Select Committee on Health Appendices to the Minutes of Evidence


Memorandum by Professor Alan Maynard (NC 111)


  1.  Alan Maynard is Professor of Health Economics and Director of the York Health Policy Group in the Department of Health Sciences at the University of York. He was Founding Director of the Graduate Programme in Health Economics at York from 1976-83. From 1983 until 1995 he was Founding Director of the Centre for Health Economics at the University of York. He has worked as a consultant for the World Bank, the UK Department for International Development, the World Health Organisation and the European Community in countries such as South Africa, Latvia, Cyprus, Chile, Mexico, China, Thailand, Brazil and Botswana.

  2.  In addition to this academic and international advisory work, he has been involved in NHS management since 1983, being appointed by Conservative and Labour administrations to a variety of roles. He has been Chair of the York NHS Trust since 1997 and, in this role he is involved in the provision of secondary acute and mental health care to the local population of 300,000 from a budget of £130 million.

  3.  In May 1997 the then Parliamentary Secretary of State for Health, Baroness Jay asked for advice on how better to manage the pharmaceutical budget. After some meetings, the advice, which had been offered to Baroness Jay, was published in the British Medical Journal (Maynard and Bloor (1997)). One of the proposals in this paper was the creation of a new body with a remit similar to that subsequently given to the National Institute for Clinical Excellence (NICE). The proposals put forward in the British Medical Journal were further developed during my subsequent involvement in the Comprehensive Spending Review in 1997.

  4.  I have advocated a mechanism to evaluate the cost effectiveness of new and existing health care technologies for nearly 20 years. Whilst Government and policy makers such as Michael Rawlins, the Chair of NICE, deny the existence of rationing in the NHS, such prioritisation is unavoidable. The issue is not WHETHER health care resources are rationed but HOW ie what principles should determine which patients should get access to health care?

  5.  Rationing involves denying patients of care which of benefit to them and which they want. It is ubiquitous in all health care systems; the only difference is the way in which rationing takes place internationally and nationally. The proposal to create NICE in 1997 was to ensure that the rationing principles were explicit and that the best possible advice was offered to managers and clinicians so that scarce NHS resources were targeted at those patients who could benefit most at least cost.

  6.  Thus I was an originator and an architect of the idea of NICE. However I have also been one of its most persistent critics, as I believe that the organisation I helped to create is dealing with a range of issues either by ignoring them or acting inappropriately. Some of these issues were dealt with in another paper in the British Medical Journal. (Cookson, McDaid and Maynard (2001)). The purpose of this paper is to develop and add to this work and pose a series of questions, which I hope the Select Committee will find worthy of fuller consideration in both their oral proceedings and their final report.


  7.  The demand for health care is driven by at least three powerful forces. Firstly the population is ageing. Whilst there is debate about whether subsequent cohorts of the elderly will be healthier and less demanding in terms of social and health care, the impact of demography on the demand for NHS services cannot be denied.

  8.  Another powerful force increasing NHS demand is new technology. The ingenuity of pharmaceutical and equipment manufacturers is considerable. However many of these products create marginal rather than substantial benefits for patients. Consequently it is of great importance that the rhetoric of producers of new products to treat patients is evaluated carefully to determine the technology's clinical effectiveness (does the product improve the health of the patient more than existing treatments?) and cost effectiveness (does the product improve the health of the patient more than existing products at the same or a lower cost?).

  9.  The adoption of a product by the NHS should be determined by its relative cost effectiveness. A new technology may be clinically effective but not cost effective eg beta interferon for the treatment of multiple sclerosis is clinically effective but not cost effective, in part because of the high price set by the manufacturer. However any product, which is cost effective, is clinically effective (Maynard (1997)).

  10.  The quality of evaluative evidence provided by manufacturers is uneven. During the last decade clinical scientists who conduct trials and health economists who do economic evaluations have been scrutinised better as data bases and critical evaluation of practitioner's performance has improved. (eg the Cochrane Collaboration). However the incentives to corrupt the evidence base remain considerable, especially when it is claimed that it costs $800 million to bring a new drug to market. With investments of that magnitude, the industry does not want to fail clinical and cost effectiveness tests just before marketing!

  11.  A third cause of inflation in health care demand is the expectations of the population. Most of us are reluctant to accept that we are suffering from a terminal, sexually transmitted disease called life! In decline we struggle for small increases in survival even when the quality of life is poor and the cost is high. To treat, for instance terminal cancer patients, with relatively ineffective technologies is to deny an older person of sight restored by a cataract removal or middle-aged patients of the eradication of crippling pain and disability caused by angina.

  12.  The producers of new technologies supported by patient lobbies and doctors practising in the treatment area, make a formidable combination when advocating the adoption of new treatments. Their efforts are re-inforced by politicians and the media who tend to present new treatments as being costless (with no opportunity cost). Such inflation of expectations when not substantiated by evidence of clinical and cost effectiveness is improper, not in the best interests of the population but commonplace.

