Examination of Witnesses (Questions 560
- 575)
THURSDAY 18 OCTOBER 2007
PROFESSOR NANCY
DEVLIN AND
PROFESSOR JOHN
APPLEBY
Q560 Dr Naysmith: They are not the
best attended meetings in the community?
Professor Appleby: The will to
live almost ebbs away! They are not organisations skilled in engaging
the public. Again, they are not bad people and they are not trying
to hoodwink the public, but they just do not put effort into doing
that and they should. You seem to be touching on the top-down
aspect of NICE which was set up to deal with the postcode lottery,
which was the phrase used when it was set up.
Q561 Dr Naysmith: I do not believe
the term "postcode lottery" was used by the Government
or NICE; it appeared in the press.
Professor Appleby: But the idea
that one should not have differences between geographical areas
in terms of access to services was one that arose at the time
NICE was set up. In that sense PCTs are being told what to do,
and yet they are also told to do their own thing, as it were,
given their populations and so on. That problem has always existed
in the NHS. The way that money is allocated through the weighted
capitation formula more or less sets out PCTs' budgets, but it
does not go any further than that. Those budgets are not ring-fenced
in terms of how the formula works. All the PCTs get is a big lump
of money that they can spend as they like which in part leads
to variations in spending. That is a recognition that there is
a national formula, as it were, which tries to deal with the desire
for more equity in terms of access, but how far down the system
does one go to tell it what to do? Presumably, we will not tell
doctors to refrain from treating Mr Smith but to treat Mrs Bobbins.
One cannot go that far. At the moment it stops at the PCT level.
That is the organisation which has bottom-up decisions from clinicians
and so on and top-down decisions from government and national
organisations. They have to wrestle with that difficult issue
and it seems to me there is no way of resolving it one way or
the other.
Q562 Dr Naysmith: You talked earlier
about how PCTs all around the country had some probably quite
expensive special cases panels that met regularly and decided
the same issue in different parts of the country. Is it not better
to achieve that by deciding it nationally so that clinicians locally
can recommend a particular drug? They have to carry the cost of
it in their PCTs.
Professor Appleby: I do not believe
so. The point about the exception panels is that they deal with
individual cases, so a consultant may want to prescribe a particular
drug which the local PCT says it will not fund except in certain
circumstances. It is so detailed that they have to discuss the
actual medical case of the individual with the consultant.
Q563 Dr Naysmith: But is it not possible
to do something to deal with what are often very expensive and
exceptional drugs?
Professor Appleby: That would
be possible only if there was an indisputable common theme to
do with age, say, but the point is that often there is a dispute
between clinicians—they are autonomous, professional people
who feel they are making the right decisions for their patients—and
the PCTs who have the money and are able to fund it but who disagree.
To put it politely, there is a discussion between the two. How
that can be generalised I am not sure.
Q564 Dr Naysmith: Do you have evidence
that there are different individual factors in different cases?
Professor Appleby: There is only
anecdotal evidence from people I know and interviews with those
involved in these panels.
Professor Devlin: In a way, that
is the express purpose of the panels. It is almost like a safety
valve for some of the disinvestment decisions that PCTs make.
Therefore, the exception panels will consider special circumstances
that consultants may wish to put forward. Some process needs to
be there, but it is possible that some general truths, facts or
evidence may arise from them which can inform either other panels
or other disinvestment decisions more generally.
Q565 Chairman: In any health economy
anywhere in the world have you seen citizen juries, as opposed
to health professionals and/or patients, taking decisions about
where expenditure should occur?
Professor Appleby: I am not aware
of what other countries have done along those lines. I know that
in England every now and then PCTs have used informed public opinion,
as it were. A group of members of the public are presented with
evidence by experts and discussions go on. That has fed into a
decision by the PCT.
Chairman: That has happened in my own
area. One has to decide what evidence is used in coming to these
decisions and the views given in the papers presented to us and
what you have said this morning.
Q566 Dr Stoate: We heard evidence
last week that drug companies when pricing new drugs based their
decisions on what the market would bear or, in layman's terms,
what they could get away with. If NICE explicitly dropped its
threshold do you think that would have a bearing on forcing down
the cost of new technologies?
Professor Devlin: I believe that
we commented on this in our evidence. One of the points about
having an announced threshold is that it can inadvertently provide
a target for pricing, so if there is evidence on the clinical
effectiveness of a drug there is at least an incentive to price
that product in such a way that it comes in at or just below the
particular threshold.
Q567 Dr Stoate: Do you believe that
goes on?
