UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 503-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

Health Committee

 

 

National Institute for Health and Clinical Excellence

 

 

Thursday 17 May 2007

DR FELICITY HARVEY, MR SIMON REEVE, DR FIONA ADSHEAD and

PROFESSOR MIKE RICHARDS

 

PROFESSOR SIR MICHAEL RAWLINS and MR ANDREW DILLON

Evidence heard in Public Questions 1 - 174

 

 

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Oral Evidence

Taken before the Health Committee

on Thursday 17 May 2007

Members present

Rt Hon Kevin Barron, in the Chair

Mr David Amess

Charlotte Atkins

Mr Ronnie Campbell

Jim Dowd

Sandra Gidley

Mr Stewart Jackson

Dr Doug Naysmith

Mike Penning

Dr Howard Stoate

Dr Richard Taylor

________________

Witnesses: Dr Felicity Harvey, Head of Medicines, Pharmacy and Industry (MPI),

Mr Simon Reeve, Head of Clinical & Cost Effectiveness in MPI, policy lead for NICE,

Dr Fiona Adshead, Deputy Chief Medical Officer, Professor Mike Richards CBE, National Cancer Director, gave evidence.

Q1 Chairman: Good morning. I welcome you all to the first evidence session of our inquiry into NICE. I wonder if I could ask the witnesses to introduce themselves and tell us the positions they hold.

Dr Adshead: I am Fiona Adshead. I am Deputy Chief Medical Officer and Director General for Health Improvement, Department of Health.

Dr Harvey: I am Felicity Harvey, head of Medicines, Pharmacy and Industry group within the Department of Health.

Mr Reeve: Simon Reeve, I am head of the Clinical and Cost Effectiveness team in the Medicines, Pharmacy and Industry group in the Department of Health.

Professor Richards: I am Mike Richards, National Cancer Director at the Department of Health.

Q2 Chairman: I will start with the a nice easy question. NICE's decisions are often greeted with outrage and it has been suggested that this is due to unrealistic patient expectations. Does the Department need to address more the issue of the public's expectations of the National Health Service?

Dr Harvey: NICE has a very difficult job to do in terms of its technology appraisals and its clinical guidelines. It sets standards for the NHS and to do that it needs to be very independent. There are some occasions when some of NICE's decisions may not be welcomed by different groups of stakeholders but it is important to realise that NICE is held in very high esteem both in this country and internationally because of the sort of methodologies that it has which are very open and transparent and cover all the areas of its work programme.

Q3 Chairman: It just seems that it is increasingly criticised. What does the Department do to protect it, or does it?

Professor Richards: I am not sure that it is right to say it is increasingly criticised. Having lived through the last seven years in relation to cancer drug appraisals and the whole process with NICE, we have all taken criticism all the way down the line. Actually, on the whole, we have been very successful, particularly in the case of new drugs made available to patients who need them. We have had the analysis that has shown that these drugs are both effective and cost effective.

Q4 Chairman: It has often been felt that the Secretary of State, such as in the Herceptin situation, was not helpful as far as NICE was concerned as a body. Why do we not have interventions that NICE enjoys and help them along as opposed to putting pressure on them to look at drugs quickly and set timetables for them that a lot of people felt was unfair.

Professor Richards: I would actually defend what was done on Herceptin as being the right thing. We had an announcement in May 2005 about the results of the Herceptin trials. These were extraordinary results and they were founded on large numbers of patients, about 12,000, in those studies. The drug did not have a licence for use in early breast cancer at that point and the intervention from the Secretary of State was two fold: one, to say that the NHS must gear itself up so when the licence did come, and when NICE had appraised it, we should be in a position to give the treatment, and that meant being able to do HER2 testing; then the second bit was about saying this drug required an early referral to NICE so that it was appraised in parallel with the licensing process. I think both of those were absolutely the right thing to do.

Dr Harvey: If I might add, actually since November 2005 NICE developed the single technology appraisal mechanism and that was very much around some criticism of the Department and NICE in terms of drugs not being appraised up to 18 months or two years after they had their market authorisation. With the single technology appraisal system they actually get the dossier of information at the same time as it goes for the full marketing authorisation such that you can have NICE guidance to the NHS really within a couple of months of the drug actually having market authorisation in this country. It may be that the criticisms of the Department and NICE have been fair before that, but the STA process has now been running since November 2005 and it is now a much better way of making sure we have timely advice for the NHS.

Q5 Dr Naysmith: I find these answers somewhat complacent. It is true that this process has been speeded up a bit but that was one of our recommendations last time around even before you started to get criticism about it. I am glad it has happened and continues to happen. The more recent criticisms have not been of that sort, not so much about the timing but suggesting all sorts of flaws in the process. No-one wants to argue that NICE is not a good thing and a world leader. Are you saying that none of those recent criticisms are justified?

Dr Harvey: What one needs to remember is the methodology for assessing the cost effectiveness is an evolving science and with NICE we regularly look at their technology appraisal methodology, the last around 2003/2004. They had planned to look at it again this year in 2007 and that process is now under way. This is a methodology that does evolve. Clearly there will be some people who criticise some elements of it and it is very important therefore that this is a live methodology which is looked at periodically with a lot of stakeholder involvement to make sure that it is actually fit for purpose for 2007. We do need to remember that in terms of the credibility of the methodologies they have used to date they do actually have a lot of support globally as well. We know these are areas where there is a lot of debate and that is why I think this review is very timely, as I think do NICE.

Q6 Mike Penning: I am going to ask Mr Reeve to answer the first part of this question.  Can we go into one area where there has been criticism? What say does the Department have with the thresholds set by NICE for treatments, this arbitrary £30,000 figure? Should that be an explicit figure or should that be quality adjusted? What say does the Department have when NICE sets this £30,000 arbitrary figure?

Mr Reeve: I do not think it is set at a £30,000 arbitrary figure. It is published in its technology appraisal methods guide. The range it uses, which is over £20,000 of QALY, there are particular additional factors that need to come into play for a drug to be appraised positively, and over £30,000 it is explicit that those factors need to weigh in even more strongly. That is set out in NICE's published appraisal.

Q7 Mike Penning: I am asking what say the Department has in that. You tell me what NICE do but what we are interested in is what your department say in that.

Mr Reeve: In terms of the review that NICE is embarking on, the Department will be one of the stakeholders in that process. We want to be part and listen to the debate on that.

Q8 Mike Penning: Can you elaborate slightly? We are all stakeholders; we are all in the NHS. It is taxpayer's money being used for the arbitrary limit.

Mr Reeve: The approach that NICE takes to its methods reviews is to try and involve as many key stakeholders as possible in a series of specific workshops that are culminating in a public consultation on the revised methods guide to try to draw on as many of those inputs as possible.

Q9 Mike Penning: Is there a problem with NICE setting these priorities? I am being a devil's advocate here. Is there a problem when NICE set those priorities rather than the Department or the ministers?

Mr Reeve: Specifically thinking about the issue of the thresholds, it is so intertwined with the rest of the methodology you cannot view those numbers independently of all the other things NICE does as part of its appraisal methods. You cannot just pull those out and say that is the number and the rest of the methodology and NICE's appraisal approach stands apart from it.

Q10 Mike Penning: The government quite rightly is looking at treating many more people within the community than inside hospitals. That input from your Department is critical in NICE's decisions on treatment taking place. Is that the sort of thing that you are pushing as a stakeholder or is it something that NICE can just ignore?

Mr Reeve: We will certainly be participating in that process as a stakeholder. It will be going on over some months and the Department will want to be involved.

Q11 Mike Penning: I am slightly biased here because I think we can push that too far and we shut hospitals before we have the facility out there. If NICE is looking at this, this is a key government policy of treating more people in the community, but NICE must take that into consideration. I am not sure how much pressure or influence you are having on that.

Mr Reeve: The process is not yet really under way. It is important we respect the independence of NICE to look at its methodologies. Having said that, you do make some important points. One of the points I have heard said, which we would want to echo, is that it is important that when NICE is looking at new treatments it is not by default requiring people to displace other things that would be more cost effective if you looked at them.

Q12 Mike Penning: You are saying you are only starting to look at it now but this policy has been in place.

Mr Reeve: I meant in the context of the review NICE are doing this year of the specific appraisal methodology.

Q13 Mike Penning: Would any of your other colleagues like to say anything because I would like to hear what they have to say.

Dr Adshead: I think essentially what Simon is saying is the role of the Department is to assure ourselves that these issues have been considered fully and actually being clear that the review is taking place and that the best expertise is bought in. That is our role. Our role is perhaps not to duplicate the process through consulting experts but to assure ourselves that that process has been undertaken.

Professor Richards: It is absolutely right that the threshold or range of thresholds should be reviewed as part of the review of NICE but it is also important to remember that if the threshold was very high so that absolutely everything would be given, following on from what Simon said, that would not necessarily displace things that have not been appraised by NICE which might be equally or more effective.

Q14 Mike Penning: Is this threshold set in stone, this arbitrary £20,000 or £30,000?

Dr Harvey: In terms of the threshold, there is not one, as Simon has said; it is a range. It is £20,000 to £30,000 but then additional factors come into play above £30,000. We also need to remember that it is not done purely on cost of QALY, they also add in social value judgments. As the committee is probably aware, NICE do have the citizen's council who come up with the sort of social factors that should be looked at in addition to cost per QALY. It is not an arbitrary cut-off in terms of cost per QALY, it is all of these other factors being taken into the round. I think what we need to remember is that as a result of these you do actually get very expensive treatments through the NICE process so it is not true to say that because of the methodology they have that you only get the least expensive drugs through that. That is not actually the case. There is an example of Herceptin and there are also many other examples, for example infliximab for juvenile rheumatoid arthritis, gemcitabine for pancreatic carcinoma. These are not very cheap drugs per se. They are expensive drugs and the methodology is developed in such a way that you are able to look at the cost per QALY in relation to social value judgments which become increasingly important.

Mike Penning: The point I was trying to make is there could be clearly a conflict between government policy on how the health service is going forward and the decisions made by NICE, not just on arbitrary prices but where the care is taken. How closely are you working with NICE to make sure these policies are being addressed? That is why the argument was should it be driven by the department who are responsible to the taxpayer, through the minister or the Secretary of State, or NICE. I have heard the answers and I refer back to the Chairman.

Q15 Chairman: Do you advise NICE on existing policies, for example the drive towards providing health care outside hospital? We had the White Paper and when a statement is made by government like that is it naturally fed in? Is there a way it is fed into NICE and its decision making?

Dr Harvey: Clearly we do have discussions with NICE on policy type issues. The place that it really comes into play is within the work programme. As the Committee knows, NICE has a role in putting together the work programme through its expert consideration panels but it is finally decided and then given to NICE through ministers. We need to ensure that within the work programme that NICE is given that in terms of technology appraisals, guidelines and public health guidelines we are getting NICE to look at the sorts of issues that are very important for the NHS in its delivery of health care priorities and methods of delivering health care. They will be addressed particularly within the guidelines in terms of methods of delivery of care. That is also very important in terms of public health where it goes much wider than just the NHS.

Q16 Dr Taylor: Can I come on to the very difficult problem of costs? Is NICE recommending interventions that the NHS cannot afford?

Mr Reeve: It is important to look at the numbers. If one looks at the gross cost of all NICE technology appraisals, NICE publishes a cost impact assessment with all its appraisals and clinical guidelines. If one adds up the cumulative impact of the appraisals it has published so far you get to £1.2 billion.

Q17 Dr Taylor: The figure we have been given for 1999 to 2004 was £800 million.

Mr Reeve: There was a more recent figure we provided to the Committee in another context last year which was actually up until early this year. It is about £1.2 billion in terms of appraisals.

Q18 Dr Taylor: Can you say how much that is going to be each year?

Mr Reeve: No. £1.2 billion is the cumulative recurrence.

Q19 Dr Taylor: Over a course of about six years.

Mr Reeve: No. It is £1.2 billion a year at the moment. That is the cumulative impact of all the previous appraisals stacking up. In terms of your question about affordability, if you have £1.2 billion cumulative pressure and in the same period the cash flow within funding has been over £40 billion, that pressure accounts for about 3% of the growth.

Q20 Dr Taylor: We understand you build it into the payment by results tariff. How quickly does that happen and how do you do that?

Mr Reeve: It cannot be prospectively because we do not know exactly what NICE is going to say. When the tariff is being calculated for each year we will work in with the team that is working on the tariff the appraisals that we know about and can confidently build into the tariffs. We are building what we can and what is known at the point at which the tariff is worked out.

Q21 Dr Taylor: Is that going to make it easier for PCTs to actually afford what they are supposed to? We are talking only about the appraisals here which are mandatory.

Mr Reeve: It is part of a wider drive to help PCTs and the NHS plan effectively for the introduction of NICE guidance. Yes, we have those tariff adjustments, that is one thing building in, but the other thing that both the Department and NICE are doing is providing much more forward looking information for the NHS in terms of what is coming up on NICE's work programme and new drugs more widely. NICE have a forward planner on their website. The National Prescribing Centre has produced an annual CD resource pack of drugs NICE are going to be looking at over the next 18 months to help people anticipate some of those developments.

