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Leela Barham is a freelance health economist and policy expert. She has published in peer-reviewed journals and presented at national and international conferences. She has provided advice to the Department of Health and Social Care on policy on pricing of branded medicines to inform the negotiation of a successor to the UK’s Pharmaceutical Price Regulation Scheme (PPRS), the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS), as well as worked with patient groups, the NHS, pharmaceutical companies and many others internationally on the economics of healthcare and pharmaceuticals. Contact Leela on email@example.com
March 21, 2016
The idea of setting charges for some of NICE’s work is not new, after all companies already pay a charge for NICE Scientific Advice. That presumably builds on the history of charging that has happened with regulators. Plus other HTA agencies also charge industry. Now it looks like industry will also face a charge for NICE technology appraisals (TAs) of their drugs too.
First suggested exploration of charging
The Department of Health (DH) had already touted the idea of charging industry for NICE TAs. Recommendation 14 of the first Triennial Review of NICE completed in July 2015, said that:
“The Accelerated Access Review should consider the advantages and disadvantages arising from charging industry for health technology appraisals and medical devices and diagnostics evaluations.”
This was, in part, to help respond to the need for savings and a declining budget for NICE.
The Accelerated Access Review (AAR) - an independent review to look at how to speed up adoption of innovation across the NHS in England - is still underway. A final report is due out in April 2016. So far, the AAR itself has not focused on charging based on publicly available documents.
A timetable for charging
Despite no final report from the AAR, NICE seems to have taken charging industry as a given. Board papers for the March 2016 NICE board meeting make it clear that much work is already in train for implementing charging. They say, “as part of longer term plans to address the 30% grant-in-aid (GIA) income [for NICE] [charging industry for health technology appraisals] is now being actively pursued.”
NICE has gone as far as setting up a project group chaired by Sir Andrew Dillon, Chief Executive at NICE, with membership from the DH, on charging industry.
The draft business plan also sets out a timetable for introducing charges. It suggests that charges could go live from September 2017, at the latest.
Industry will no doubt have some views on whether or not they should pay a charge, and if so, just how such charges are set and how they might be best structured.
Fees for TAs might well be based on cost recovery. Trouble is it’s actually very tricky to work out what a NICE TA actually costs. That’s because the component parts of a NICE TA reflect the in-house team at NICE, the Appraisal Committee, plus the costs of the out-of-house team such as academics as part of Evidence Review Groups (ERGs).
These costs are also not necessarily easily standardized since TAs vary not only in scope (think multiple technology appraisals and single technology appraisals and whether or not companion diagnostics need to be considered, as just some examples of issues of scope) but also in the time that they take as a result of both decisions by NICE and others. NICE can seek clarification which might necessitate more analysis. Companies and others might appeal. Pragmatically an average cost for a TA might be the way that NICE goes, although it makes sense to have a different charge for a first TA versus a review.
Even if a sensible estimate of the cost of TA can be arrived at, some might ask whether companies should shoulder the whole burden given that benefits of a TA ought to accrue to the system as a whole. If so, what is a fair share for industry to pay?
More controversially, could charges also be used as incentives? Could industry get a refund in some cases? Delays in TAs have resulted from upheld appeals against TAs, including a TA for advanced ovarian cancer, and errors in the ERGs work in a TA for lung cancer. Could industry pay more when they cause a delay or they too make a mistake?
Engagement with industry planned for September 2016
NICE suggests that it will continue working up its plans for charging for TAs over the coming months. NICE plans to engage with industry in September so companies should start planning for those conversations.
Leela Barham is an independent health economist and policy expert. You access her website here and contact her at firstname.lastname@example.org