HEDS is part of the School of Health and Related Research (ScHARR) at the University of Sheffield. We undertake research, teaching, training and consultancy on all aspects of health related decision science, with a particular emphasis on health economics, HTA and evidence synthesis.

Tuesday, 2 November 2010

The end of NICE TAs? Yes but, no but….

“NICE to lose powers to decide on new drugs” was the shock headline that appeared in the Guardian last week.  However, it has been known for sometime that the Pharmaceutical Price Regulation Scheme (PPRS) within the UK is to be scrapped and replaced with Value Based Pricing (VBP).  The PPRS aimed to incentivise firms to develop drugs in return for pricing concessions.  VBP, however, directly rewards effective drugs by placing a price on them that produces an agreed incremental cost-effectiveness ratio (ICER).  As such, VBP is seen as a logical extension of NICE’s existing Technology Appraisal (TA) process with NICE, perhaps, instrumental to the price setting porocess (Claxton et al 2008).

More recent consultations – in an industry sponsored report by Kanavos and colleagues (2010) – suggest that pricing should be determined within the Department of Health.  However, they also recognised that HTAs will need to continue in order that ‘value’ (and hence, price) can be determined.  They also suggest that this will require an increase in TAs as NICE doesn’t currently appraise all new products.

Much is yet to be decided with the VBP process.  The two key areas of contention will be whether ex ante or ex post assessments of price/value will be undertaken and how will ‘value’ be assessed (i.e. what factors other than the QALY should be considered and what weight should be given to them).  So, one scenario is that TAs will continue as the cornerstone of reimbursement, but at the other extreme, we could see them diluted to homeopathic levels with prices set at politically convenient levels that ignore opportunity costs to the NHS as a whole.

Any other views will be gratefully received......................

Claxton K et al. Value based pricing for NHS drugs: an opportunity not to be missed? BMJ 2008; 336:251-254.  Available via e-journals.

Kanavos P et al.  Implementing value-based pricing for pharmaceuticals in the UK. London: 2020health, 2010.  Available here.