Q22 Dr Taylor: During our deficits inquiry we had evidence from people outside the NHS and the department saying that the cost of implementation was grossly underestimated. I think the figure from Nick Bosanquet's group was something like £500 million a year underestimated.

Mr Reeve: I am not familiar with that figure.

Dr Harvey: When the work programme is put together for NICE in the different waves, one of the reasons that it is actually the ministers who give NICE the work programme is that we need to take a view in looking forward of the cost of the overall waves. That is taking into account all of the clinical guidelines and all of the technology appraisals and the sort of costs that might mean in terms of implementation within the NHS. That is indeed part of the process.

Q23 Dr Taylor: Does that mean you are taking cost into account in deciding what you are going to refer to NICE?

Dr Harvey: In terms of the overall wave, what comes forward in terms of prioritised areas that the NHS needs guidance on, then yes we do look prospectively at the sort of costs. Clearly that is much easy for us to estimate in terms of the technology, be it a pharmaceutical or a device. It is slightly more difficult in terms of clinical guidelines but we do look at that and prospectively plan for that.

Q24 Dr Taylor: Is that the right way around? Is that the way you have to do it? In an ideal world you would be going for the things you know the NHS needs most.

Dr Harvey: In terms of how we put together the work programme, there are very set criteria on NICE's website as to how a topic can get in, the criteria it has to meet. In putting that together through the consideration panels, which are made up of experts in the different clinical fields, we get lists of priorities of areas that the NHS feels it wants guidance on. We involve commissioners in that as well. That comes forward to the Department for us to put a prioritised list to ministers of the sort of areas that NICE should be looking at. That does include new technologies that are likely to come to market over the next couple of years.

Q25 Sandra Gidley: Do you assume that everything is going to be approved? It seems counterintuitive in a way because there is a six month implementation? If PCTs do not have this forward planning they could find themselves in difficulties. There always seem to be pressure. The fact that not everything is approved would suggest that there is some spare money in the system somehow and clearly that does not happen. What is going wrong?

Mr Reeve: In terms of modelling, in terms of supporting the spending review process, we do not model that everything will be approved. We model that a certain proportion of this cost will end up arising from a positive NICE appraisal. It is an estimate based on historic trends. We do not know what NICE is going to say and what it is going to approve for which patient groups. It is a financial model.

Q26 Dr Taylor: Is there no temptation to refer the things that you know have a lesser cost overall?

Dr Harvey: It is very important for us within the work programme to refer the sorts of issues the NHS is going to need some guidance on. That becomes increasingly important. One knows that because if we have not quite got something in the work programme then there is more pressure in the system. We try, through horizon scanning, to make sure, both on the pharmaceutical and the device's front, that for the big issues that are likely to hit the NHS there will be guidance ready for them.

Professor Richards: I have a dual role in this regard because I chair one of the consideration panels for NICE, surprisingly enough about cancer. I am in on the process of deciding what should be referred to the Department of Health for a final decision and then it goes back to NICE for the work to be done. I can assure you that we look at what is in the patient's best interests and needs when we go through that consideration panel process exclusively.

Q27 Dr Naysmith: Exploring this area from a different perspective, there is clearly some sort of dysfunction between what NICE recommends in sometimes mandatory guidance and what PCTs over the country as a whole do. Not everything is taken up as it should be immediately or even at all in some cases. There has been a recent academic study from York University that suggests that PCTs use a lower threshold for funding interventions than NICE does. I know you have argued that there is not a £30,000 threshold, it is an area, but still a £30,000 different criteria coming into effect. Is there such a thing? Is there a difference between the way PCTs look at it and the way NICE does?

Dr Harvey: In terms of PCTs, certainly before a drug has been appraised by NICE, and we sent out guidance just before Christmas, PCTs do have a very important role in estimating the clinical and cost effectiveness of a drug or indeed a device before there is NICE guidance. Once there is NICE guidance there is a three-month funding direction in the vast majority certainly of all of the technology appraisals. Therefore, since that is a core standard within the standards for better health, and a standard that the Health Care Commission will actually look at, it is actually very important that PCTs do allow funding for positively appraised drugs after the three month period.

Q28 Dr Naysmith: What are we going to do to make sure that PCTs do not use a lower funding than NICE?

Dr Harvey: In terms of the positively appraised drugs where they have funding direction, this is an issue where there is now a responsibility on PCTs to report to the Health Care Commission within the annual health check annually. The first of those was actually in May 2006 when PCTs did a self-assessment. That data has gone back to the Health Care Commission and they would be looking at about 20 per cent of Trusts overall in terms of how well they are taking forward the core standards, of which the TAs are a part. Certainly in that self-assessment there were only 5% of PCTs saying they were not meeting that standard. Clearly it is an issue for the strategic health authority with the primary care trust to ensure that those core standards are being met.

Q29 Dr Naysmith: Let us assume there is a problem there. Do you think that NICE is actually forcing on PCTs decisions that they cannot afford?

Dr Harvey: I think that is where the work programme comes in and is very important. The work programme, once it has gone to NICE, is up on their website and it is very clear when different products are coming out. We are aware, and in fact NICE has now responsibility in terms of implementation, that there are tools that they can and are indeed providing now for trusts that help them in terms of looking forward to the sort of technologies that are likely to come and the sort of impacts that will have on them. Recently there was an Audit Commission report looking at implementation. That was also supporting what NICE is doing in terms of the sort of tools that they are now providing for primary care trusts to allow them to foresee the things that are coming down the line that they are going to have to implement.

Q30 Dr Naysmith: Do you think this is a mechanism for forcing PCTs to adopt priorities that they would not themselves necessarily think, remembering that primary care trusts were set up to look at local circumstances and make local decisions?

Dr Harvey: The reality is that before we had NICE, and we need to remember that NICE was set up as part of the quality strategy around trying to reduce the variability of uptake of new interventions. It was very difficult when every single part of the NHS had to make its own decision and assessment. NICE has a very refined methodology which it is now looking at again. It has a very refined methodology which allows a lot of that information to be given to PCTs. When we have drugs that have not been through the NICE appraisal, or indeed devices, PCTs need to do their own assessment of the clinical and cost-effectiveness of interventions and that is a huge workload. Rather than finding NICE difficult in this respect, it is actually something that allows PCTs to have an independent view of a technology, be it device or drug, that does give them a very good view of not only how effective it is but for which patient group it is effective.

Q31 Jim Dowd: Could I ask Professor Richards, while we have you, on a slightly tangential but related subject? I was listening yesterday on the BBC to some doom-laden cataclysmic projection or scaremongering report, in which they specialise, saying that within the near future we will not be able to afford more than half the developed drugs for treating cancer. I wonder if you want to reflect on that.

Professor Richards: In terms of cancer we are at a very exciting time where there are a lot of new drugs in development in the pipeline. If you look at the combined pipelines of all the pharmaceutical industry, over half of all the drugs that are coming through are related to cancer. That is very good news. Actually if you look at what has been licensed over the last seven years and has been approved by NICE, we really have a new generation of drugs that are targeted at what is specifically wrong in cancers, drugs like glivec for chronic myeloid leukaemia or Herceptin for breast cancer, or rituximab for lymphoma. Those are drugs which are targeted drugs which when I first trained as an oncologist were simply not around. Clearly this also puts pressure on budgets and I think everybody recognises that. One of the things we have to do is to look at what is cost effective. That is precisely what NICE does for us. From my point of view, I also have to look across the whole spectrum of cancer and say it is not just about drugs. There are a lot of other innovations that can save lives. Making sure people are aware of healthy life-styles factors, getting screening programmes introduced and early diagnosis are extremely important. Remember that we have to look at the whole of that. Equally we have to look at where we are not using the money we have got most effectively. I would point to an area where we could do a lot better. If you compare this country with other countries, we probably keep patients as in-patients for longer and I think we really need to bear down on that. It would be good for patients and good for the NHS. Actually if we can do that we give ourselves more head room to be able to introduce the very good new drugs that are coming through.

Q32 Jim Dowd: Are we being particularly successful in doing that as opposed to relying on the pill for every ill?

Professor Richards: We now have some extremely good pilots around the country about reducing the in-patient's days which I will be reporting on later this year. I am already convinced there is a lot we can do on that. We therefore can create more head room with existing budgets. Clearly I would also go on arguing the case for more funding where that is going to make a difference to patient outcomes.

Q33 Jim Dowd: Can I go on to direct anyone to the vexed question of resource implications of NICE's activity? It has been suggested that they should have a notional budget to try to assess the impact of their work, and even though part of their guidelines is to have regard to resources there is a feeling that somehow they operate in something of a vacuum beyond that. Would a notional budget be of any benefit?

Mr Reeve: I have heard of that concept. There is a risk it could be seen to be acting as a constraint on what NICE can recommend. Year to year you do not have an even flow of new cost-effective interventions. If you set an annual budget, you might be having to say no to something one year, that in the totality you would want to say yes to, because you had spent up to your notional budget. I would be wary of anything that would reduce the flexibility of NICE to take an appropriate case by case view on interventions as they came along.

Q34 Jim Dowd: The answer is no, it does not have much merit?

Mr Reeve: In my view it is better to allow NICE to take a view across the totality of NHS resource.

Q35 Jim Dowd: Part of the fear that PCTs have is precisely that unpredictability. They get an allocation at the start of the year and although these things do not drop completely from the clear blue sky things can happen with an implication that has not been budgeted for. What about the Department retaining levels of resource to be allocated once a particular technology appraisal was known?

Mr Reeve: That is quite dangerous. We have moved from a position we had a few years ago where we had a number of large central budgets in the Department of Health in Whitehall. There has been a consistent move to devolve those to the service because there is a feeling that PCTs can spend them better than Whitehall. There is a danger if you are holding money back that money will not get spent as effectively as it might if you devolved it to services and let them plan. What we specifically do on the impact of drugs, and that is only part of NICE's work but one of the sharper bits, is we do help PCTs project what they can expect their drug spend to be in a coming year overall and factor in things like NICE pressures. We do give them an idea of what we think they should be planning for on drug bill pressures specifically.

Q36 Jim Dowd: Allocating it to the PCTs and ring-fencing it for implications of NICE determinations would suffer from the same defect.

Mr Reeve: Yes, it would reduce the flexibility of local services to use their resources appropriately.

Q37 Mr Jackson: If I can start with Mr Reeve, the Office of Fair Trading recommended major changes to the current pharmaceutical price regulation scheme, as you know, with the introduction of a new system in which the price of drugs was based on clinical value. How might that value-based drug pricing scheme affect the work of NICE?

Mr Reeve: I need to contextualise this clearly. The OFT is being considered by government and ministers have not agreed a response. It is not something I can comment on in detail. Clearly what OFT has recommended, looking at face value, would have implications for the work of NICE in terms of volume and focus and they have said this. I do not feel I can get into specifics because the government is still considering how it responds to the OFT.

Q38 Mr Jackson: I wanted your view on it rather than waiting for the government.

Dr Harvey: We are going to need to look at everything in the whole of the context around this in terms of OFT. As Simon says, it does cover how you might value base drugs but also the pricing more generally. All of those issues are currently being appraised within government and it is what we will need to be responding to in the government response in the coming time.

Mr Reeve: It is fair to say that we are aware of the need to bear in mind the implications and the deliverability of any role that is envisaged for NICE in what comes out of the government's response to OFT. It is an issue we are very, very conscious of.

Q39 Dr Stoate: I am sure you would agree that cancer spending in this country has always been disappointing. I am sure you also agree that it is now getting a lot better and that much more money is being spent on cancer treatment and we are getting much better outcomes than we were getting which is excellent news. You also expressed great pleasure in the fact that half of all new drugs coming through are cancer drugs. There was obviously a big smile on your face when you said that. Clearly there are implications for that type of situation. Can the current system cope with such a huge increase in cancer spending? Does it put undue pressure on other parts of NHS spending?

Professor Richards: I would argue that certainly the evidence to date is no. We are looking very carefully, in the context of developing the cancer reform strategy, at what we are spending on cancer, what other countries spend on cancer and within that what we spend on cancer drugs and what other countries spend on cancer drugs. Remember that, as I indicated earlier, the largest single component of expenditure on cancer is in-patient care, considerably larger than the spend on drugs. There is a lot we can do, I believe, to make things more cost effective. We also need to look at variations in cancer spend across the country. We are doing that through programme budgeting which we did not have available two or three years ago. We can look at what one PCT spends against another on cancer in the round not just on cancer drugs. We can start looking in the care pathway to see how much we are spending on prevention and how much are we spending on treatment and care. Remember that the Wanlass report made it clear that if we really wanted to get the biggest gains we needed to put more effort into prevention and early detection and certainly that is what we want to do. There is a great deal we can do but of course I also want to make sure that good new drugs get used.

