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NICE: frequently asked questions

  • Last modified date:
    18 November 2010

Responses to frequently asked questions about the future of NICE, including statements from Lord Howe and Health Secretary Andrew Lansley. 

1. What does NICE do now?

1. NICE produces a range of evidence-based guidance on the treatment and prevention of ill health. One of its more prominent roles is as a recognised world leader in the evaluation of drugs and health technologies. Its appraisals of drugs and other technologies look at all available clinical evidence, including data submitted by the drug’s manufacturer and the most recent clinical research. Based on this NICE provides guidance to the NHS on a drug or treatment’s cost effectiveness - it does not ban drugs or treatments.  NICE consults on its draft guidance before publishing its final recommendation to the NHS on how a particular drug or technology can best be used in the NHS.

2. What is NICE’s role in the future?

2. As the White Paper Equity and Excellence:  Liberating the NHS made clear, we are significantly extending the role of NICE. We are aligning and developing NICE’s role in improving service quality in both health and social care. Having one organisation to set quality standards for health and social care will improve levels of integration between them. This enables frontline staff to work better together, and is consistent with the Care Quality Commission’s (CQC) role as a joint regulator for both health and social care. Clear, national quality standards are now being developed by NICE, and the NHS Commissioning Board and the practice commissioning consortia will work with providers to deliver them.

As we develop and implement our plans for value-based drug pricing, for introduction from January 2014, NICE’s role in appraising new drugs is also likely to evolve and we are clear that it will continue to have an important advisory role, including in the assessment of benefits of new medicines. NICE’s role will increasingly focus on giving authoritative advice to clinicians on how to deliver the most effective treatments and on the development of quality standards which set out the standards the NHS should aim for in the treatment of certain conditions.

3. So will NICE still appraise new drugs?

3. Yes, NICE will continue to appraise new drugs until we implement our plans for value-based pricing from 2014, and they will have an important part to play in these longer-term plans.

4. Is value-based pricing a new policy?

4. Our intention of reforming NICE and the move towards a new system of value-based pricing was first set out in the Coalition Agreement document published in May 2010.
12 July: White Paper sets out the expanded role of NICE
27 July: £50 million additional funding for cancer drugs announced
1 October: £50 million additional funding for cancer drugs available
27 October: Cancer Drugs Fund consultation launched

5. How does NICE fit in with the £50m interim cancer drugs funding and the April 2011 Cancer Drugs Fund?

5. The £50m additional funding for cancer drugs available from 1 October 2010 means that cancer patients will be able to access these drugs now to help extend life or improve quality of life, ahead of longer term plans to change the way the NHS pays for drugs. This £50m interim measure will help those cancer patients who need access to drugs now, and precedes the Cancer Drugs Fund due to commence in April next year. Doctors have been put in charge of deciding how the funding is spent for their patients locally based on the advice of cancer specialists.

We have now published our proposals for arrangements for the Cancer Drugs Fund, which will run from April 2011 to the end of 2013. These are in line with our commitment to hand power back to clinicians and ensure NHS funds are spent in ways that secure the greatest benefit for patients. The £200m a year funding will help clinicians and patients access drugs that NICE has not been able to appraise positively due to concerns about cost effectiveness, or where it has not issued guidance, or where it has been unable to issue guidance, for example on the use of a drug outside its licensed indications.

NICE continues to play a pivotal role in ensuring patient access to clinically and cost effective drugs and treatments. NICE has a well-deserved reputation as an international leader in its field and, as set out in the White Paper; it remains at the heart of our plans for liberating the NHS, including significant expansion of its role on quality standards. We are clear that NICE plays an important vital advisory role in our plans to introduce value-based pricing.

6. What is value-based pricing?

6. Over the next three years, the Government will be working towards a new system of pricing for medicines, where the price of a drug will be linked to its assessed value. Value-based pricing will bring the price the NHS pays more in line with the value that a new medicine delivers, i.e. the benefits doctors and patients will see from a drug.

Currently the NHS is faced with the decision of whether to say, in effect, ‘yes’ or ‘no’ to a new drug at the price proposed by a pharmaceutical company.  The NHS is in some respects a ‘price taker’ in this current system, and its only real option if the price of a drug is set too high is not to use it. We want to change this so the price of a drug to the NHS is based on an assessment of its value, rather than pharmaceutical companies being free to set whatever price they choose. Value-based pricing will ensure licensed and effective drugs are available to NHS clinicians and patients at a price to the NHS that reflects the value they bring. The new system will encourage the development of breakthrough and truly innovative drugs which address areas of significant unmet need.