  13.  The combined effects of these three powerful influences on demand when set against the finite and limited resources if the NHS inevitably creates conflict. When demand is increasing due to technological ingenuity, demography and often ill-informed expectations whilst funding is parsimonious, finite and deployed with considerable local variations in efficiency and equity, political dissent about the outcomes of national and local rationing processes is inevitable. Guidance through this jungle of advocacy and rhetoric has to be informed by well researched evidence. That is the function of NICE in England and Wales and the Scottish Inter-collegiate Guidelines Network (SIGN) and the Health Technology Board of Scotland (HTBS) in Scotland.

  14.  Enforcement of these guidelines is the function of the Commission for Health Improvement (CHImp) in England and the Clinical Standards Agency (CSA) in Scotland.

  15.  Whilst the principles of the technology assessment are clear and the need for policing of compliance with guidelines is obvious, these are novel ideas both to the medical profession and NHS managers. The much-abused concept of "clinical freedom" can never be the freedom to use society's resources inefficiently and without accountability. Unfortunately the medical profession has failed to set evidence based practice guidelines and remains reluctant to be accountable for its performance.

  16.  However as guidelines are established and policed it is essential that the science supporting NICE and other regulatory bodies be of the highest quality. Poor science and bad management can discredit the whole process of establishing which of the many competing treatments should be made available to patients in need of care.


  17.  NICE was established to produce national guidance on individual technologies (appraisals), the management of specific conditions and clinical audit. A series of issues have emerged from the work of NICE since it started work in April 1999:

    (i)  How should the work of NICE be prioritised? NICE is funded parsimoniously and charged with a large work programme. It has allocated most effort to the area of appraisals of new technologies, in particular new drugs. This work involves "horizon scanning" to determine which new drugs are likely to emerge. It appears to have led to relatively little resource being used to evaluate existing technologies. What criteria were used to determine these choices?

    (ii)  The Scottish SIGN allocates all its funding to evaluate specific conditions (eg stroke or asthma) rather than the individual technologies used in combination to treat particular conditions. What is the appropriate balance of investment in appraisals of new and existing individual technologies, and the evaluation of specific conditions?

    (iii)  The NICE focus on new technologies may have a particular opportunity cost in that it may direct NHS funding to them rather than to proven older technologies where there are waiting lists (eg hip replacements, cardiac surgery and cataract removal) and which are more cost effective. Thus it may be better value for money (or more efficient) for NHS trusts to invest in these older technologies than in drug treatments for cancer (eg taxanes), obesity and motor neurone disease. The Government has decided to make NICE "advice" mandatory. This decision may distort the allocation of resources in the NHS and lead to the funding of relatively inefficient treatments.

    (iv)  The chair of NICE indicated in his annual report (July, 2001) that the cut-off for the approval of technologies appeared to be £30,000 per QALY (a QALY is a quality adjusted life year and represents one year of life with full physical, social and psychological well being). The Australian equivalent of NICE, the Pharmaceutical Benefits Committee, uses a cut off of less than half that adopted by NICE. How was the NICE cut off decided and how defensible is it?

    (v)  NICE has approved all the drugs it has appraised, with the exception of beta interferon. These approvals have been conditional in that they are made for patient sub-groups with particular characteristics. However has NICE (because of its de facto high cut level of £30,000 per QALY) been too generous? Some medical practitioners have argued that they have eg general practitioners in North Devon rejected NICE's advice on the influenza treatment Relenza.This drug appears to reduce the duration of a bout of `flu by one to one and a half days if it is used in a timely manner and the doctors decided that the benefits were not worth the high cost of the drug.

    (vi)  The North Devon decision about Relenza emphasises the continuing discretion which practitioners have in regard to their use of treatments. The decision to make NICE decisions mandatory will challenge this discretion. However the primary problem arising from discretion is that once approved by NICE it is difficult to control the drugs use. A "nice" combination of patients' lobbies and provider groups suitably "oiled" by pharmaceutical marketing funds can lead to excessive and inefficient use of the new technology beyond the recommendations of NICE. Thus the diabetes treatment Rosiglitazone was approved by NICE and their estimate of the annual expenditure cost was £15 million. It seems that currently expenditure on this drug in the NHS is nearing £50 million.

    (vii)  How can such expenditure inflation be controlled? Local management and the Commission for Health Improvement may influence such trends when information about practice in the NHS is improved by electronic prescribing and better investment in information technology and the management of its results. Another method of curtailing NICE induced NHS inflation is to give NICE a budget to fund NHS purchasers when it approves a technology. If these could be made "hard" budgets and if expenditure exceeded allocations, purchasers could demand recompense from NICE. Such a proposal would not be popular with NICE. However expenditure inflation cannot be ignored by NICE as being someone else business: its opportunity costs affects significantly the delivery of local services.