Q40 Dr Stoate: Why is it that PCTs get so upset when a new cancer drug is approved and they say that is £20 million on our budget which we have not got? Why do they do that if it is affordable in the round?

Professor Richards: That leads me on to the implementation of NICE's guidance when it comes to drugs. This an area we have looked at in detail and I have published reports both in 2004 and 2006 on the uptake of cancer drugs. As you will know, we did show in 2004 that there was unacceptable variation between cancer networks and we said that. When we looked into the reasons behind that, there were a number. We went to the cancer networks and asked them as well. First of all, in answer to an earlier question, it was not about the PCTs denying the funding. Once the funding direction has been given and NICE has been given a positive appraisal, it is not then that the PCTs were not funding the drugs. There had been some problem about PCTs not necessarily funding enough of the other costs, like the costs of the nurses and pharmacists because obviously you need more of those to deliver the drugs. There was a problem at a local level with forward planning. We very deliberately asked the strategic health authorities with their cancer networks to come up with action plans. We repeated the study in 2006, after an 18 month gap, and what we saw were two things that mattered. First of all, there was a major increase in the uptake of drugs. The average increase in uptake was 47% so a huge increase in an 18 month period. Equally importantly the variation between networks had decreased for each and every drug. We are moving in the right direction on that by focusing our attention on it and planning.

Q41 Dr Stoate: I accept that. You are right that they are paying for the drugs. What they are saying is that is causing difficulties elsewhere. Because they are paying for the drugs, they are having to make difficult decisions elsewhere in their budget. Do you think there is too much distortion of other budgets going on because of this drive to improve cancer care?

Professor Richards: If I was saying every single drug for cancer has to be allowed in just because it is cancer, I could be criticised in that way, but the whole point of having an organisation like NICE is it takes an objective look. It takes a look at all new developments going on in health care. The fact that NICE then says they believe these drugs are both clinically and cost effective gives me the assurance we are asking for the right drugs to be brought in by the NHS.

Q42 Dr Stoate: The BMA only last week said that they did not think the NHS was any longer affordable. We would have to have a core service that the NHS could guarantee and everything on top of that you would not be getting on the NHS. If the BMA are raising those alarmist issues, they must think there is an issue about the budget.

Professor Richards: People raise concerns but I do not actually believe we have got to anything like that point yet. We need to make the NHS more efficient and we can still do that. We have seen an increase in expenditure. We have seen an increased expenditure on cancer but we have also seen it in other areas as well. What is more, we are seeing the better outcomes for it.

Q43 Dr Stoate: Do you think chemotherapy is taking too big a slice of the cancer budget and do you think it could be distorting priorities away from things like radiotherapy and other types of care available to cancer patients?

Professor Richards: It potentially could and part of my job and the job of the cancer reform strategy we are developing is to make sure we get the right balance across the whole spectrum of cancer. Do I think it is taking too much of it now, no I do not.

Q44 Dr Stoate: How can we make sure that clinical guidelines carry as much weight as technology appraisals?

Professor Richards: That is difficult. Clinical guidelines are highly complex. Some of the clinical guideline documents run to several hundred pages. If you are looking at the whole of a guideline for a particular cancer like lung cancer or prostate cancer, they can be very lengthy documents. I believe the way in which we can make progress on that is through measurement, through audit. What we need in the health service is much better knowledge of what is happening and feeding that back to the clinical teams which in itself will improve outcomes. We have seen this where we have good measurements, for example on the breast screening programme. We have excellent measurement there. We feed the information back and it improves the quality. We have guidelines, we have measurements and we got improvement. That is what we have to do across the whole of the field of cancer not just screening.

Q45 Dr Taylor: How do you ensure that drug treatment for the rarer cancers is not overlooked? The major cancers have the huge pressure groups but the rarer ones do not. How do you protect the assessment for treatment for them?

Professor Richards: If you look at the drugs that have been appraised by NICE, you will find that a whole lot of them have been appraised for relatively rare cancers, brain tumours for example being a current example, ovarian cancer. There are lot of the different cancers. My job is to make sure that we get treatment across the spectrum, remembering that the so-called less common cancers, all the ones that are not in the top four, actually account for 52% of all cancers. We do make sure that the drugs for lymphomas, gynaecological cancers, the lot, are appraised.

Q46 Charlotte Atkins: Dr Adshead, despite what Professor Richards says in terms of cancer, our evidence demonstrates that the take-up of NICE guidance is pretty uneven. Is that your experience? Do you think that is the case and, if that is the case, why is the compliance with NICE guidance so low?

Dr Adshead: I think, as Felicity has already said, the evidence we have from self-assessments from the Health Care Commission would suggest that is not necessarily the case. Obviously there is quite a challenging environment in terms of commissioning, of bringing clinicians on board through primary care and through hospitals as Mike has described. We need to be vigilant to make sure that we build on the knowledge we have from the Health Care Commission but we also make sure, as we are doing in public health, that we consider how we can evaluate what impact the guidance is having rather than just assuming we know that is the case. The issue is we need to have a number of different mechanisms for checking that.

Q47 Charlotte Atkins: That is right because certainly what our evidence says is that there is a mismatch between what PCTs declare in relation to what they are doing on NICE implementation and what actually happens. How do you get to that if the information you are getting is we are implementing it OK but people on the ground, my constituents, know they cannot get their IVF treatment or whatever? It is not available on the ground.

Dr Harvey: In terms of the work the Health Care Commission is doing, this year they have looked at the core standards but they are now looking at the developmental standards. Obviously the clinical guidelines and the public health guidelines are the developmental standards so they will be looking at how they are bringing those guidelines into developing their services. I think the other thing that is quite important in terms of NICE's products is that they have also now started developing commissioning guides. Those commissioning guides are very much based around the clinical guidelines. That means it is more easily accessible for PCTS in terms of commissioning services to have help from NICE in terms of how they might do that. I think it is a matter, as Mike was saying, about having information and acting on the information but it is also about making sure that we have better tools that make it easier for primary care trusts to use the guidance from NICE in terms of improving the quality of services.

Q48 Charlotte Atkins: Is not the issue here not the lack of guidance but the fact that they do not think they have enough money in their budgets to fulfil all that NICE is recommending.

Dr Harvey: In terms of the guidelines, because they are developmental it is a matter of those being brought in over a period of time. Clearly the guidelines are very much around the evidence of the most clinical and cost effective way of developing and delivering those services. Therefore, there are benefits to trusts in terms of commissioning their services in line with those. We do realise that is something which has to take place over a period of time.

Q49 Charlotte Atkins: If PCTs are required to reduce their deficits, and take mine of North Staffordshire PCT which currently has a £4.1 million deficit which they will clear in the next year, in that situation it is obviously the case that they cannot follow through on NICE guidance if they are under pressure to reduce a short-term deficit.

Dr Adshead: One of the key factors to remember in this is we are also looking at how we can get better value for money for the money we are putting into the system. Certainly for public health when you are looking at things like the smoking cessation intervention guidance what we are trying to do is to make sure that the resources in the system are applied in the best way. At the moment NICE will be looking in the future at management of alcohol use disorders. We anticipate that will reduce costs within the system. As the growth in the NHS budget does reduce, it is going to be increasingly more important that we use the best evidence, as we always strive to do in commissioning, to provide the most effective treatments for the public. Obviously commissioners review their service programmes over time and it is going to become increasingly more important that this kind of information is available for them so that we can get the greatest impact and clinical outcome for the money that is in the system.

Charlotte Atkins: I certainly applaud the new focus on public health and hopefully July 1 will help us move forward even more in terms of reducing the costs of ill health.

Q50 Chairman: When you talk about implementation, what happened to the guidelines on infertility particularly around IVF? They were published years ago. It was immediately announced by the department the guideline in relation to three interventions which had very little eligibility criteria outside an upper age for a woman. It was then put down to one intervention next year. I cannot remember the exact year now. I brought this up with the Prime Minister at the time. They said it will not be long before we have the real infertility guidelines implemented but that is not the case. We still have areas where PCTs will refuse to give even one intervention on IVF. Will we ever see the implementation of NICE guidelines in that area?

Dr Harvey: The evidence we have is that most PCTs are offering one, a quarter are offering two cycles and a few are offering three cycles. What we are trying to do work is work with the Infertility Network UK on a three-year project to try and work with PCTs around the infertility services that they have got to try and improve implementation of the guideline.

Charlotte Atkins: Could we have the evidence of that?

Q51 Chairman: I would like to see the evidence. What I would like to say to you is most are giving one but we know some that are not. I know some that are not. What action is the Department taking of those that are not even implementing one IVF?

Dr Harvey: As I said, we have a project going with Infertility Network UK but we can certainly provide further information for the Committee if that would be helpful.

Q52 Sandra Gidley: You are not doing anything to the PCTs themselves who are not funding this. It is all very well working with the Infertility Network but they are the ones who are complaining about lack of access to service. What are you doing with the PCTs and strategic health authorities?

Dr Harvey: This is the sort of occasion where the strategic health authorities will be working with primary care trusts around accessibility to services.

Q53 Sandra Gidley: But do they? Hand on heart, do they unless somebody like a bolshie MP complains?

Dr Harvey: We would expect them to be having those discussions. This year also the Health Care Commission will be looking in more detail around the standards that cover all of the clinical guidelines and looking at what primary care trusts are doing about implementing those.

Q54 Dr Stoate: Are there any actual sanctions for people who systematically refuse to implement clinical guidelines? We know there are with technology appraisals but what happens to PCTs who, for whatever reason, will not implement the clinical guidelines? Is there any sanction that the government can take?

Dr Harvey: It becomes increasingly important as the Health Care Commission is looking at these.

Q55 Dr Stoate: What sanctions are there for those who refuse to do it? Are their sanctions? Can you take them to task or is it just we will carry on working with them? When you have carried on working with them and they still do not do it, what do you do then?

Dr Harvey: This is where we would expect the strategic health authorities to be taking management action.

Chairman: It might be useful if you could let us have further information on the implementation of the infertility guidelines, particularly if you are looking at local criteria for IVF treatment and whether or not that is different from one part of the country to another. It may be anecdotal but my information is it does quite largely differ and as a consequence of that the likelihood of getting treatment, even if you are offering one or two or in some areas three, is very difficult to get into the system.

Q56 Dr Naysmith: If there is any sanction that a strategic health authority can bring to bear on PCTs, can you let us know what it is and, if there is not one, what you can do about it?

Dr Harvey: We would be very happy to provide further information on this. The reality is in terms of the core standards they are supported by directions and therefore there is very clear action that can be taken. The developmental standards are not supported by directions in the same way but, as I said, the strategic health authorities would be expecting to see with the PCTs how they are implementing NICE guidance which are standards for the NHS and which support the national service frameworks. We would be happy to supply further information.

Q57 Mike Penning: You picked up the feeling here that we are quite astonished at the complacency, to be frank, of the descriptions you just made, talking about PCTs that are in huge deficit and then saying you are going to look at public health interventions when that is the first thing that gets cut when there is a budget cut. PCTs do not have the budgets to implement some of these NICE guidelines so you have a postcode lottery going on. Instead of answering the questions, you have gone on about interventions in public health. We all know, we hear all it in our surgeries every week, they are the cuts that take place first. You must have known these questions were going to be asked of you when you came to give evidence. Why have you not come forward with what we are going to do to have a level playing field for health within the country where there are real problems in deficits in IVF and in other areas? You wanted to answer the questions earlier, Dr Harvey, perhaps you would like to answer that one.

Dr Harvey: I think that is where it is very important the role that the Health Care Commission has.

Q58 Mike Penning: You pass the buck again. It is the Department that is giving evidence. My colleague, Charlotte Atkins, asked you in areas where there are deficits in her constituency, particularly in mine as well, they have not got the money to implement the NICE guidelines. The answer we got from your colleague was "We will look at public health intervention." That has already gone because we they do not have the money for it. Why are you palming it off? Why can we not have an answer from the Department as to what you are going to do and, as my colleague said, what you are going to do about it when the PCTs cannot bring this in, whether they do not want to or cannot afford to?

Dr Harvey: That is why we are working with other bodies like the Infertility Network UK to look at exactly what the issues are and to facilitate.

Chairman: You did say you would write in on that issue and we would greatly appreciate it if you would do that.

Q59 Mr Campbell: You say that the NICE guidance has helped to secure faster access to patients to improve their treatment. What do you base this on? What is the evidence?

Dr Harvey: It is information around the intervention direction that supports technology appraisals where we know that it is only 5% of primary care trusts who are self-reporting that they are not taking action. Also with the direction, if there are occasions where we hear that people are not having access to interventions, a positively appraised action can be taken and is taken. I have to say we do not hear very many. I am not aware of any we have had recently where people have come forward to us to say they are not able to access positively appraised drugs. We have always said if that is the case then strategic health authorities will intervene.

Q60 Mr Campbell: There was the case of the motor neurone disease where the take-up was slow and not very effective. Are you aware of that?

Mr Reeve: To be honest, I do not recall that specific example.

