The National Institute for Health and Clinical Excellence (NICE) needs to become “the entrance to the NHS as a living laboratory for healthcare innovation,” says Richard Barker, director general of the Association of the British Pharmaceutical Industry (ABPI).

The industry currently regards NICE as a barrier to innovation, Dr Barker warned, speaking at a Westminster Health Forum seminar  in London this week. Because of the large proportion of new medicines, especially cancer treatments, which have been refused or severely restricted by the Institute since the introduction of Single Technology Assessments (STA), patients here are being denied access to the latest treatments and the UK has moved from being a preferred “early launch market” for manufacturers to a “later or questionable launch market,” he said.

This also means that the UK is becoming a less attractive location for next-generation clinical trials, Dr Barker went on.

Moreover, while NICE is admired globally for its evidence-based guidelines and the economic rigour of its Health Technology Assessments (HTA), its decisions often have limited impact in the UK due to “second-guessing” by local NHS organizations, he said. The NHS says “no” unless NICE says “yes” but, too often, a “yes” from NICE means just a “maybe” from the local NHS.

Various “sticking plasters” have been applied to try to deal with these issues, including flexible thresholds, end-of-life care, patient access schemes, flexible pricing, patient reimbursement and the Innovation Pass – which has now largely been superseded by the Cancer Drug Fund.

However, he said, a number of unsolved problems remain for NICE to address, including how to: - reflect innovativeness and other societal values in a Quality-Adjusted Life Year (QALY)-dominated system; -  assess value where clinical evidence is necessarily very limited; - get the patient and clinician perspectives fully into the process; - avoid UK HTA demands becoming a disincentive to launch here; and - reduce the regulatory burden and complexity and thus make innovation more affordable.

One of the drawbacks of the government’s planned move to a value-based pricing (VBP) system of paying for drugs for the NHS is that NICE would become involved in commercial negotiations, Dr Barker added. Other problems with VBP are the mismatch which would be created with international reference pricing - you can’t have both, he said - and the fact that there is limited evidence of benefits with such a system.

On the other hand, he said, VBP is “inherently logical,” and it would release both the NHS from the arbitrary control of the medicines bill and the industry from the Pharmaceutical Price Regulation Scheme (PPRS) profit cap and periodic price cuts.

Outlining his “prescription” for NICE for the next decade, Dr Baker called on the Institute to: - broaden its value parameters to better reflect innovation and other societal values; - agree in advance the clinical trial requirements needed to demonstrate value; - reflect uncertainties by defining value ranges in appraisals; - speed up the appraisal-appeal-reappraisal process; - leave reimbursement negotiations to the Department of Health; - focus its resources on clinical best practice; and - ensure that the Institute and the NHS complete the “innovation cycle.”

“As debate begins on the design of a future value-based approach to how the NHS pays for medicines, it’s vital we have a parallel debate on the role and focus of NICE,” said Dr Barker.

“If we want the NHS and the UK economy to benefit from a vigorous life sciences sector, the reshaping of NICE’s remit is an urgent priority.  A focus on the future value of innovation, rather than decisions made on narrow cost-effectiveness criteria, would mean that NICE could play an important pivotal role in an outcomes-driven NHS,” he added.