    (viii)  Decisions about technologies are informed by data from clinical trials, some of which have economic components. Pharmaceutical companies to meet the requirement of the 1968 Medicines Act carry out these trails. This legislation, introduced in the wake of the thalidomide tragedy, obliges the companies to provide the Commission on the Safety of Medicines (CSM) with evidence of safety, efficacy and quality. If this evidence is adequate the CSM gives the company marketing approval and the product can be sold in the NHS. The evidence provided to the CSM is a limited and imperfect basis for making decisions about the clinical and cost effectiveness of products. As a consequence pharmaceutical companies are investing in economic evaluations, which now have to be conducted in compliance with NICE guidelines. Also clinical trail data are modelled.

    (ix)  Any decision made by NICE must, given the quality of the data, be tentative. Long-term use of a product may reveal benefits and consequences (eg side effects), which are not detected by the clinical trials required by the CSM. It would seem sensible to collect post marketing data and for NICE to review its decisions over time as more becomes known about expensive products with which can be dangerous if not targeted efficiently to appropriate patients. It would also seem sensible to merge NICE and the CSM as they are complementary organisations. In future marketing approvals will be valueless unless NICE sanctions NHS reimbursement of technologies. Whilst such a merger would require legislation, it would be efficient and is timely.

    (x)  The quality of the science on which NICE decisions are made should be evaluated independently. The timeframe in which NICE makes decisions is tight and much advice is bought from academics for little or no reimbursement. The novelty of NICE and the collection of "cv brownie points" by academics are unlikely to ensure a continued supply of high quality analytical advice. Errors in decision-making will be used unscrupulously by companies to undermine NICE .The scope of NICE's work is large and its potential importance for the NHS cannot be underestimated. Poor funding should not undermine the quality of its work.

    (xi)  The Government believed that NICE would eradicate postcode rationing. At present over three dozen patients in North Yorkshire with multiple sclerosis are given the drug beta interferon. In Midlothian no patients can get this treatment. Experts in the two places disagree about the clinical and cost effectiveness of this drug and it is, as a consequence, rationed by postcode. NICE's decision about this drug, if it is confirmed and if the Government had not circumscribed the decision by allocating funds which undermine NICE, would have led to no new patients getting the drug. Whilst rejections of drugs, if enforced, will lead to equality over time, approvals may not. The decision to approve a drug, even if based on excellent science and adopted appropriately by practitioners, would lead to equal treatment for those patients across jurisdictions. However to fund such a drug other treatments would have to be given up and without national guidance about what to abandon, a new form of postcode rationing would be created.

    (xii)  The current systems operated by NICE do not take account of equity issues. For instance should technologies, which benefit the poor more than the rich be given a higher weighting in terms of benefit (ie equity weighted QALYs)? Such issues are very contentious. Current QALY measures value an additional QALY received by the poor as being of equal value to a QALY received by a middle class patient. Weighting issues should be explicitly discussed in the policy debate about the future of NICE.


  18.  The Committee is reviewing NICE in the light of key goals set out in A First Class Service. Each of the four questions will now be reviewed in the light of the preceding paragraph.

  19.  Is it providing clear and credible guidance? The quality of decision-making has been questioned in some cases (eg the case of Relenza where Dr Joe Collier in particular was very critical in the Drugs and Therapeutics Bulletin). Given the quality of the clinical trial data which is used by the CSM to determine marketing decisions, and which is used by NICE in its decision-making, it is inevitable that some advice will be contentious. This makes it important that initial decisions by NICE are reviewed as more evidence becomes available. This review process should be formalised so that industry and the regulator agree what new data should be collected and when reviews should be undertaken.

  20.  The guidance to the NHS is generally clear and, in a period of increased funding, the advice, particularly in the secondary sector, seems to be followed sometimes slavishly and sometimes not too well ie with the usual variation in practice endemic in all health care systems! The usual view appears to be that it has to be "owned" by local practitioners and where this involves an expansion in the clinical portfolio, it does not seem too difficult to achieve, given time. The Commission for Health Improvement appears to be attempting to police adherence to NICE advice.

  21.  Has it ended confusion by providing a single national focus? Doctors are easily confused as they are showered with advice about how to treat patients from the net and from pharmaceutical companies wishing to sell their products. There are over a quarter of a million health care web sites on the net and patients can log in to American and continental sites and carry their print out to their NHS consultations. The challenge for the doctor in declining such material and using NICE guidelines remains considerable. Given NICE has acted like a "girl who can't say no" (as in the Oklahoma musical!), the nice test will be when it rejects more drugs for use in the NHS and doctors have to take negative rather than positive messages to patient groups.