Q61 Mr Campbell: There were two others but I have given that as an example.

Mr Reeve: There are number of factors affecting uptake. It is true that some positively appraised NICE drugs are taken up faster than others. We have some real success stories of an atypical antipsychotic, for example, and how the uptake is pretty much exactly as NICE projected it would be if everyone followed the overall level of prescribing, as far as the level NICE thought it would be if the guidance was implemented.

Q62 Sandra Gidley: There are huge variations?

Mr Reeve: There are a number of factors. It is not just the financial factor. The funding direction effectively moves. There are issues about actually integrating into services.

Q63 Mr Campbell: There are huge variations in different areas in take-up.

Dr Harvey: Those are some of the issues we have been looking at through work on the long-term leadership strategy where we have done an analysis of uptakes of many different groups of drugs across the UK, not just across the UK but also looking in comparison with other countries to see where we are in terms of uptake and speed of uptake in comparison with Europe. As Simon said, some of the particular groups of drugs, like the atypical antipsychotics, but also smoking cessation, anti-obesity and the anti-TNFs were extraordinarily good and the speed of uptake of innovation is faster than you might otherwise expect. It is not true that we are a slow implementer in all areas. It is true that many people have criticised the UK in that we are slower uptaking innovation than some other countries which is why we are working on it quite actively.

Q64 Dr Naysmith: The alternative explanation of that atypical antipsychotics uptake was the line would be drifting slowly upwards until you get the approval and then it shoots up. People will argue that you have that long chunk at the start where had it not been blighted by NICE it would have drifted up much more quickly.

Dr Harvey: That is why we have also put out the guidance we did in December of this year around advice for PCTs that they do need to look at drugs and look at the clinical and cost effectiveness of them before NICE guidance comes out, and also named various sources they could look to help them in that regard. That is why it is important that we manage to get big technology appraisals onto the single technology appraisal system quite early on so there is not a long lag phase after market authorisation.

Q65 Mr Amess: It is very interesting considering our inquiry six years ago to reflect on the answers that we have been given today. I do not think any of you gave witness evidence last time. You were not with us. Why do we have Dr Adshead instead of Dr Gupta?

Dr Adshead: Sunjai Gupta is one of my team. I felt that as I had been actively involved in establishing the public health component of NICE and leading it that it would be more appropriate for me to be a witness.

Q66 Mr Amess: Mr Reeve, how long have you been in post?

Mr Reeve: Two and a half years.

Q67 Mr Amess: I asked similar things six years ago so any of you may answer. Are there any circumstances under which there would be political interference in decisions that the National Institute for Clinical Excellence make?

Dr Harvey: NICE is an independent organisation, therefore we set the work programme, the budget, and we have regular accountability discussions with NICE, but in terms of once they have their work programme then they are independent. They have set their methodologies and the conclusions they come to are their conclusions.

Q68 Mr Amess: The four of you agree, and I assume Dr Harvey is speaking for the four of you, that there are no circumstances whatsoever that there would ever be any political interference.

Mr Reeve: I think it would be very, very difficult even if one wanted to. Actually the appraisal committees and the guideline development committees that NICE use have a degree of independence in themselves. They are their own people and they will come to their conclusions. I totally support that.

Q69 Mr Amess: Professor Richards, as you and I have had conversations about cancer services in Southend, what is your view?

Professor Richards: My view is look at the evidence. I can certainly look across over 40 different appraisals for cancer drugs and I do not believe there has been any political interference in that process. We have let NICE get on with its job and I am very glad they have done it.

Q70 Dr Naysmith: There have been one or two cases where they have been asked to look at things.

Professor Richards: I would say on Herceptin what we decided to do was to ask them to do the drug early. That was a political decision if you like. That was a decision that came from ministers but the actual assessment of Herceptin was done independently by NICE without my involvement or anybody else's.

Q71 Mike Penning: If the Secretary of State had not intervened and asked that it be looked at early, would it have been one month, two months or three months? How much earlier was that intervention?

Professor Richards: That was precisely the point at which we brought in the single technology appraisal process, aka a fast-track process. Yes, NICE was in the first batch that were looked at in that way and I am very glad because I believe we needed a fast-track process so we did not have long delays between licensing and drugs being appraised. I think that was the right decision. NICE came forward with proposals about how they could do that, they were accepted and now we have a fast-track appraisal process. I for one am very pleased about that.

Q72 Mr Amess: We have the answers on the record. The paper on appraising orphan drugs which was published by the National Institute for Clinical Excellence last year proposes evaluation by an ultraorphan drug evaluation committee. The Minister for Public Health last week in a written answer actually decided to reject that proposal. I thought it would be good to ask - and I am going to ask the next witnesses the same question - why that was.

Mr Reeve: It is important to be clear we are talking about ultraorphan drugs which are the really, really rare ones. It is not just orphan drugs where NICE has looked at a number of orphan drugs for rare cancers for example. The work that NICE did on ultraorphan drugs was an exploration of whether it would be possible to run these rare drugs through a separate kind of appraisal system. They concluded it would be possible to manage them in that way. Having said that, ministers decided that there were particular issues that prompted that around a group of drugs for rare genetic disorders and a decision was taken that there was a better way of supporting patient access to those drugs, which was to incorporate them into the national specialist commissioning network rather than put them through a NICE appraisal. You did not need both basically was the reason that was done.

Mr Amess: We will find out if the next witnesses are content with the answer you have just given.

Chairman: Could I thank you all very much for coming along this morning and helping us with this first inquiry. We think this may run into the autumn and potentially beyond depending on how you respond to the OFT report. We will wait and see what the months bring.

 

Witnesses: Professor Sir Michael Rawlins, NICE Chairman, and Mr Andrew Dillon, NICE Chief Executive, gave evidence.

Q73 Chairman: Good morning. I wonder if I could ask you to introduce yourselves and the positions that you hold for the record.

Professor Sir Michael Rawlins: I am Michael Rawlins. I have been chairman of NICE since it started off in 1999.

Mr Dillon: I am Andrew Dillon and I am chief executive of NICE.

Q74 Chairman: Welcome to this first session. Could I ask you if NICE were fully in charge of selecting and prioritising topics for appraisal, what criteria would you use?

Mr Dillon: We would use the same criteria that we have at the moment.

Q75 Chairman: That is about the end of the inquiry really! What you were appraising, would there be a different approach to what the Department does?

Mr Dillon: I do not think so because what we need to do with the inevitably limited capacity - however big, NICE's budget is going to be limited in terms of what we can actually do in the five programmes that we are running at the moment - is to make sure we are addressing the questions that those who are delivering services in the UK health care system need answering. The selection criteria we are using at the moment is calculated to get just those questions through to us.

Q76 Chairman: If the budget was different, then maybe your decision making, not the criteria but what you looked at and how you looked at it, would be different. That would influence how NICE worked.

Mr Dillon: It would not change the decisions we make. It would not change the way we go about making the decisions but if you double the Institute's budget we can do more more quickly.

Q77 Chairman: One of the recommendations of this Committee in the influence of the pharmaceutical industry report was the issue of resources for NICE. Has that changed much since that report?

Mr Dillon: When we saw you in 2002 we were running pretty much two programmes, now we run five and our budget has increased. In 2002 we were running at about £15 million we now run on £30 million. The institute has grown significantly since we last saw you and we are doing a lot more.

Q78 Dr Naysmith: On a slightly different tack to the original question, since you mentioned the drug industry, there is a quite a feeling around that somehow or other the pharmaceutical industry has at least a role in setting the agenda for what is considered by your committee. It is a long and tortuous process to get there through the Department of Health. Are you saying that if you were completely independent you would either resist that pressure, if you believe it exists, or not?

Professor Sir Michael Rawlins: Resist the pressure from the pharmaceutical industry to exclude or include things? No, we have to act in the best interests of the NHS and the patients it serves not the pharmaceutical industry or anybody else for that matter but exclusively for the NHS. The criteria we apply would be, as Andrew says, as they are at the moment. In relation to a significant new advance: Is it likely to have a significant public health impact? Is it likely to have a major budgetary impact? Is it an area where NICE can give added value, particularly in areas where there are uncertainties?

Q79 Dr Naysmith: I cannot believe that the pharmaceutical industry does not have an influence on those things, even if it is publicising the drugs that you want to see.

Professor Sir Michael Rawlins: They, of course, produce the new drugs, so they have influence in that sense. They do the studies and they decide which studies and which indication to look at, so they influence it in that sense. Whether or not they are selected for appraisal is not their decision; it is our decision. When we first started, we were asked what would happen if the company did not want to cooperate and we said we would do it without them.

Q80 Dr Stoate: Surely the Herceptin decision was driven to some extent by the fact that there was certain pressure coming from patient groups which we have to assume was at least in part influenced by the drug company. The whole furore about Herceptin, before they had even applied for a product licence, in fact, was driven tremendously by a very high pressure campaign. Surely there must have been some influence there, certainly on the political decision and ultimately on your work.

Professor Sir Michael Rawlins: I do not think the independent members of our advisory committees would have been influenced by that at all. If they felt it to be cost-ineffective, my goodness me, they would have said so! And they might even have enjoyed saying so in the light of all the hoo-ha.

Q81 Dr Stoate: Certainly there was intense pressure.

Professor Sir Michael Rawlins: There was a lot of hoo-ha. To be honest with you, it was an absurd situation: from April 2005 until late 2006 there was nothing in the public domain about its efficacy or safety except on the investors' website of Roche and that is not a place you find out the details of the effectiveness or safety of a product.

Q82 Mr Campbell: How does NICE estimate the cost of a medicine or treatment for the National Health Service?

Mr Dillon: We do that once we have formulated the recommendation. Once we have done that, we look at the way in which the NHS is using the intervention at the moment: if it is something that is already in use, or, if it is not, we look at the patient population that is likely to benefit based on our recommendations. We make a series of assumptions about the likely take-up because, even if something is recommended without restriction, not every patient will themselves want to use it. We make that series of assumptions and then we do what we call our net budget impact calculation. We do that at a national level and we produce a handy little spreadsheet which local PCTs can use, plugging in their own data, so that they can make a local health economy calculation of budget impact.

Q83 Mr Campbell: If there is a drug treatment and in one particular area there are two patients who need it and the drug has an enormous cost, say £30,000 a month, what would happen in that case?

Mr Dillon: We made a recommendation that has those characteristics. That is more like the drugs developed for very rare conditions that you were asking your Department of Health colleagues about a few minutes ago. As they said, the recommendations on the use of those drugs are currently made by a specialist commissioning advisory group rather than by NICE.

Q84 Mr Campbell: That is passed on to the local health authority which either decides to buy them or not to buy them at the end of the day.

Mr Dillon: As I understand it, the effects of the national specialist commissioning advisory group, because they are acting collectively on behalf of commissioners, is to decide how those treatments are purchased, so my expectation would be that the decisions of that advisory group would be implemented by local PCTs. But it is a distinct activity for those very rare conditions. Drugs for treating those very rare conditions have not been referred to NICE and they have not been subject to NICE guidance.

Mr Campbell: In my constituency I have two campaigns, one for a little girl who has a very rare cancer and one from a fireman. The fire station where the fireman works has now run a charity to get the money to buy the drugs. It is not a big thing but it has a big price obviously. I find it offensive that this sort of thing has to happen, but I suppose it is not your fault at the end of the day.

Q85 Sandra Gidley: When we had our previous inquiry, it was fairly obvious that quality-adjusted life years (QALYs) were a fairly inexact science. Presumably they have refined a little over the last few years. In your opinion, what would be the strengths and weaknesses of the QALY as a measure of patient benefit?

Professor Sir Michael Rawlins: The QALY is a measure that allows us to compare the value, the health gain, of one intervention for one condition with another intervention for another condition. It has been researched extensively. There are hundreds and hundreds of articles about it. It has been investigated in Europe, in North America, in South America, even in China, and it is a reasonably robust approach to utility; in other words, the health gain. There are uncertainties, and we can go to some of those, but the important thing is that we recognise that not everything can be expressed necessarily in QALYs. That is why we expect our advisory bodies to use the cost per QALY and health economic assumptions and calculations and estimates to inform decisions but not to be ruled by them. That is why, as previous witnesses explained, we do not have a strict threshold of £30,000 and you are out if it is above. We have been as high as £48,000 before on one occasion. We use it as a tool but not as the rule.

Mr Dillon: To add to that, the essential concept of a QALY has not changed in the six years we have been operating. The economic modelling - the basis of the economic assessment in the form of a model which needs to exist to generate the cost per quality-adjusted life year - has noticeably improved, and that is partly because of the experience those economists who work with NICE and those who work with manufacturers have had as a result of the demand that the Institute itself has generated for those economic models. The other thing that is changing but has not changed enough is the extent to which quality-of-life measures are incorporated in terms of the clinical studies that are run generally by those who are manufacturing or in some other way promoting the interventions that we appraise. We need that quality-of-life data in order to make the most of the quality-adjusted life year measure. That has improved and changed. Both of those will continue to improve, undoubtedly, as we go forward.