Professor Devlin: There is certainly
an incentive for that to happen. I am not sure whether or not
there is hard evidence that it happens in practice and, if so,
to what extent.
Q568 Dr Stoate: You do not know whether
if NICE explicitly dropped its threshold it would have any effect
on the cost of new drugs?
Professor Devlin: In view of the
particular circumstances that exist in the NHS there is a disconnect
between the kind of assessments that are being made regarding
value for money and the way pharmaceutical prices are regulated.
Obviously, there are other health systems around the world that
deal with this rather differently and, for example, harness to
a greater extent the monopsonistic purchasing power that a health
system can have.
Q569 Dr Stoate: You are aware that
most NICE approvals fall outside the fixed price tariff and are
paid by results. Do you believe that the removal of the high cost
exclusions under the tariff could help because it might mean that
approved therapies would be covered by the tariff?
Professor Appleby: How is the
tariff then derived?
Q570 Dr Stoate: If they are inside
the tariff PCTs effectively would not have to bear the full burden
of the cost; if they are outside the tariff effectively they are
placed on the PCTs' budgets?
Professor Appleby: The tariff
for paying hospitals is derived from the cost of hospitals. They
would have to pay somehow. You may be suggesting that somehow
the cost is spread.
Q571 Dr Stoate: That is what I am
saying. The burden on individual PCTs will be less acute.
Professor Appleby: The short answer
is yes, maybe.
Q572 Mr Scott: The report of the
Office of Fair Trading recommended a system of value-based drug
pricing. Is the data available at launch robust enough to allow
value-based pricing judgments?
Professor Appleby: The short answer
is that I do not know.
Professor Devlin: I suppose that
the evidence to which you refer is related specifically to health
outcomes.
Q573 Mr Scott: Yes.
Professor Devlin: The evidence
generated about health outcomes is that which informs the decisions
in terms of cost-effectiveness. In a sense, if the evidence is
good enough to make a judgment on the grounds of cost-effectiveness
arguably it may also support decisions on value-based pricing.
The danger is that that evidence, especially for a new drug, is
generated only within the context of a clinical trial and often
very little is known about the outcomes beyond the trial period,
or for patients when a drug is used in a real setting as opposed
to a clinical trial. Obviously, there are clear limitations that
need to be taken into account in using that evidence, as is also
the case when making use of that evidence to make a value-for-money
assessment.
Q574 Mr Scott: What I am getting
at is that sometimes we learn from the media that a drug will
prove to be a wonder cure for x when tragically in reality
it will not, and perhaps some more robust investigation will deal
with that problem?
Professor Appleby: One cannot
disagree with the general principle that the NHS should maximise
health for the money it spends. Investigating any way of making
that happen is perhaps worth doing. There are issues about the
practicalities of value-based pricing. For example, you have to
collect information about health over a long period of time to
see what the value is. Clinical trial data is just that. We know
that when therapies are used in practice often they will be used
on different populations and will be delivered in different ways
and not exactly in trial conditions. All of those things will
perhaps affect outcome. Having said that, it may be no bad thing
to collect the sort of information that would be necessary for
value-based pricing. Evidence about changes in people's health
status as a result of receiving healthcare on a continuing or
routine basis would provide valuable information for lots of things,
including perhaps value-based pricing.
Q575 Mr Scott: The SMC relies on
cost analysis provided by manufacturers when making decisions,
yet its decisions are almost always consistent with those of NICE.
Does NICE really need the complex system of consultation and draft
guidance that it currently employs?
Professor Appleby: One matter
to bear in mind is the complete timescale involved from somebody
having an idea about a new therapy or drug through to NICE saying
that it is a good buy. NICE's decision are at one end. An awful
lot of time is spent on doing other things, for example testing
the drug and so on. I do not say that that should be cut back,
but we should keep it in context. Clearly, there will be an opportunity
cost to NICE shaving or abandoning its pretty sophisticated consultation
process. There may be an outcry that it is not taking it out to
enough people and so on. I do not know the answer, but clearly
it would be good to minimise the period that NICE takes to review
something. We should not forget that there will be some cost to
doing that.
Professor Devlin: That is a very
good question and it depends in part on the value that is placed
on the process. That is a very difficult matter. My personal view,
which is no more important than anybody else's, is that NICE's
process is superb and internationally it is an outstanding example
of how evidence-based decisions should be made in the public sector.
The process of thinking about what the threshold should be is
just an extension of that; it sharpens up the process and helps
make it yet more transparent. I believe that it would be a loss
to work backwards from that.
Chairman: Thank you very much for the
evidence both written and oral that you have submitted to the
Committee.
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