  22.  Is it providing guidance that is locally owned and acted on in the right way? In the absence of systematic appraisal of take up of NICE advice, casual empiricism indicates variation in local take up and ownership. The question begs a definition of the "right way". As argued above, the current relatively high cost per QALY cut off, the propensity of NICE to reject very few technologies and the difficulties of controlling the precise use of drugs once they are approved, means that such interventions may be used inappropriately and that NHS funding so consumed is not available for other more cost effective treatments.

  23.  Is actively promoting interventions with good evidence of clinical and cost effectiveness so that patients have faster access to treatments known to work? The evidence to answer this question is scant. Undoubtedly for some patients NICE guidance has led to the provision of treatments but the relative cost effectiveness of some of these approvals is relatively low (eg the drugs for obesity, motor neurone disease, cancer and influenza). Providing faster access for relatively cost ineffective interventions, has an opportunity cost as in deprives other patients of access to more cost effective treatments.

  24.  Is NICE independent? Failure to get NICE approval is a major threat to the cash flow of pharmaceutical and medical equipment manufacturers. Their capacity to fund research is very large and there is evidence of a general nature and not specifically linked to NICE, that the evidence base can be corrupted. The potential rewards for clinical and economic scientists to "manipulate" data in a biased way are considerable. Separately I have argued that research groups should be licensed and independently audited so that bad practice is better policed. As NICE progresses and becomes an even more significant impediment to the marketing of products of marginal cost effectiveness, pressure on the independence of researchers and NICE staff is likely to increase. It is important that these people are seen to be independent and transparent in their activities with public processes for reporting of conflicts of interest.


  25.  The National Institute for Clinical Excellence, like the Australian Pharmaceutical Benefits Committee which has operated since 1993, challenges the inventors of drugs, medical equipment and other new technologies to demonstrate that these products of their ingenuity offer significant health benefits at affordable cost to patients in the public and private health care systems. This task is enormous and challenging, not the least because the demand to demonstrate value for money has the potential to damage strong commercial interests. A Government influenced by those very same commercial lobbies has in the last year undermined the Australian Pharmaceutical Benefits Committee.

  26.  Whilst the work of NICE is essential to inform purchasers of health care and ensure that they deploy the NHS budget of £50 billion so that it produces the greatest level of population health improvement possible, there are areas where its performance can be improved. The following issues require more careful resolution:

    (i)  How was the cost-QALY cut off decided, and is it too high? Is NICE accepting new technologies too easily and, as a consequence, absorbing funding which would have been available for older technologies of proven and superior cost effectiveness such as hip replacements and cataract removals, where waiting times remain excessive?

    (ii)  How can NICE contribute to the avoidance of expenditure inflation induced physician discretion and failure to follow its advice on the targeting of treatments? Would it be efficient to discipline NICE by giving it part of the NHS budget to fund the technologies it approves, with it being responsible to purchasers for overspending on these treatments?

    (iii)  What can NICE learn from SIGN which focuses its evaluations on patient episodes of care rather than individual technologies? What should be the balance of investment by NICE in appraisals of individual technologies as opposed to treatment packages? Who is responsible and how should the collaboration of NICE and SIGN/HTBS be best implemented to ensure that their work is complementary and duplication is avoided?

    (iv)  Who should audit the quality of the science of the NICE appraisers? How can the supply of independent high quality research activity be sustained when some are paid inadequately for their work and industrial pressure to "bend" data is increasing as the commercial consequences of a failure to get endorsement by NICE is increasing. Is it time to have national and international accreditation of research quality offered by academic and consultancy groups so that corruption is minimised and its consequences made more significant?

    (v)  Is postcode rationing removed or merely altered by NICE given there is no advice available to determine the technologies, which are dropped to fund the products it, approves? Should health care benefits from technologies, which benefit the poor more than the rich be given an additional weight in terms of benefit assessment (equity weighted Quays)?

  Much current political and commercial practice in the UK is based on the teaching of Marx. Thus Groucho Marx argued: "the secret of life is honesty and fair play. If you can fake that, you have made it!" The yawning gaps between the claims made about new treatments and the evidence to sustain these claims is enormous. Regulation to ensure that this Marxist faking is minimised will always be complex and expensive. However this is not an argument for giving up, it is a reason to reform and improve essential bodies such as NICE so that cost effective health care is delivered to patients in a timely and humane manner.


  Maynard, A, Evidence based medicine: an incomplete method for informing treatment choices, Lancet, 1997; 349:126-8.

  Maynard, A and Bloor, K, Regulating the pharmaceutical industry, British Medical Journal, 1997; 315:200-1.

  Cookson, R, McDaid, D and Maynard, A, Wrong SIGH NICE mess: is national guidance distorting the allocation of resources? British Medical Journal, 2001; 323:743-45.

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