Q86 Sandra Gidley: You hinted at some downsides. What would they be?

Professor Sir Michael Rawlins: One of the imponderables, in a sense, and we have commissioned research into this, is there is a mantra of a QALY is a QALY is a QALY, so, if you go from 0.4 of a QALY to 0.6, that is the same as going from 0.8 to 1.0. In other words, it does not take into account the severity of the underlying condition. Intuitively, I am not sure that is right. There is a lot of research going on, as we speak, and which we have commissioned looking into that and whether one should not do it slightly differently. The point is, though, the way it is done at present is not just the way NICE does it, it is done worldwide. Most developed countries use the technique, use the methodology, and it would be a big change if we were to change. I think it is the sort of area where we should be prepared to change if we have evidence that it would give a more equitable, fairer answer.

Q87 Sandra Gidley: We have had some criticism in the submissions about the way QALYs are worked. There has been a particular example recently with the Alzheimer's drugs. A lot of people think the costs to carers have not been fully factored in. How would you respond to those allegations?

Professor Sir Michael Rawlins: As I am sure you understand, Chairman, we cannot talk about Alzheimer's, but I can talk about the perspective that NICE uses in its economic evaluations and it is a very important issue. In our clinical guidance programmes, we take into account the cost to the NHS in personal social services. That is because our statutory instruments limit us to that perspective. It would be possible, if Parliament wished us to, to take a broader economic perspective, but that, to be honest, is your decision, not ours. Our statutory instruments limit us to the perspective we take. I am not sure how much of a difference it might make. It is not as intuitively obvious as to what the implications would be. It would need to be thought through and modelled rather carefully.

Q88 Chairman: Are you basically saying, Professor Rawlins, that you take, potentially, the cost of carers but not the cost of unemployment?

Professor Sir Michael Rawlins: We do not take the cost of unemployment. We take into account the health related costs to carers: if it is going to cause them illness and so on. We do not take the cost of unemployment, no, or disability benefits or those sorts of things.

Q89 Mr Amess: Welcome back, gentlemen. You are certainly survivors. You have outseen a number of secretaries of state and yet again a new dawn is breaking. The initial National Institute for Clinical Excellence guidance is often based on weak evidence and modelling. What are the challenges of subsequent changes or revisions to guidance?

Mr Dillon: Capacity is one. We made a commitment right at the start that we would keep everything we produced under review. With the exception of the interventional procedures programme that is exactly what we do. Whenever we publish something, we publish a date, and that is the date on which we will take a look at the evidence again to see whether or not there has been a material change, a change that would cause us to think we need to review the recommendations. If that is the case, we will either re-run the original piece of work or in other circumstances we will combine it with related topics, or we might, for example in the case of what we call a technology appraisal drug evaluation, incorporate it into an upcoming clinical guideline so that it forms part of a broader suite of recommendations. We try to be smart about how we do this because we have limited capacity. We do not want to become simply a maintenance organisation for the work we have done. We need to maintain the capacity to continue to do new things.

Q90 Mr Amess: Would you agree with that?

Professor Sir Michael Rawlins: Absolutely. In a sense, we are almost on a treadmill, because there are new things coming along but we also have to make sure the previous appraisals guidelines are up-to-date too. It is an increasing, if you like, worsening problem for the future.

Q91 Mr Amess: Particularly thinking of guidelines on ME the quality of the work of your assessment panel has been criticised for not including the right experts. We can argue about what an expert is, but how would you respond to that?

Professor Sir Michael Rawlins: All our guidelines are guidelines. We always have experts in the condition but we also have more generalists to give a broader view and we also include two patients or, in the case of children, the parents of patients with the particular condition. The patients make a very valuable contribution. Sometimes people have accused us of being politically correct, and it is not that. It brings something very special. We have set up a unit in NICE to help patients, because it is quite daunting if you are a patient and you are suddenly sitting surrounded by ten very distinguished professors of whatever it is and so we help them and they come back and tell us how they have found the experience of spending two years on a guideline development group. We also heard from professionals how important the patients have been. They bring a different perspective sometimes, a more down-to-earth one, and remind them of what life is really like if you have depression or multiple sclerosis or whatever. So we have a broad base and, of course, the guideline development group also has that liberty and often does invite other experts in other areas. If you try to get everybody on, then the whole thing becomes unmanageable. Our guideline development groups are about 15 people but they get expert advice too.

Q92 Mr Amess: Given your expansion over the past few years, I think the points you have just made are not widely understood, and perhaps some sort of public relations exercise needs to be done on the very point of patients. Finally, you heard the question that I put to the four previous witnesses.

Professor Sir Michael Rawlins: About orphan drugs.

Q93 Mr Amess: Why is the United Kingdom the only place in the world where the additional category of ultra orphan medicines has been proposed by your organisation?

Professor Sir Michael Rawlins: The history to this is that we were asked by the department three or four years ago now to look into how we would appraise orphan drugs in the generality. Orphan drugs in Europe are a relatively recent concept. The concept has been around in the United States for 20-odd years. When we looked at it, it was perfectly apparent that we had already appraised a fair number of orphan drugs as by the EU definition, or the FDA definition which is very similar. However, there was a particular category of very, very expensive drugs - we are talking £100,000 a year or more - where we had never been asked to look at it but, if we did, the costs, in terms of costs per QALY or costs for anything else, were going to be astronomical. Those drugs fell into a group that had been informally called ultra orphan drugs, so we defined the term slightly more specifically and we said to the department: "With ordinary orphan drugs there is not really a problem. With ultra orphan drugs, however, if you refer them there will be a problem because it would be a very, very high cost per health gain, QALY. We have to do one of two things: either we would have to say no to the lot or we would have to make special rules." We asked our Citizens Council, a group of 30 people drawn from everyday life, what they felt would be appropriate: "Should we make a special case for this group?" and they said yes, basically. There were caveats about it, very sensible ones. We posed to the department, "If you want us to do this, we will have to make special rules" and we outlined how the rules would work and so on and so forth. In the event, the department decided to go another route, but that is how it all happened and what happened.

Q94 Mr Amess: So you are disappointed.

Professor Sir Michael Rawlins: I am not disappointed because the other route will come to the same thing. Personally I was anxious that these drugs for these very rare diseases should be made available for patients and that is what has happened. That is the important thing. It does not matter whether they took my advice or not. That is irrelevant.

Q95 Dr Taylor: You have said your appraisal committees are made up of generalists and not specialists.

Professor Sir Michael Rawlins: No, I was saying that the guideline groups include specialists and generalists.

Q96 Dr Taylor: So the technology appraisal groups have experts to advise the Committee.

Professor Sir Michael Rawlins: Yes. The Committee members include general practitioners, hospital doctors - and no hospital doctor is a generalist any more, like some of us were, we thought, in the days gone by. We are all specialists.

Q97 Dr Taylor: But there will not be necessarily anybody on that committee who is an expert in the particular topic you are investigating.

Professor Sir Michael Rawlins: There may not be. In all circumstances they recruit to the committee for that day, usually through the Royal Colleges or professional societies, experts who will advise the committee on the issues relating to particular points.

Q98 Dr Taylor: That is what I wanted to know: how you select them. Because we have had a certain amount of criticism from some groups about the selection. Just to pick it out as an example, if we talk about the guideline you have just produced on venous thromboembolism and the prevention of it, it is really different in some key ways from the guidelines produced by the expert panel organised by the Chief Medical Officer. The criticism of that is that perhaps you might not have had the right experts.

Professor Sir Michael Rawlins: We think we did.

Mr Dillon: Also, of course, the Department of Health acknowledges the primacy of NICE guidance by casting the outputs of the Chief Medical Officer's group as interim recommendations. The intention was that they would be published very quickly to cover the period whilst NICE guidance was being developed. As it turned out, they were published the week before NICE guidance came out, but the Department of Health's position is clear that the NICE recommendations now are the national guidelines, so presumably they carry the confidence of the department and its Chief Medical Officer.

Q99 Dr Taylor: Even though they do not cover the same amount of ground as the expert panel?

Mr Dillon: To the extent that there is overlap, the recommendations that NICE has formulated are now national guidelines. There is now a joint Department of Health and NICE group which is pursuing the implementation of those NICE guidelines inside the NHS. The Chief Medical Officer's Group consisted of a group of clinicians. As Mike has indicated, NICE guideline development groups are more generic. They certainly include experts and they certainly engage with the expert community and indeed with other communities as well during consultation phases. We talked about this in 2002 when we had a similar conversation. Our position has always been that it is important that the groups themselves are competent to interpret the evidence but that has to be supplemented with genuine consultation with the clinical community and the other stakeholders who have an interest in it.

Q100 Dr Taylor: One of our first recommendations in 2002 was that you involved the Drug and Therapeutics Bulletin and the BNF more. How are you doing that?

Mr Dillon: We did exactly what you asked us to do. In our submission we have set out how we have responded to each of the recommendations that you made in 2002 and that is covered.

Q101 Dr Taylor: I was not quite clear. In your submission, was the response the initial response in 2002?

Professor Sir Michael Rawlins: No, this is the telling you what we have done as a result of your inquisition in 2002 - sorry, inquiry.

Mr Dillon: In the case of the Drugs and Therapeutics Bulletin, for example, we did what you asked us to do, which is to make sure they had the opportunity to make an input to the development of our guidance. Although they were initially enthusiastic about that, they have not found it possible to do so. We have a high volume of work in which they have an interest. Quite understandably, their primary responsibility is to produce their bulletin, so I understand that it is difficult for them to do so, but the opportunity is there just as you asked.

Q102 Dr Taylor: You have entered into formal arrangements with the editors of the BNF and the D&TB but they have not really taken that up.

Mr Dillon: There is no routine input from the D&TB. The opportunity for them to do so is there. The BNF carries NICE guidance in it, as you know.

Q103 Chairman: When you talk about recruiting experts, quite clearly quite a lot of experts in major clinical fields are very close to the pharmaceutical industry in terms of their cooperation. Indeed, that is how they get there, as it were. It is vitally important. What sort of guidelines do you have in terms of any interest that people may have outside the clinical interest of looking at a drug?

Professor Sir Michael Rawlins: For the staff of the institute and the members of our advisory bodies, all of them, we have a very clear statement of conflicts of interest. If they are clearly personal specific interests then they must not just declare them but not take part in the proceedings. When it comes to outside experts or organisations - and it might be organisations as well as experts - then we require them to tell us what their interests are and those are recorded.

Q104 Chairman: There has often been public criticism by clinicians about fellow clinicians not getting it right. I have always felt very uncomfortable about that. You would not stop you having somebody giving you expert advice; they would just have to declare the interest that they may work with a pharmaceutical company.

Professor Sir Michael Rawlins: And then you have to make your own mind up. We expect patient organisations to declare interests with pharmaceutical companies. To deprive them of the opportunity to make submissions would seem to me to be wrong because they had money from a pharmaceutical company, so we expect them to declare it.

Q105 Chairman: A declaration of interest would not stop people working for you. If you wanted the top person working in a particular field, you could get them, on the basis that they would just have to declare an interest while they are working with you.

Mr Dillon: It is important to make a distinction between an expert providing a view, a perspective, a piece of information and that being presented in front of the independent advisory body with the conflicts or potential conflicts that that individual might have and the business of making the decision, formulating the recommendation. That is done exclusively by people who do not have a conflict of interest and it is done by the independent advisory body. In circumstances where a member of an independent advisory body might have a conflict in relation to a particular topic, they do not take part in the business of formulating the recommendation.

Q106 Sandra Gidley: Would it not be the case, though, that nearly all of the experts on any particular panel, by the very nature of the way research is funded these days, would have inevitably received funding from a drug company? How often does it happen?

Mr Dillon: It is not inevitable.

Q107 Sandra Gidley: It is a high proportion.

Mr Dillon: It does not happen in every case. In many cases it is clear from the declarations that are made that various kinds of connections exist between individuals and the sponsors of the technologies we looked at.

Q108 Sandra Gidley: Often patient groups are funded by pharmaceutical companies as well.

Mr Dillon: Somme patient groups are funded by a pharmaceutical company. It is not necessarily specifically in relation to the topic that we might be considering but the connection exists and we would expect those who speak on behalf of those organisations to tell us when that is the case.

Q109 Dr Stoate: Professor Rawlins, clearly no health system in the world has ever been able to meet all the demand placed on it and therefore, inevitably, they make priorities. It is clear that any positive assessment by your committee is bound to cause pressure on other budgets within any cash-limited health system. That is obvious. How can you make sure that account is taken of the views of patients with other disease areas, who may have what they consider to be competing claims for the same pot of money but who are not part of your inquiry?

