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Deal or Delay: NICE's New Negotiating Chip


Leela Barham looks at NICE's latest proposals aimed at tackling the affordability challenge.

With the UK's NHS facing a financial challenge that shows no signs of abating any time soon, the National Institute for Health and Care Excellence (NICE) and NHS England (NHSE) have offered a way forward through the affordability challenge. Speed of NICE decision-making and speed of implementation of positive NICE guidance on new medicines will be part of ‘agreements’ (deals to you and me) with the NHS.

The first deal is that NICE will offer a ‘fast track’ process when the cost per Quality Adjusted Life Year (QALY) looks convincingly to be below or around the £10,000 ($12,300) mark and costing less than £20 million ($24.6 m) in the first three financial years after launch. NICE expects to produce draft guidance immediately after the European Medicines Agency publishes the marketing authorization. Funding would be provided 30 days after NICE guidance, not the usual 90 days.

The second deal is that companies can start a discussion - and eventually agree a commercial agreement - with NHSE when their new medicine looks to be cost-effective but with a high budget impact. Of course, high is somewhat subjective. NHSE has defined high budget impact as £20 million over the first three financial years after a new medicine is launched. The timescale for implementation of positive guidance will be ‘varied.’ If the company and NHSE can’t agree an arrangement then implementation will be delayed.

The third deal is automatically funding those medicines classified as highly specialized technologies (HSTs) – orphan drugs for some of the rarest conditions – if they are below £100,000 per QALY and with a budget impact of less than £20 million in the first three financial years following launch. If above this, then companies will be pitched against other HSTs through the NHSE specialized commissioning process. That process is to all intents and purposes an annual commissioning round, although there is a policy for in-year funding. Even if within the £100,000 per QALY threshold but over the £20 million over the first three financial years, companies will need to reach a commercial agreement with NHSE. They face a ‘pause’ in the NICE process if they haven’t yet reached an agreement. If that situation persists then implementation of NICE guidance would be delayed, even if their drug is considered cost-effective.

NICE and NHSE are consulting on the proposals and stakeholders have until January 2017 to respond. Economists have always considered delay a form of rationing: now delay will also become a negotiating chip between NHSE and companies. The worry is that the cost of delay is really paid by patients.