7. When are you consulting on plans for value based pricing?

7. The new system of value-based pricing will be introduced from January 2014, when the existing Pharmaceutical Price Regulation Scheme expires. Our proposals to ensure that licensed and effective drugs are available to NHS clinicians and patients will be set out in a public consultation before the end of 2010.

8. When will value-based pricing be implemented?

8. Over the next three years, we will be working towards a new system of pricing for medicines, where the price of a drug will be linked to its assessed value.  Key steps in this process are:

July 2010: Publish proposals in White Paper to re-establish NICE, from 2012, and place it on a firmer statutory footing
October 2010: Make interim funding available for additional NHS cancer drugs
Winter 2010/11: Consultation on plans for value-based pricing
April 2011: Create a Cancer Drugs Fund to enable patients to access an increased range of cancer drugs to operate until full transition to new pricing process
April 2011: Begin work to develop new pricing process with drug companies
January 2014: New pricing process operational

9. Why introduce value-based pricing?

9. We want to reform the system so that the price of a drug to the NHS is based on an assessment of its value, rather than pharmaceutical companies being free to set whatever price they choose. Currently, drug companies set prices for branded drugs (within the framework of the PPRS). Under value-based pricing, we won't need a ‘yes’ or ‘no’ recommendation on whether a drug should be used in the NHS because clinicians can be confident that its price accurately reflects its value. 

10. Is NICE’s role now ‘redundant’?

10. Absolutely not. We have been very clear that NICE, as an international leader in the evaluation of drugs and health technologies, will continue to have an important expert advisory role, including in the assessment of clinical benefits of new medicines.  As we implement our plans for value-based pricing from 2014, NICE’s role will inevitably change because we will no longer need to be asking quite the same questions about a new drug.  We will focus NICE's role on what matters most – advising clinicians on the best way to use treatments and on the development of quality standards – rather than making recommendations on whether patients should be able to access drugs that their doctors want to prescribe.

Our thinking is that NICE will be the source of advice on the relative cost-effectiveness of new medicines, although this in future will be combined with other aspects of value before a reimbursement price is determined. Given the expertise of NICE, they will play an important role in any new system, but the details will depend on the responses to the consultation. The assessment of relative clinical and cost effectiveness of treatment options will play a continuing part in clinical guidelines.

11. So will they no longer have the power to ‘ban’ drugs?

11. NICE has never had the power to ‘ban’ drugs. Its appraisals of new drugs take into account all the latest clinical evidence from a variety of sources, including data submitted by the drug’s manufacturer, as well as other interested stakeholders. After careful consideration of this evidence by an independent advisory committee made up of clinical experts, industry representatives and lay people, and at least one round of public consultation, NICE publishes its guidance on how a drug can best be used in the NHS to deliver benefit to patients and make best use of finite NHS resources.

12. But if NICE does not recommend the drug to the NHS, patients aren’t able to receive it – isn’t this effectively a ban?

12. No. While the NHS is legally obliged to fund drugs NICE recommends – a negative NICE appraisal is not a ‘ban’ and clinicians can prescribe any licensed drug if their local PCT is willing to pay for it. Nor are clinicians required to use NICE-approved drugs if they do not believe them to be clinically appropriate for a patient.

Individual patients will have different requirements and reactions, and doctors are free to recommend what they see as the most effective and appropriate treatment for their patient. Primary care trusts have processes for considering requests by clinicians to use drugs in individual cases that would not normally be funded.

13. How many drugs have NICE not recommended?

13. To date, 83 per cent of all NICE's appraisal recommendations have supported use of the drug (or treatment) for some or all eligible patients; 72 per cent of NICE's cancer drug recommendations have supported use of the drug.

14. Will you remove the mandatory funding ‘direction’ for NICE-approved drugs?

14. Prior to the introduction of value-based pricing, we will continue to ensure that the NHS funds drugs that have been positively appraised by NICE.

We will be consulting on our plans for value-based pricing before the end of the year and increasing patients’ access to effective drugs is at the very heart of our plans.

NICE will continue to play an important role in advising on quality standards of treatment in the NHS and social care including after the introduction of value-based pricing. The purpose of value based pricing will be to enable clinicians to make available those treatments which are clinically most appropriate for their patients, at a value-based price.