Professor Sir Michael Rawlins: It is very important. Of course they do not have a patient advocacy group because they are not patients at that stage. The health economists remind us all the time about this - the opportunity cost, as they say - and they are quite right. When I meet with patient organisations and when we have appeals, I often try to explain to patient organisations that we are trying to look after everybody who needs help from the NHS, not just those with that one condition. Of course, it is not easy to be that generous, in a sense. If you have macular degeneration or carcinoma of this or whatever it is, you want it for you and that is understandable. It is a very hard role to play in trying to explain that we have to be fair to everybody, particularly those without voices. It is not just particular diseases; it is also socio-economic groups and so on who do not necessarily have that sort of voice.

Q110 Dr Stoate: My view is that you do not do that as well as you might, if you do not mind me criticising you, because, inevitably, when a new treatment or drug comes out there is going to be huge pressure from industry, huge pressure from patients and specialists who want to get access to that technology. But I do not think there is enough weight put on the other side of the argument, which is that you have to rein back on other areas of investigation you might like to make but cannot if you are putting undue weight on one technology. How can you balance that up?

Professor Sir Michael Rawlins: We are conscious of this. The balance we have tried to use is to have the primary care trusts volunteer ... Do they volunteer any more or do we just name them?

Mr Dillon: They have never refused.

Professor Sir Michael Rawlins: We are trying to involve two primary care trusts in our appraisals to give that sort of point of view. On only one occasion has a primary care trust ever appealed against a decision on the grounds that it is not affordable. It has happened and it is in the public domain. It was over Herceptin. The particular volunteer primary care trust came along and said, "Look, this is unaffordable" and we had to balance it that way. I suppose that is the route we have used. It is a pity the primary care trusts do not use the opportunity more than they do. I do not really mean to criticise them because they have a lot of work to do.

Q111 Dr Stoate: The problem is that anything is affordable if you make enough cuts elsewhere. My worry is that I am not sure whether the balance is right because all we ever hear on the television and on the radio are more and more claims for more and more expensive drugs effectively for smaller and smaller groups of patients, which is inevitably the case, and no one is arguing that they should think any differently. My worry is that the public do not understand this. My other worry is that you are not making it explicit enough in your procedures to make sure that really is covered in the argument.

Professor Sir Michael Rawlins: You can have a try!

Mr Dillon: I spent 25 years of my working life, one way or another, in squaring the circle at an operational level in the NHS, so I know the problem. NICE guidance is only part of it. As far as I am aware, the only nationally determined resource driver that has ever been uniformly, without exception, implemented, are the national pay awards. Everything else, if you are a local operational manager, you have to look at in the context of everything else that everybody is expecting you to do. Going back to where you started, it is critically important for us that we select a range of topics, so that we are not just focusing on a particular disease or condition and then promoting whatever interventions might be new for that particular area. We need to get a balanced portfolio. That is why the change that was made last September to set up seven panels to cover the full range of clinical and public health practice in the United Kingdom was so important to us in making sure that we get a feed through so that we can do something for everybody.

Q112 Dr Stoate: Seven out of ten, but must try harder!

Mr Dillon: I will settle for seven out of ten, Chairman.

Q113 Mr Jackson: It is interesting that you say the UK when colleagues later will talk about the Scottish Medicines Consortium and the unique situation there. But let us cut to the chase and talk about rationing - which is a word, no doubt, you do not like to use. A number of primary care trusts use lower financial cut-off points when considering funding because those recommended by NICE are simply unaffordable. Does that not mean that NICE fails to eradicate the variation in access to treatment that it was specifically set up to address?

Mr Dillon: NICE was set up to give the NHS the tools to deal with postcode variation in service provision and the availability of technologies. We never do it because we do not have operational responsibility for delivering services. We do not do the prescribing. We rely on the NHS system and the tens of thousands, hundreds of thousands of health professionals, who need to act in unison to implement our guidance for it to have its full effect. That is what we do. To the extent that there is variation, where there is no reason for it occurring following the publication of a piece of guidance by NICE, it is disappointing for us. Over the last two years, we have done quite a lot - to the extent that we can as a small national body - to produce all sorts of support for NHS organisations and for individual health professionals to enable them to put the guidance into practice. We have done quite a lot of work on researching the barriers to implementation of NICE guidance and we know quite a lot about that, but the variation in the pace of implementation of the guidance exists, as you discussed earlier on this morning.

Q114 Mr Jackson: If we accept that postcode rationing is a bad thing, whose fault is it?

Mr Dillon: It is everybody's fault. It is everybody in this room; it is the entire National Health Service. To the extent that we could do better at what we do, we have a contribution and a responsibility as well.

Q115 Mr Jackson: Should NICE be given a top-up budget, so to speak, to fund any extra cost incurred by trusts and PCTs by following its guidelines?

Mr Dillon: No, we should not hold budget for services in the NHS. It is not the right way to do it. The right way to do this - and I speak as an operational manager in the past and now with the experience of NICE - is to delegate budgets out to the National Health Service and, where it is appropriate, to guide and direct the Health Service in the application of those resources and to allow local NHS bodies to get on with the rest of it.

Q116 Chairman: What do you say to the charge that because you do not look at the price of something in relation to the competing needs of the other parts of the National Health Service, in a sense you are therefore a bit unrealistic. That comment has been put to us. How do you answer that?

Mr Dillon: But we do. Because we use QALYs and we use them consistently, it allows us to understand the opportunity cost of deciding to do one thing, NICE recommending that we should use something. That allows us to understand the extent of the opportunity cost: What is it that we are not going to be able to spend on something else? It is so important that we have a tool. We believe QALYs are the best tool around at the moment to enable you to do that and it is important that that is applied consistently. We talked earlier about the range that NICE operates within, the discretion that we give to our advisory bodies to determine the cost-effectiveness. They have discretion but the exercise of that discretion is informed by written rules that we have set out for them and that is very important too because it enables everybody to understand why a committee might make one decision today about this intervention and why they might make a decision about another intervention that may on the face of it look inconsistent but is not once you look at the rules that the committee has applied and the way they have argued their recommendation in each case.

Q117 Charlotte Atkins: The OFT said that NICE working with other agencies should be much more closely involved in setting drug prices, based partly on the drug reflecting the clinical value, the costs being reflected in that. What is your view? Do you think that is a good idea?

Professor Sir Michael Rawlins: I think the OFT report made suggestions about how NICE could be involved, in the sense that we would estimate the value in terms of an incremental cost-effectiveness, and if we did not think that represented good value then it could go on to the pricing negotiation. I think it is part and parcel of a wider picture but, purely from the point of view of NICE, of course it is possible to be done if that is what the Government want. I would add two caveats to that. One is that we would not wish in any way to change our standards or robustness or anything like that, and, secondly, I do not think it is possible to suddenly do it. It is not just the amount of money we have to set up the committees and the staff and everything, but there just are not enough health economists around or that sort of expertise around in the country. We would be talking about perhaps 100, 150 single technology appraisals a year. It would be a massive workload if we were going to do it properly and fairly and we would need to be doing it properly and fairly. I do not think we could do just do it like that.

Q118 Charlotte Atkins: Is it not the reality that most drug prices, like Herceptin, for instance, are set more by the American market and what happens there than what happens in the UK?

Professor Sir Michael Rawlins: Many people in the pharmaceutical industry privately admit they set it by what the market will bear. The American market, because the Americans have much more to spend on healthcare than we do, will bear more than we can.

Q119 Charlotte Atkins: Of course, it is an incredibly costly, market-driven type of healthcare which encourages drug prices to be high.

Professor Sir Michael Rawlins: It is interesting the Americans are thinking of having a NICE.

Q120 Charlotte Atkins: I do not understand why, given that the National Health Service is such a huge organisation, it does not have more clout in the drugs market to negotiate a price which reflects clinical value. If you take something like Herceptin, clearly PCTs are going to find it extremely difficult if they find they have half a dozen patients who potentially might benefit from Herceptin to be able to prescribe that in one financial year because it will completely devastate their budgets.

Professor Sir Michael Rawlins: We do not have the purchasing power that you might think. We are only 3% of the world market. As the OFT report demonstrates, the prices of products in Britain are a major governor of prices elsewhere. The truth of the matter is that some companies would rather lose the entire sales in the UK because it is only 3% in order to sustain higher prices elsewhere in the world.

Q121 Charlotte Atkins: Do you think, therefore, the NHS is very much at the mercy of the world price market?

Professor Sir Michael Rawlins: I think the world is changing. I think the pharmaceutical industry broadly accept that the way it has been done in the past is not going to work for the future, the idea that they could just set the price at what the market will bear. There is a general acceptance amongst the pharmaceutical industry and most wise chief executives, now that most countries are setting up something like NICE, that it cannot carry on as it was. As the chief executive of one very large company said to me, "We have to learn to live with organisations like yours."

Q122 Charlotte Atkins: But do you think the Government and the NHS should be doing more to try to influence these drug prices? Clearly we are going to have a huge number of new drugs coming on the market which patients understandably will want to have but there are costs which seem to bear very little relation to their clinical value.

Professor Sir Michael Rawlins: This is not NICE territory we are about to go into. We are moving away from NICE, but the Government, not unreasonably, wants three things. It wants to have innovative new drugs that will be good for patients; it wants to sustain a pharmaceutical industry which employs 70,000 people; and it wants drugs at the cheapest possible price. That is the cake that we want to eat. We all want that cake. How you do that is beyond my pay scale, to be honest. I think it is very tricky equation to rate. If the Government and Parliament is asked to help in some way, we are more than willing to help and we are more than willing to do what is within our powers to do, but please do not expect us to do anything too quickly because it is just not going to be possible suddenly to rush into 150 appraisals for you.

Q123 Charlotte Atkins: Is it beyond the Prime Minister's pay scale?

Professor Sir Michael Rawlins: Ah! Perhaps he gets paid for that.

Q124 Jim Dowd: I realise from what you say, Professor, that this is not directly within your remit, but you are clearly very experienced and that is why we have you here to look at it. Of course the pharmaceutical industry, as you mention, is a very important industry in the UK. It is one of our most valuable export areas, as well as important for the benefits it produces for our own citizens. When we did our inquiry into the pharmaceutical industry, most of the pharmaceutical companies - and I am generalising - were effectively saying that, because of the huge R&D costs they have, they are very sensitive about patents, for example, and also for the price they set. But from what you are saying now there really is no direct correlation it is really more a case of what they can get away with.

Professor Sir Michael Rawlins: I think, historically, that was the case but I think many companies now are realising it is not going to work. Of course we are talking about a globalisation. There are middle income countries, India, China and so on, who will be wanting much greater access than they have had in the past. That is another driver to the industry reworking out the way in which they price drugs. It is part of a global movement, I think.

Q125 Dr Naysmith: To use your own word, Sir Michael, when you were last here to be "interrogated" we took up quite a lot of time on transparency of your organisation. I think we even rudely compared you with the Food Standards Agency and said they were better because they had everything on the internet and anyone could access it. It is obviously true that things are much, much better now as far as NICE is concerned. It is a much more transparent organisation but there are still two or three areas where you are not transparent. They have already been mentioned but I want to bring them up fully for the record. The first one is you insisting that the modelling of clinical and cost-effectiveness by contracted academic centres should remain confidential. I know there is a court case that influences on that and you will not want to say too much but can you say in general terms why it is that you think you should make that case?

Professor Sir Michael Rawlins: It is legally very difficult for us to engage in that. Our legal advice is not to discuss this with you and I hope you do not mind.

Q126 Dr Naysmith: We will leave it to the court.

Mr Dillon: We could say that, whether it is part of the economic assessment that we are doing or part of our understanding and evaluation of the clinical studies that are used or the studies of the effectiveness of public health interventions, we make available to our stakeholders what the advisory committee sees. That is the important thing, because the advisory committee is making its decision on the basis of what is in front of it. It is really important that those who have an interest in what we do and a desire to comment see the same numbers and see the same text, and they do. It is difficult for us to go into the specific issues around economic modelling because they are subject to that judicial review, but, as a general principle, we make sure that our stakeholders see what the appraisal committee or the guidelines development group sees and therefore the evidence base on which they form their recommendations.

Q127 Dr Naysmith: We will leave it at that for the moment. The QALY started off as being a fixed, you know, £30,000. People denied that there was such a thing and then it began to emerge that it was round about £30,000. This morning we have heard that it can range from £20,000 to £30,000 and then above £30,000 other factors come into play. All of that is not very transparent. Can it be made any more transparent?

Professor Sir Michael Rawlins: There are two ways, in theory. One is that you could start weighting QALYs. There have been suggestions that you could add in factors and multiply your QALY by two or divide it by three or square root it or whatever you like, taking into account, sometimes, social preferences but also other things. It is not at an advanced stage at all and our advice has been so far that we should resist that. However, in the future, that sort of thing may well emerge and that will make it more transparent, although what you weight for and how much weighting you give are not easy to determine.

Q128 Dr Naysmith: Would it be a good thing or a bad thing if it was transparent?

Professor Sir Michael Rawlins: If it could be done, because I quite like mathematics I could quite enjoy that approach, but we would need to be very sure that we were weighting the right things in the right way. The second thing is that up until now - and it is perhaps something that I might regret - our committees have met in private and from about the autumn they will meet in public so that people can hear the reasoning behind the judgments that are being made. However well you write it out afterwards - it is a bit like, I guess, reading Hansard rather than listening to the debate - you never quite get the flavour of it if you did not have the opportunity to hear it. But it is quite a complicated thing to engineer, so it is taking a bit of time for it to work through.

