New Challenges for NICE - Pharmaceutical Executive


New Challenges for NICE

Pharmaceutical Executive

NICE Fights Back

In a series of statements and meetings last fall, NICE took on its critics. Among other things, it pledged to simplify and explain better the appraisal process and to build a strategy to market itself, not only in the UK but abroad. NICE now has a consultancy service with specific P&L responsibility to help other governments, academia, and the private sector build similar institutional capacity around the NICE business model.

NICE also promoted statistics showing it was "flexible" in making positive appraisals of innovative technologies that exceed the 30,000 QALY threshold; its new role in administering the Innovation Pass will take this flexibility further. It also agreed to set up "scoping workshop meetings" for technologies regarded as innovative, to give industry an additional opportunity to explain "the unique characteristics that support this proposition." When a NICE appraisal committee is satisfied that a product represents a "step change" in the management of a condition, it will have to demonstrate that the product's innovative characteristics have been taken into account in the QALY calculation.

In addition, NICE has opted to engage industry directly in a project to re-evaluate the structure of QALY as the basic tool for determining the value-for-money ratio for NHS. It would be wrong to assume that QALY is dead, but we can expect to see a lot more investigation this year into how it is calculated. The Association of the British Pharmaceutical Industry's (ABPI) Office of Health Economics is currently under contract with NICE to conduct two studies analyzing the components of the QALY model and come up with new ways to broaden health-related quality-of-life measures.

The first study will look at NICE's past decisions on healthcare technologies, and use econometric analysis to examine whether acceptance of a new medicine is influenced by its cost-effectiveness, as well as other characteristics. "By modeling NICE decisions in this way, we can identify NICE's cut-off threshold in terms of cost-effectiveness, and the extent to which NICE is prepared to trade cost-effectiveness against other considerations," the study's principal investigator, Nancy Devlin, told Pharm Exec. The results of this research are due to be presented by mid-year.

The second is to examine what the NICE value threshold should be in relation to actual spending decisions made by NHS, to better determine the value of a QALY "at the margin." The relationship between the attributes of a new therapy and the limits imposed by the threshold is rarely cut-and-dried. Context is always important. "This is based on the idea that, in making its recommendations, NICE should focus on the overall opportunity costs to the NHS of listing new healthcare technologies," added Professor Devlin. The time line for this work, however, is "much longer."

As 2010 dawned, establishment endorsement for NICE came from none other than the Queen: NICE CEO Andrew Dillon became Sir Andrew in the New Year's Honours List. And abroad, despite public criticisms in its home court (as well as from Germany's new drug assessment body, IQWiG, which has condemned QALY as "ethically unfair"), NICE is still regarded as the yardstick by which other government payers will formulate methodologies and measure development. That is why the outcome of the UK debate on QALY is a change driver for all companies committed to global medicines innovation, and will keep NICE in the spotlight this year.

Julian Upton is Pharmaceutical Executive's European correspondent. He can be reached at


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