15. Isn’t NICE’s role in assessing drugs important?

15. Yes, much of the kind of work NICE currently does will still be needed to support the process of determining a value-based price.  And clinicians will still need authoritative advice on how new and existing treatments best fit into the treatment for a particular condition. That is why we are confident that, while NICE's role will inevitably change under new a value-based pricing system, it will continue to have an important part to play.

16. Will GPs now decide whether or not drugs are funded?

16. GP commissioning consortia will, as PCTs do now, ultimately take responsibility for the resources used to commission healthcare services. However, like PCTs now, GP commissioning consortia will be expected to fund services and interventions which are clinically and cost effective. Our plans for value- based pricing aim to ensure that clinically-effective drugs are cost-effective – and that funding should therefore be made available for them – because the price the NHS pays for them will reflect the value they bring patients.

Doctors already decide what they see as the most appropriate treatment for their patient: NICE guidance does not replace that judgement. If NICE has not recommended use of a particular treatment on the NHS, the local PCT can still make its own decision on whether to fund it, either generally or in specific cases. We have been clear that we want clinicians to be able to prescribe the drugs they believe will benefit their patients, and for patients to have a say in decisions about their care. Value-based pricing will enable this.

17. Will the £30,000 QALY threshold be abolished in 2014?

17. NICE has never had a strict QALY (quality adjusted life years) threshold of £30,000, and has in some cases recommended drugs that exceed this amount. Value-based pricing will mean that the NHS will pay a price for drugs that better reflects their value, and that medicines will be made available to patients if their clinicians recommend them. Our consultation will look at how we make sure this happens.

18. Will the changes result in patients in one area receiving drugs while patients in neighbouring areas won't?

18. Our plans are about improving access. But there are two broad points relevant to the current situation. First, NICE sets an underpinning standard of access to specific treatments across the country. But what happens as a result of that is that the NHS often defaults to this standard. Doctors should have access to the treatments they wish to give their patients, and our plans will give them that freedom by ensuring that the prices set for drugs represent value.

Second, NICE has made key contributions to improving standards of NHS care, but it hasn't solved all the access problems. Even when it recommends a treatment, there are still often significant variations around the country in the extent to which that treatment is actually used, and which cannot simply be explained by different levels of need - there's no 'guarantee' in that sense. So, although there's this issue about drugs, there's actually a far more important issue about whether patients are being diagnosed quickly enough, whether they're seeing the right specialists at the right time, and whether those specialists have the appropriate level of expertise - and these factors are even more important than NICE's decisions in determining whether patients get access to the most effective drugs for them. That is why we need to focus the NHS on patient outcomes, and give professionals the freedoms to care for patients how they see fit. And that is what our wider reforms are about.

Lord Howe on future role of NICE

"NICE is recognised as an international leader in the evaluation of drugs and health technologies, and it will continue to have an important advisory role, including in assessing the incremental therapeutic benefits of new medicines. However, as we implement our plans for value-based drug pricing from 2014, NICE’s role will inevitably evolve. Its work will increasingly focus on giving authoritative advice to clinicians on how to deliver the most effective treatments, and on the development of quality standards."

Health Secretary Andrew Lansley on future pricing of drugs.

"In the current financial climate the NHS faces great challenges. We will need to do more with less if we are to continue to provide high quality care to an aging population and we will need to keep pace with the developments in medical technologies.

"The NHS must use every penny wisely and reforming the way we pay for new medicines is a key part of this. We need a system that encourages the development of innovative drugs addressing areas of significant unmet need. And we need a much closer link between the price the NHS pays and the value that a new medicine delivers, sending a powerful signal about the areas that the pharmaceutical industry should target for development.

"Over the next three years we will be working towards a new system of pricing for medicines, where the price of a drug will be linked to its assessed value. Value-based pricing will ensure licensed and effective drugs are available to NHS clinicians and patients at a price to the NHS that reflects the value they bring.

"I am determined that not only will we have a reimbursement price for medicines which reflects their benefit to patients, but also one which incentivises innovation, and supports those new medicines which respond to unmet healthcare need and those which provide wider benefits to society.

"Most importantly, using our Cancer Drugs Fund in the interim and value-based pricing for the longer-term, we will move to an NHS where patients will be confident that where their clinicians believe a particular drug is the most appropriate and effective one for them, then the NHS will be better able to provide it for them."

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