Q129 Dr Naysmith: The final matter concerns this question of register of interests for professional groups. We have already touched on that but why have you not established a register of interests for everyone who is connected with the process at all? It is a recommendation of the Academy of Medical Science, for instance.

Mr Dillon: I do not think we could hold a register of interests of everybody who might ever engage with NICE or every organisation because we would not know what they were. However we publish the interests as they most specifically relate to the piece of work we are doing.

Q130 Dr Naysmith: You said earlier on that they self-state what their interests are

Mr Dillon: Yes. There is no other way of doing it. We ask them to declare their interests and they record them and they are made available to the general public.

Professor Sir Michael Rawlins: For the board, for example, there is a register of interest which is published on the website.

Q131 Dr Naysmith: Effectively, that is what you have.

Professor Sir Michael Rawlins: Yes.

Q132 Sandra Gidley: I would like to move on to implementation, which was obviously covered to a certain extent in the earlier session. It is still patchy, still somewhat slow in some cases. What can NICE do to improve compliance with the recommendations?

Mr Dillon: As we were saying earlier on, we cannot do the guidance. We cannot implement it because that is not our job. We can think through what has to be done to apply the guidance in practice and we can identify the sorts of work that we can undertake at a national level on behalf of the NHS as a whole that will be useful to those who have the job of putting it into practice locally. We talked earlier about the cost impact statements that we do and the tools that we make available to local NHS communities to work out the headline cost impact. That is a really important first step in putting any piece of advice that we produce into practice. You need to understand what the impact is. Locally, it is very easy to do that. You just plug in your local data and you have it there. We produce lots of educational materials of the kind that would be familiar to anybody who has been in the business of promoting change in professional practice for every piece of guidance that we produce. We now produce commissioning guides. These are, again, web-based tools that allow you, for example, to take a look at use of upper GI endoscope, which would be important in detecting stomach cancer or dyspepsia, and we can identify by GP practice for a local community what referral rates for upper GI endoscope are. The good thing about it is that you can then compare where you are with where you ought to be if you were applying the guidance that we have produced on stomach cancer or on dyspepsia. Maybe you are doing too much and maybe you want to look at that. Maybe there is a good reason for that. Perhaps you are not doing enough. Maybe there is a reason that relates to your local population for that too. We are going beyond this, because we decided to talk to those who designed the curricula for undergraduates, medical and other health professional education, because we believe it is important that those who are in the early stages of the training understand the benefits and the limitations of evidence-based guidance; not that they learn by rote the guidance that NICE has produced but that they are in a position, when they come out and start practising, to look at it as part of the support that is available to them in making the right decision for individual patients. They can add it to their accumulating professional knowledge. We have a team of what we are calling implementation consultants working on a regional basis in the NHS. Again, they are not in the business of putting the guidance into practice but they are seeding good practice. There are some superb examples in the NHS of really slick management arrangements for implementing different forms of NICE guidance. Take a look at Birmingham City Hospital, where I was recently, and their approach to introducing technology appraisals, for example. We are seeding that good practice through those implementation consultants around the NHS. £2.5 million of my £30 million budget is about as much as I can devote to that sort of activity without compromising the production of guidance itself. There is more that we could do if we had the resources, but, in the end, the business of changing professional behaviour, of deciding to make the budget available, of giving the managerial and clinical leadership the signal to the organisation that we are going to do this because it is the right thing to do, is outside our brief. That has to be done by local NHS organisations and now, increasingly, the wider public health community.

Q133 Sandra Gidley: When you produce a technology appraisal, is it clear to each PCT how much they will be spending if they implement the guidance fully?

Mr Dillon: Yes.

Professor Sir Michael Rawlins: That is exactly what happens. There is a costing template on our web.

Q134 Sandra Gidley: I am not sure if you can answer this: does the Health Commission look to see if that level has been achieved or whether any level has been achieved?

Mr Dillon: No, I do not think they do that. They ask us - and it was being discussed earlier - whether the PCT has compliant or to what extent it is compliant in its own judgment with NICE guidance but they do not ask: "Are you spending 100% of the calculation that you could do using NICE's resource impact template?"

Q135 Sandra Gidley: So the PCT could say - I know, because it has happened locally - "We are complying with guidance because we have a budget for it" even though there is a waiting list for a particular NICE-approved treatment. Would that tick the box?

Mr Dillon: I think you would have to be careful about how you answered the question. What does "compliance with the guidance" actually mean? For me, it would mean that those patients who are, as it were, eligible for access to care in accordance with the recommendations are getting access to care. For me, if you answer yes, that is what you mean. It does not mean that half of them are. It does not mean that we have made a start. That is a different question. It may be that is the honest answer in circumstances where resources are tight and there are lots of things to do but my interpretation of compliance is that the guidance is in force and in place and can be used to benefit those patients who it is intended to benefit.

Q136 Sandra Gidley: You just mentioned resources. Could compliance be poor because you have been approving treatments that the NHS just cannot afford? Or is that not your problem?

Mr Dillon: Mostly, when people ask that question, they talk about it in the context of expensive drug treatments that are being introduced, although it also, as we have discussed, applied to clinical guidelines. The reality is that, with or without NICE, healthcare industries will carry on challenging this healthcare system and everybody else around the world with things which, in some cases, are extraordinarily valuable and to which we will want to get access. We do not escape from the problem, but with NICE - and here again I have to answer this question with the respect of a former hospital trust chief executive with all the experience of how decisions used to be taken in the absence of evidence - we are in a far better place to make the right judgments about how to apply resources, however limited they might be at a local level, with the benefit of the kind of evaluation that we do, than not having that evaluation and struggling to make decisions with inadequate information.

Q137 Mr Campbell: What is the quality of industry's evidence submitted to NICE? Is it improving in quality and transparency? What, in particular, are its deficiencies and strengths?

Professor Sir Michael Rawlins: I think the difficulty for industry that the regulatory authorities ask a somewhat different question from the question we are asking. The regulatory authorities are looking at quality, safety and efficacy, and they are looking at efficacy in absolute terms, usually against CBEC, which is what the regulatory authorities usually want. With us, we are wanting to see how effective it is compared to current standard or best practice. Those sorts of data may not have been acquired. The second thing is that the definition of efficacy for a regulator can often be what is known as a "surrogate endpoint". It may not be that you are living longer but it may be that your tumour has got a bit smaller, which may or may not mean you are going to live longer. That is an endpoint that the regulatory authorities will accept. With very new drugs, we are often having to use the evidence that was designed for one purpose for our purposes. This can be quite difficult, the comparator that you choose against, so we are having a dialogue both with the industry and with the regulatory authorities about the sorts of criteria that might be more helpful to both sides. In fact, one of the interesting things is that both the Food and Drug Administration in the United States and the European regulatory authority are now encouraging companies to undertake quality-of-life studies as part of their regulatory position and that will help enormously in relationship to the sorts of things we do. But the comparator is a very difficult problem because different countries have different base standards of care and you cannot expect a pharmaceutical company to do the whole of their trial in the United Kingdom, however much we might like them to do so just for us, because the French and the Germans and the Americans might have a different standard of comparison. So it is quite tricky and it is not an easy one to resolve.

Q138 Mr Campbell: You have been accused of having an adversarial approach to the pharmaceutical industry. Would you agree with that statement?

Professor Sir Michael Rawlins: The industry and regulators are in an adversarial role in some senses. In some senses, that is inevitable. But the industry does genuinely want to work with us; they do genuinely want to try to produce the sorts of data that we need and are very receptive to a dialogue and interchange of information. Quite clearly, when we say no to their products they are not entirely happy about it but we actually very rarely say no.

Q139 Dr Stoate: The South Asian Health Foundation sent a very useful submission into us and I would like to read this out: "With drug development costs of approximately £800 million and the cost of challenging NICE's decision within an appeal being comparatively small, it is inevitable that a reasonable and appropriate strategy for the pharmaceutical industry is to challenge unfavourable decisions from NICE." How would you respond to the challenge that the appeal system is being used to further self-interest rather than the public good?

Professor Sir Michael Rawlins: I think sometimes it is, yes, because sometimes we have what the industry have themselves have described as "gaming appeals" where we have done a class appraisal of several different drugs in the same class and where one manufacturer is appealing the fact that we have not picked his out as the best. Then we have to hear the appeal. They have made an appeal and our rules are that we listen to the appeal. In those sorts of appeals, we have always rejected them.

Q140 Dr Stoate: The fact is you have a £30 million budget and you need to make sure that money is used for the public good, and you are up against drug companies who see that furthering their own interests is rather more important, in some cases, than the public good. That is something, surely, that you must be aware of and concerned about.

Professor Sir Michael Rawlins: We are aware of it, but of course the appeal, in a sense, is also a lightening rod for companies, patient organisations and professional organisations to express where they think the process has gone wrong. In about half the cases, we agree with them and ensure that amends are made.

Q141 Dr Stoate: Nobody minds a reasonable appeal if it clarifies the situation. But if it is purely: "We are going to appeal because the drug is expensive and what have we got to lose?" then that cannot be good.

Professor Sir Michael Rawlins: No. A company has a perfect right to say, "You think it is more expensive than it is but you have got it wrong." Sometimes we do have it wrong, even when it is the company saying it, so it is important they have that right to do it.

Q142 Dr Stoate: What about them paying for the cost of the appeal? At the moment, they can use the appeal system for very little. Why do you not put a service charge on the appeal? At least that would stop frivolous appeals because there would be a financial cost.

Professor Sir Michael Rawlins: I am not sure, because a company could easily pay £1 million or £2 million or £5 million for a tiny turnover of £20 million. You would have to be a serious inhibitor ----

Q143 Dr Stoate: I am thinking more of not wasting public funds. Why should the public pay for a frivolous appeal? That is the bottom line.

Mr Dillon: Also, of course, it is not just the companies that have the right of appeal, it is patient organisations, and they are not in anywhere near the same position as a pharmaceutical company to afford it. We could not have a rule for a pharmaceutical company and a rule for a small national, patient advocacy group.

Q144 Dr Stoate: Is the same weight given to appeals that are not drug companies? If, for example, the commissioner has decided to appeal or a PCT has decided to appeal, are they given equal access to the system? Are they given a level playing field on their side as the drug companies are on the other side?

Professor Sir Michael Rawlins: Absolutely. They all have a level playing field. And the appeal is held simultaneously.

Q145 Dr Stoate: You are not in favour of charging for appeals, then, and you think the system is not being abused unduly.

Professor Sir Michael Rawlins: No. To be fair, the gaming ones have become much less in the last two or three years. I think companies have realised that we are not up for that.

Q146 Mr Amess: Following on from my friend's question, the current grounds for appeal against your organisation's decisions do not allow for an appellant to introduce new evidence. That seems a very tough state of affairs. Surely some of the evidence or information could be old. It seems unreasonable.

Professor Sir Michael Rawlins: Our whole appeal system is built on the same principles of British law and appellate courts do not re-try a case and hear new evidence. If there is new evidence then it goes back to the primary court and is heard before a jury again. It is exactly the same with our appeals. There are two things about our appeals which some people are confused about, I am sure you are not but in the way of the things of the world. First of all, it is not an appeal against NICE, it is against our Appraisal Committee. It is not guidance which we have said, "This ought to be guidance", the appeal is against the Appraisal Committee's final appraisal and determination. It is not NICE guidance at that stage. The second thing, as I said, it precisely parallels how the courts operate and the British system of justice, that we look to ensure the process is being fair, that the decision has not been so perverse that no reasonable committee should ever have come to it and that the Institute would not be exceeding its legal powers if it was to adopt the Committee's guidance as NICE guidance.

Q147 Mr Amess: I understand all the points you are making, but the Government has set up this new Department for Justice, they are looking at the role of the judiciary, all this is fluid, and I cannot quite see why a health organisation has to follow what is done in a British court of law.

Professor Sir Michael Rawlins: If we were to reconsider further the evidence or either rehear the evidence or introduce new evidence, we would have to have an appeal panel almost the same as the Appraisal Committee. It would then have to rehear and retry the case, and the board would then have to make its mind up whether the original committee or the one it had got to hear the appeal was better than the other and it would be impossible to tell. The board would then have to rule between the two committees. I think it would become an impractical way of working. Rather than have another committee hearing any new evidence which comes, we would send it back to the Appraisal Committee, "Take this into account and tell us now what you think".

Q148 Mr Amess: I do not want to have a torturous conversation, but you are suggesting that it is exactly like the British judicial system, but if you look at the process of appeal you can introduce new evidence ultimately.

Professor Sir Michael Rawlins: It is very rare. There usually is a reason either for dismissing it, letting the guy go free because it was an unsecure prosecution five years ago, but we are not in that sort of territory.

