Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 280 - 296)



  280. Moving on to the ABPI, in your summary of key points you make the point that NICE's own estimates of the predicted annual addition to the Health Service budget of £93 million has not been reached and also the savings accruing have not been realised. Does this damage their credibility? Have you a comment on that?
  (Dr Jones) Again the difficulty is that it is not the organisation NICE's problem. It is not a criticism of NICE per se, it is the criticism of our inability to put that in place. The Minister has been very clear. He says he is going to put "must do" regulations in place. Of course out there and certainly overseas, to our company headquarters, it seemed to be a criticism of NICE. The announcement by the Minister is very welcome, but we heard earlier that that presents other problems. We also say in our submission that the great fear we have is that in what is evidently and always will be I guess a cash limited situation the danger is that we shall be robbing Peter to pay Paul.

  281. I want to move onto the Pharmaceutical Price Regulation Scheme. In your evidence you say this affects NICE's ability to develop guidance and guidelines. Really we should like a bit of an explanation about this particular scheme. Does this not have a message for cost effectiveness and does it not rather negate the work NICE has to do?
  (Dr Patterson) You have taken that statement slightly out of context. It was part of three bullet points which were trying to say that NICE does not work in a vacuum. There is a whole series of things, including PPRS, which affects how medicines are used, what the real price is in the real world and what the cost effectiveness is to the health system. There is a whole gamut of things including the licence indications which will affect the product.

  282. Can you explain the Pharmaceutical Price Regulation Scheme a little bit?
  (Dr Patterson) How long do you have?

  283. Is it not something which allows that if sales go down you can put the prices up, putting it very simply?
  (Dr Patterson) Prices almost never go up on medicines in this country, as you saw from the report to Parliament in December. In brief, the PPRS is a scheme which caps profits and profitability in our industry at a level equivalent to the average return on capital of the FT100. In other words we are to be average companies half way up the FT100 scale of activity. It does that by looking at our expenditure, our sales and putting those all together into a big pot and looking at return on capital, which is done through an accounting process with the Department. What that says is that we are allowed to make profits within a certain range from our sales, but if our sales go up very high versus our costs or we were for instance to charge too high a price, the Government then claws that back at the end of the year through the PPRS scheme. In fact it is a profit control scheme rather than a pharmaceutical price regulation scheme. It has the wrong name for what it does.

  Dr Taylor: Are we wiser?

  Chairman: I understood it earlier on.

Dr Naysmith

  284. One pharmaceutical firm which has submitted evidence, not represented here today, said that NICE could promote innovation in the pharmaceutical industry. Another one, also not recognised here today, said in their submission that NICE fails to reward innovation. What do you think NICE could do? How would you reconcile these two slightly different views? Should NICE be doing that sort of thing?
  (Mr Fullagar) If I may, the statements are not self-contradictory. They are saying that if NICE does the job which it was set out to do, which was to promote more ready and speedy access to the new treatments for patients, that would be promoting it for the patients. The interests of the industry would follow on behind and it would be encouraging innovation. Because of the problems we have been discussing, the delays and the uncertainties, the other company is saying that the reality so far is that it is not doing that promoting/innovating job that we had anticipated. The theory is that if you get it to work then you are helping the patient and you are promoting innovation. Right now there is no evidence it is working.

  285. Another drug company has argued in its submission that in appeals to NICE after recommendations have been made NICE is both judge and jury in its own court. Do you subscribe to that view?
  (Dr Jones) Very much so.

  286. What would you suggest should be done about it, if you believe that is something which is inhibiting the development of NICE?
  (Dr Jones) We have been used to a process for many years through the Medicines Control Agency, the Medicines Commission, whereby if the Committee on Safety of Medicine reaches a view and there is a genuine disagreement on the basis of science, then there is an appeals process through the Medicines Commission, which is independent, has an independent chair person and so on. You bring witnesses to that. In this process we currently have with NICE the only person who can decide whether you can appeal is the Chairman of NICE.

  287. Tell me a little more about how the NICE system works?
  (Dr Jones) What happens is that if a company believes that the decision the Appraisal Committee have reached does not fit their view of the facts, unless they can prove to the Chairman of NICE that that was done with misfeance or some mistake in the process, they cannot just appeal on the grounds that they genuinely disagree with that conclusion. The only reason they can then be allowed to appeal is if the Chairman accepts and gives permission. As much as we fully respect Sir Michael Rawlins's independence, he is the Chairman of the Appeals Commission as well as the Chairman of NICE. That seems to be, for his benefit and the benefit of NICE, something which probably ought to change.

