Select Committee on Health First Report


Healthcare systems throughout the world have suffered from a lack of clear, authoritative advice about clinical and cost-effectiveness. They have been confronted by multiple, often conflicting, guidelines on the use of medical technologies and variations in patients' access to care depending on where they live. NICE was established in 1999 to address these problems in England.

In the eight years since it was established, in response to internal and external review, NICE has shown itself ready to change. Initially, it appraised technologies (mainly medicines) and produced clinical guidelines. Its remit was soon expanded to cover interventional procedures. Subsequently, technology appraisals were made mandatory and the single technology appraisal was established to speed up the evaluation process. Since 2004, it has also examined public health issues.

The environment in which NICE operates has continued to change. Sir David Cooksey's report on the single health research budget reiterated this Committee's recommendation in its 2002 report that technology appraisals of drugs should be carried out more quickly, and nearer to the time of launch. There has also been increasing criticism of NICE's decisions, mainly from patients, patient organisations and pharmaceutical companies. Eisai and the Alzheimer's Society obtained the right to a judicial review of a NICE decision. There has also been pressure from Ministers to make some drugs more readily available.

During the inquiry, we received much evidence that NICE is carrying out many of its functions effectively. Reviews have shown its evaluation processes to be generally robust. However, NICE also has its critics. Patient and professional groups as well as the pharmaceutical industry have highlighted the failings of NICE, such as the slow release of guidance and perceived unfairness in NICE's recommendations. The decisions of NICE are often appealed, and these appeals are widely reported. We examined three main areas of concern: the evaluation process, the affordability of guidance and its implementation. In addition, following the Office of Fair Trading's (OFT's) report on the Pharmaceutical Price Regulation Scheme (PPRS), we decided to look at the potential role of NICE in such a new system.

We identified several problems with the evaluation process, including:

  • Topic selection. Only a few selected medical technologies are chosen as suitable for assessment as technology appraisals. There is also far too little emphasis on disinvestment. Here we found NICE's responses to our questions disingenuous. While few older treatments may do no good at all, many will not be cost-effective;
  • The wider benefits of treatment to society, for example to carers, are not included in NICE's economic evaluations;
  • NICE often does not have all the information it needs to make a full assessment. It does not have access to all the information the Medicines and Healthcare products Regulatory Agency (MHRA) uses and clinical trials are usually designed without NICE's work on cost-effectiveness in mind;
  • Experts are not sufficiently well used; and
  • Publication of guidance is slow; licensed medicines are often not prescribed while PCTs and clinicians wait for NICE to make a decision.

We make a number of recommendations to address these problems. Key among them is the need for a system whereby all medicines are assessed at launch. A shorter, less in-depth evaluation should be made between the time of licensing authorisation and marketing, so that clinicians can prescribe useful and cost-effective drugs as soon as they are launched. A lower cost-per-quality adjusted life year (QALY) threshold should be employed during this early assessment to ensure that only the products that are most cost- and clinically effective are available straightaway. Subsequently there should be a full appraisal; the threshold could then be increased if warranted.

In order to ensure that NICE has the information it needs, NICE should have access to the same material used by the licensing body, clinical trials should be registered and there should be closer working between NICE and the pharmaceutical industry. This will be particularly important for the effective assessment of drugs in time for launch.

We recommend that more be done to encourage disinvestment. No evaluation of older, possibly cost ineffective therapies has taken place to date; two are currently underway. Our predecessor committee made the same recommendation; it is not acceptable that NICE continues to ignore this recommendation.

Our last report on NICE also recommended that the legislation be changed to accommodate the need to ensure that assessments of products take account of the wider benefits to society; we make the same recommendation here.

The affordability of NICE guidance and the threshold it uses to decide whether a treatment is cost-effective is of serious concern. The threshold is not based on empirical research and is not directly related to the NHS budget. It seems to be higher than the threshold used by PCTs for treatments not assessed by NICE. Some witnesses, including patient organisations and pharmaceutical companies, thought NICE should be more generous in the cost per QALY threshold it uses, and should approve more products. On the other hand, some PCTs struggle to implement NICE guidance at the current threshold and other witnesses argued that a lower threshold should be used. We recommend that the threshold used by NICE in its full assessments be reviewed; further research comparing thresholds used by PCTs and those used by NICE should be undertaken. An independent body should determine the threshold used when making judgements of the value of technologies to the NHS.

The implementation of non-mandatory guidance is variable. This is due to a variety of causes, including the threshold used by NICE for determining cost-effectiveness, lack of clarity about the status of guidance, lack of involvement of PCTs in the development of guidance and clinicians' disagreement about the worth of some NICE guidelines.

To improve the implementation of NICE guidance we recommend:

  • More help for PCTs to implement guidance;
  • Better assessment of the level of uptake;
  • PCTs should play a larger role in the development of guidance;
  • Better use of experts in the development of guidance; and
  • A change in the terminology used by NICE, to clarify to patients what they can and cannot expect by right from their local NHS organisation.

We also recommend that elements of clinical guidelines be made mandatory. A suitable example would be risk assessment for all patients at risk of developing venous thromboembolism.

Some of the problems we heard in relation to the affordability and implementation of NICE guidance relate to the price of medicines. The OFT recently recommended that a new system of value-based medicines pricing replace the PPRS. We found support for such a system, but there were concerns about how it would work in practice. Discussions between the Government and the pharmaceutical industry are underway, so we make no large-scale recommendations regarding the new scheme. We agree with the Government, however, that better mechanisms are needed to ensure that the NHS pays a fair and affordable price for medicines. We recommend that NICE should be involved in any new system and that any change to its remit should be adequately resourced.

The OFT report indicated that more use should be made of schemes whereby the financial risk associated with some new medicines (where the cost : benefit ratio is uncertain) is shared between the NHS and the manufacturer. We recommend that risk-sharing schemes, such as the recently approved case of bortezomib (Velcade) and the older example of beta interferon and glatiramer acetate, should be used with caution. They should not be used as a catch-all in cases of uncertainty over a drug's benefit. Uncertainty would be better addressed by the careful design and performance of a publicly funded randomised controlled clinical trial. Better use should be made of NICE's 'only in research' recommendation in this regard.

We conclude that NICE does a vital job in difficult circumstances. The development of more and more health technologies and procedures, alongside rising patient expectations and the ageing population, is going to make it even more difficult in the future. Healthcare budgets in England, as in other countries, are limited. Patients cannot expect to receive every possible treatment. Demand outstrips resources and priorities have to be determined. In other words rationing is essential, and NICE has a key role to play. In the past NICE has changed in response to new challenges, and we are sure it can do so again. Given the difficult environment, NICE requires the backing of the Government. Ministers must support NICE, not seek to undermine it. NICE must not be left to fight a lone battle to support cost- and clinical effectiveness in the NHS.

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Prepared 10 January 2007