NICE price?

An unprecedented attack last week on pharmaceutical prices by the National Institute for Health and Clinical Excellence chairman Michael Rawlins, signals a controversial new role for the UK health watchdog in the forthcoming overhaul of drugs pricing, experts say.

Prof Rawlins’ comments were in part prompted by the fierce criticism NICE received for failing to approve a batch of new kidney cancer treatments. Some observers said however, that such an outspoken attack was prompted by other motives.

Joe Collier, an emeritus professor of medicines policy at St George's, University of London, said that Prof Rawlins was "jockeying for a central role in price negotiation" in the forthcoming overhaul of the Pharmaceutical Price Regulation Scheme.

Tony Harrison, a senior fellow at the King's Fund, said: "This would be a big step-up for NICE. But people I've spoken to have heard Rawlins making these kind of comments in private before."

The speculation was given credence by comments made by the Association of the British Pharmaceutical Industry. Richard Barker, the group's director general, told the British Medical Journal: "NICE was not created to set medicine prices – nor indeed to drive them down, as NICE's chairman now seems to see as his mission."

For decades the PPRS had guaranteed drugs companies profit margins on each product. Following severe criticism from the Office of Fair Trading last year, the government pledged to scrap the arrangement.Final details of the deal are supposed to released by the DoH within the next month or so, though negotiations are still thought to be on going and a Department spokesman would not give a precise date for their release.

Mr Harrison said however, that the interim PPRS agreement, which appeared on the Department of Health website on August 13, already indicated that value for money was being given greater priority. In section 12.7 it states that in deciding on the cost of drugs to the NHS, the government would take into account the "forecast sales and the effect on the NHS drugs bill and "the clinical need for the product". "This itself is extremely significant," said Harrison.

Mr Collier said, however, that the interim report still appeared to allow industry to set prices. He predicted the new deal, to begin in January, would be more radical. Previously, the Commons Health Select Committee has called on NICE to have a central role in negotiating prices.

Collier thinks NICE may have already been assigned a major role in the new arrangement, possibly as a key adviser to government officials before they begin negotiating the price of a product. "NICE is beginning to flex its muscles. There will be regulation on prices; NICE will be involved in it and prices will go down," he said.

He said involving NICE would make sense. "They're the people who are probably best placed to say how much the drugs should cost."He added that such an arrangement would "not be all bad for the industry". "If NICE gets involved in pricing as soon a drug is launched, then, at least the company will be able to start selling the product straight away if a price is agreed."

Dr Barker said, however: "NICE's role, critical for the NHS, is to value medicines – but the recent decisions on kidney cancer confirm that we need to re-examine how they define value. We need less soulless arithmetic and more clinical judgment."

A spokesman for NICE would not comment on what role, if any, it would have in drugs pricing

By Michael Day
PharmaTimes