  288. How often does it happen that a report is made with which one of your members disagrees, approaches Sir Michael and then is not given permission.
  (Dr Jones) There are examples where that has occurred

  289. How often?
  (Dr Jones) More often than not there is a tortuous process where you try to get to appeal on the grounds of some judicial review of the process rather than a fair and open admission in life that life is not that simple. We looked at Beta-interferon earlier. There is a genuine reason for debate. Having got to that point, then the issue of who is judging it becomes important too. In the Medicines Control Agency example, a group of independent people, representing both consumers as well as medicine and others, reviews the situation again. At the moment you only appeal to NICE on the basis of judicial review. We think that there are very good reasons why it should change. So it would appear do NICE themselves. We understand that at the board meeting on 16 January they did address this. We have not seen their document yet. We have been invited and have put in our views—the ones I have been putting to you—and one hopes that we could move now to a process which is much more of the measure of what Government for years have seen as appropriate in our area, which is through the Medicines Control Agency model.
  (Mr Gray) I was going to make that final point. It is probably also worth noting again, looking at the NICE submission to this Committee, that because of the appeal rules and the way in which they define what can be captured under appeal or not, it is also likely to be that people who do have some concerns over a recommendation are not making appeals which they might if it were a more open process because they do not feel under the current definition of what constitutes an appeal that there is any point. I believe there is one point in that submission where the fact that there has been a relatively low number of appeals is given as support for a particular point. I am not sure we can necessarily take that as given.

Andy Burnham

  290. In his evidence to the Committee, I think everyone would agree a fairly eminent commentator on these matters, Sir Iain Chalmers, speaks of "important data having been withheld from NICE by companies whose interests would not be served by submitting it". Is he right to claim that? If he is, can the public trust the industry to co-operate in this process?
  (Dr Patterson) The answer is: absolutely. We submit all relevant information to NICE. Do we submit every scrap of evidence? No. If, for instance, a medicine is being looked at in adults, we do not submit the paediatric data or another indication which is irrelevant.

  291. He uses quite strong language, "information withheld", "important information withheld". Do you recognise that at all?
  (Dr Patterson) I can only speak on behalf of my company. We would absolutely refute that.
  (Mr Fullagar) I can back that up. I asked my own company again recently whether there was anything we had felt we had to withhold from the committee. The answer was: absolutely not. We have had several products reviewed by the committee.

  292. Just thinking above your companies for a second and thinking of the industry body, has NICE ever contacted the ABPI to say they were concerned that had happened, that one of your members has done that? Have you had that kind of contact?
  (Dr Jones) No and in my whole experience working in the Medicines Commission, there were occasions, if the Chairman of the Commission felt that a company in some way adversely presented data, or on the other hand had done a super job, they would always write to the chief executive. That has not occurred on the submission of relevant data to the committee.
  (Mr Gray) We can confirm that we also submit all relevant data to NICE.

  293. Why do you think he makes that claim, then? It is a big claim to make.
  (Mr Gray) I personally have no explanation at all.

Mr Burns

  294. Presumably it would have been helpful when he made the allegation if he had given examples of it to back that up.
  (Mr Gray) Yes.
  (Mr Fullagar) Yes.

Dr Naysmith

  295. Presumably he must be referring to the odd occasion when NICE has asked for further data on something, which does happen.
  (Dr Jones) This is a very regular interaction which we have with regulatory agencies. Quite frequently in the review, both in Britain and elsewhere, a regulatory agency will say they have analysed our data and could have more data then we go back and do the analysis on our data. What we have to remember is that the Medicines Control Agency has done its job. It has made its review on all the data and therefore it would not be appropriate for NICE to go back and make another clinical judgement of efficacy. That would be usurping the role of a legitimate competent authority in that area.

Andy Burnham

  296. If Sir Iain Chalmers would back up that claim, or if evidence were given to you, what action would the ABPI take to address concerns of that kind?
  (Dr Jones) If it were an isolated example for a company and it could be shown to be the case, which you are hearing is not the case, then obviously we would want that company to have to explain it to NICE. It is very important that industry is seen to be scrupulously objective in its dealings with these agencies. It is to its advantage to do so.

  Chairman: Gentlemen, may I thank you for a very helpful session and for your co-operation with our inquiry? Thank you very much indeed.

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