UK: NICE Responds to ABPI Legal Challenge to Budget Impact Test

Sep 28, 2017

The Association of the British Pharmaceutical Industry (ABPI) has sought permission for a Judicial Review (JR) for the introduction of a new budget impact test. Under the changes from the National Institute for Health and Care Excellence (NICE) – with NHS England (NHSE), the agency paying for many specialized, expensive medicines – access could be ‘phased and delayed’ whilst negotiations are conducted between NHSE and the company. That would be the case even if NICE found the drug to be cost-effective, but where it has a high budget impact. High in this case is defined as costing more than £20 million ($26m) in any of the first three years after launch.

The budget impact test is in addition to a number of other ways that pricing and reimbursement are shaped; not least is the Pharmaceutical Price Regulation Scheme (PPRS). Under the 2014 PPRS, members of the voluntary scheme have already paid back over a billion.

The ABPI applied for permission to legally challenge the introduction of the budget impact test (and other changes tabled too with respect to ultra-orphan drugs) on the July 10, 2017. Few details were available then about the details of the legal challenge with the ABPI issuing just a short press release and not commenting further.

More details are emerging now. The Times published a piece on 25 September which reveals a little of how NICE is responding. According to The Times – who have seen court papers – NICE has raised the issue of the independence of Adrian Towse, a proposed witness from the ABPI.

Adrian Towse is the head of the Office of Health Economics (OHE), an organization that aims to “supper better health care policies by providing insightful economic and statistical analyses of critical issues” according to their website. The Times suggests that the OHE is little known, but it is a big name in industry and policy circles. It’s also owned by the ABPI, and receives a lot of money from industry through research grants and consulting. On that basis, NICE says that Towse is plainly not independent and questions if his evidence can be properly admissible. The OHE itself would see itself as independent, with independent committees supporting its work.

NICE is also questioning the legal action on the basis that the ABPI filed its claim at the last moment. At the permission stage of a JR, Paul Ranson, Consultant – Contractor at Morgan, Lewis & Bockius UK LLP, explains that the court may refuse permission for a JR where there has been an unjustified delay in bringing the claim. Technically the changes were to be introduced from April, but in practice it’s likely they could only apply for a drug not-yet-appraised, so it’s unclear when the real start date would have been (although NICE and NHSE presumably knew with a forward work-plan of drugs to be appraised).

Time will tell if the ABPI will be granted permission, but expect NICE – and NHSE – to fight back.


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