Q149 Mr Amess: If you are content with your present arrangement.

Mr Dillon: Another material point, Michael, is the elapsed time between the last opportunity which somebody would have to submit new evidence and the appeal is very short. In terms of the sort of evidence we use, the outcomes of clinical studies or economic assessments, do not get generated in the whole ---

Q150 Mr Amess: Fair enough, so what sort of timescale would we be talking about?

Mr Dillon: It is measured in weeks. In a sense the issue does not really arise.

Q151 Dr Taylor: I want to go on to some of the differences between the Scottish system and your system, but going on appeals first as we have just got to that. I gather from your very full information about the Scottish system that they do not have a formal appeal process - this is the Scottish Medicines Consortium - but they do have a mechanism for reviewing its decisions when these are challenged. Is this not really what people want here? The reason for appeals, I would have thought, is because people disagree with the decision, and the fact that you can only look at the process is not really what people want, they are arguing about the decisions. How does the Scottish system have a system for reviewing a decision like that which seems to be a major difference from you?

Professor Sir Michael Rawlins: My understanding is - Andrew may have more knowledge about this - at the review it goes back to the Committee in some circumstances, that is what happens.

Q152 Dr Taylor: If it is challenged in Scotland it goes straight back to the same Technology Appraisal Committee?

Professor Sir Michael Rawlins: Or whatever it is called, yes.

Q153 Dr Taylor: Would that not be possible here?

Professor Sir Michael Rawlins: In a sense, that is exactly what happens. What happens with us is we produce a draft decision, an ACD, an appraisal consultation document, which then goes out for consultation, which people may comment on, and they do comment on, and which may change the guidance and then it comes back again. The Scots do not have this sort of system of consultation. We consult and people can all have the opportunity to come back, which, in a sense, is the review step in the SMC system.

Mr Dillon: What we have got is an add-on to the SMC's process. It is further protection for our stakeholders that the advice we are about to give to the NHS is the right advice.

Q154 Dr Taylor: Does your publicity mean that everybody understands that, they have got to get in early before the final decision is made?

Professor Sir Michael Rawlins: Yes.

Q155 Dr Naysmith: Just to elaborate, how often has it been reversed as a result of consultation?

Professor Sir Michael Rawlins: I think changes are probably made almost every time, are they not, some change or other to them?

Mr Dillon: Absolute 180 degree turns do occur in circumstances where the Committee has shaded its advice in consultation to restriction. It is certainly the case that Committees can be persuaded that is not the right approach and to turn that around to a more positive ---

Q156 Dr Naysmith: Would that be a regular thing that is happening?

Mr Dillon: Regular would be the wrong frequency to apply.

Professor Sir Michael Rawlins: We can find out and let you know.

Q157 Dr Naysmith: It would be useful to know. It would be a useful point.

Mr Dillon: It is difficult to be precise because there are gradations of changes.

Q158 Dr Naysmith: That would be useful information.

Mr Dillon: It does occur.

Q159 Dr Taylor: To follow that up, I do not see how, if you refer it back to the same Technology Appraisal Committee or the draft goes back with the same experts, you are going to see a change necessarily?

Mr Dillon: But you do.

Q160 Dr Taylor: Moving on, more differences. I must say, superficially, I like the idea that the guidelines work and the technology appraisal work are separate, as in Scotland, because then you do not have the confusion, which we have, that appraisals are mandatory and guidelines are not. Had you ever thought that you possibly are attempting too much for the resources you have to be doing technology appraisals and guidelines? Would it not be more reasonable for you to concentrate on the appraisals with the mandatory message and to hive off the guidelines, which ought to have been done years ago, to organisations, for example like the Royal Colleges?

Mr Dillon: In practice in Scotland, of course, there is a similar distinction between the status of the Scottish Medicines Consortium's advice on drugs, other than where they are superseded by NICE guidance which occurs in Scotland, and the work of the Scottish Intercollegiate Guidelines Network. In Scotland, NICE technology appraisal guidance or Scottish Medicines Consortium equivalent guidance on drugs goes into us and there is an expectation that Scottish health organisations will put it into practice. With SIGN, the Scottish Intercollegiate Guidelines Network, there is no expectation formally in the same way inside Scotland that that guidance will be used. As far as I am aware, it does not even have the same status, as NICE clinical guidelines, do as formal national standards.

Q161 Dr Taylor: There you have hit on it because what status do NICE clinical guidelines have because, as far as I can see, they do not have any status other than advisory recommendations?

Professor Sir Michael Rawlins: They have developmental standards in the standards for the NHS.

Q162 Dr Taylor: If we take a particular example, a PCT locally is one of the very few that will not act on your guideline on bi-ventricular pacemakers, so are they going to be penalised in some way for that? Guidelines are not mandatory so they cannot be penalised.

Mr Dillon: The minimum expectation of any NHS PCT or NHS community, because it is not just about a PCT, it is not just about a provider, is that for a clinical guideline they say, "This is NICE guidance and so we are up for it". It may be a very big challenge for us, let us assume it is for an individual PCT. What I would expect as a local resident is that I could go to my PCT or my local provider and there would be an agreed statement that they are up for it, they are going to put this guidance into practice, but because it is a big challenge it is not going to be today and it will not be tomorrow, but "here is the timescale over which we are going to do it and here is how we are going to measure our production towards it". That does not cost you anything but it is a fundamentally important step to take in the journey from where you are to concordance with our recommendations. If that does not exist, then a citizen using the NHS has every right to complain formally. What I think we have to accept is that because different parts of the NHS start from different positions in respect of any particular NICE clinical guideline, there will be variations in the speed at which they are able to progress towards it. They cannot just drop everything else and do this latest clinical guideline which NICE has come up with, they have to stage that to take account of all the other things they want to do.

Q163 Jim Dowd: There is a difficulty, a paradox, at the heart here. The public perception of NICE guidelines, judgments, whether it is the technology appraisal or not, is that once they read that NICE says a particular therapy or a particular treatment is efficacious, is value for money, they have an expectation, regardless of how it is rationed, that they are going to get it if they have the condition, but that is not the case with the guidance, is it?

Professor Sir Michael Rawlins: The guideline, which is how to manage a condition, is often a much broader piece of guidance and it may take time to implement. For example, we did a guideline on head injuries which involves the expectation that hospitals will have much ready access to CT scanning facilities. That is not just a matter of paying the money for the scanner, you have also got to have the resources for staff to be able to work it 24 hours a day and so on and so forth, so it is not something you can implement in three months. Some hospitals may have already got it there and can do it straightaway, some may take six months or a year or 18 months to be able to implement it fully, so it recognises that. Unquestionably the standards for health do expect PCTs and hospitals to adopt this at a reasonable timescale, you might argue about how long is reasonable, and the Healthcare Commission in the current year will be looking at the uptake of NICE guidelines in the same way as it looked last year for the first time at the uptake of NICE technologies, drugs.

Q164 Dr Taylor: Andrew, what you were saying was it would be at least acceptable if it was delayed for everybody within a particular PCT area?

Mr Dillon: I was suggesting that individual PCTs are in a unique position compared with any other PCT in relation to what they have to do, the money they have to put in, the people they have to hire, the facilities they have to put in place, in order to achieve broad concordance with our recommendations. In Barnstable they may be very close to being able to implement a clinical guideline from NICE for historical reasons, perhaps they have had a real local clinical champion, perhaps for some reason it has been a local priority in the past. In Barnsley it may not be the case, they may have focused on something else, so they will have a longer journey to take in order to achieve broad concordance. We have to accept the reality of that. We cannot assume everybody starts from the same position, everybody can leap to the same position in the same space of time, but it is not satisfactory to say, "We are not doing it" or "We are not even starting", and it is not satisfactory to say, "We have absolutely no idea when we are going to get there". To me, as a citizen, as a user of the NHS, it is not good enough. I want to know, even though I would be prepared to accept that perhaps it is not possible to do it tomorrow.

Q165 Dr Taylor: In reality we are a long way away from eliminating postcode prescribing?

Mr Dillon: In the case of absolute uniformity in the provision of any aspects of healthcare, those variations exist and you can measure them in the form of a postcode, you can look at them in terms of the different progression rates for individual diseases and conditions at a national level, but we cannot leap to uniform service provision in a single day, the system is too complex and bits of it start from different positions. We will just have to accept the fact that that pace of improvement is going to vary for big aspects of practice, like the whole of diabetes or the whole of schizophrenia. As you were discussing with the Department of Health earlier on, it is different in relation to individual treatments where the decision-making process is less complex and there is a clear expectation on the part of the Department of Health that within normally three months resources will be made available for the intervention to be used.

Professor Sir Michael Rawlins: Eradicating inappropriate variation, which is what we are talking about, is a challenge for ever healthcare system and countries who did not think they had got the problem had not looked. Germany thought it had a uniform system until they started looking; the United States say they have got just as much variation as we have, despite being able to spend twice as much money, which is curious.

Q166 Dr Taylor: Going back to the question of separating guidelines and appraisals and hiving off guidelines to somebody else, if you just had appraisals, surely that would mean you could do a much wider range of things with your five channels that you have going, that you could work quicker and produce the results we need more quickly?

Professor Sir Michael Rawlins: I would regret it because appraisals are technologies in just one particular area of care. In actual fact, in a sense we already have hived off the guidelines to the Royal Colleges because it is our national collaborating sectors which are based on the Royal Colleges that produce the guidelines. If you hived off our guidelines and took the guideline money away and gave it to the Royal Colleges, you would end up with the same sort of system, unless you could let us keep the guideline money in which case ---

Mr Dillon: --- it would not be as good.

Q167 Dr Taylor: You have already hived off but you pay other people out of your money to do it?

Professor Sir Michael Rawlins: Exactly.

Q168 Dr Taylor: Which I did not realise.

Professor Sir Michael Rawlins: They do it to our order, as it were.

Q169 Jim Dowd: The postcode lottery is thrown out from time to time as if it is an artificial evil which has just been inflicted upon people. Do you feel that you are enhancing or undermining local commissioning decisions in the work you do? If you are looking for a national standard, where does that leave scope for local commissioning priorities?

Professor Sir Michael Rawlins: I think local commissioning priorities are one thing but local commissioning standards are another. All our interactions - and Andrew can speak more because he has a lot of interaction with chief executives of PCTs - are that they warmly welcome NICE guidance as a standard to which they should aspire. Andrew, you have had many more of these conversations than I.

Mr Dillon: I spend a lot of time talking to people in the NHS, those who provide services and those who commission them, and I rarely come across anybody who says, "I wish you were not here". Quite often people will say, "What you do presents me with a challenge but I would rather have the challenge than not".

Q170 Dr Naysmith: One point about the Scottish system versus ours which we need to ask is the point that people often say they can do it quicker and better because they get more money per head of population than we do in England, is there any truth in (a) that they do it quicker and better and (b) it is because of more money?

Professor Sir Michael Rawlins: The reason why they can do it quicker is, firstly, they look at all new drugs, so there is no waiting for a minister to refer them to it, it is just everything which comes along. They do not do devices or procedures or diagnostic agents. Secondly, they do not have these rounds of consultation which we regard as a very, very important quality control safeguard mechanism in our processes, where we would be very, very reluctant to stop doing that, it is a very important part of our process. Thirdly, I think we do look more critically at the evidence which is being presented than the SMC do.

Q171 Dr Naysmith: If they are doing a quicker and less thorough approach, they ought to be making the odd mistake or two which you do not make.

Professor Sir Michael Rawlins: How could I possibly comment on that, Dr Naysmith.

Q172 Dr Naysmith: Are there any examples of that happening which you can give us as pure fact and not commenting?

Mr Dillon: I think if our colleagues from the SMC were here they would acknowledge the fact that the extent to which they subject the evidence base, which in Scotland is exclusively provided by the pharmaceutical industry, to scrutiny, to evaluation, is not done to the same extent as it is south of the border, and individually we all have to make a judgment about how important that is. We think it is really important. The WHO says, "It doesn't get any better than ...".

Q173 Dr Naysmith: If it is really important, you should be able to point to something and say it.

Professor Sir Michael Rawlins: There is an example - and I do not think I will go into the product - where a manufacturer put in an estimate of cost-effectiveness, which the Scots thought was too high and so they rejected it. In actual fact, the manufacturer made an error which when it came to us we spotted and realised that the incremental cost-effectiveness was substantially lower than the Scots had been led to believe, so we said yes, at which point the Scots said yes too.

Q174 Dr Naysmith: That is what I wanted.

Mr Dillon: It is not so much that they might make mistakes but they do not advise to the same degree of detail that NICE does. For example, in relation to the use of an intervention for a subgroup as opposed to a whole population, they do not go into that degree of detail, so they restrict themselves to what they can do competently and properly with the resources they have available. There is not a comparison of mistake by mistake, what we should compare is the nature and extent of the recommendations they produce with what is produced from NICE.

Chairman: Could I thank you both very much indeed for joining us this morning/afternoon and hopefully we will have the report out, we think, this year. Thank you.