healthcare delivery." At the center of this is the Innovation Pass, a scheme to be administered by NICE to make "selected innovative medicines" available for three years on NHS to patients with rare diseases. During that period, data on the public health impact and cost-effectiveness of these novel therapies will be collected and then applied after the three years to a NICE appraisal to determine whether the medicine should remain on the NHS reimbursement list.

A modest budget of £25 million for the scheme has raised questions about how medicines will be selected—only a handful will be able to make the list—as well as how much autonomy NICE actually has here. Although NICE will coordinate the Pass selection process, the OLS will manage the budget; it has been noted that NICE was not particularly active during negotiations and failed to show up for the government's announcement. Industry comment is due by February 8, and the general view is that the proposal does little to solve its basic problem with NICE, which is a reliance on the wrong signals (like QALY) in evaluating value and access to patients.