The National Institute for Health and Clinical Excellence (NICE) should have the same powers as the UK licensing authority, as the decisions it makes are equally important, UK Members of Parliament have been told.

It is a source of frustration for NICE that it cannot demand to see all the evidence relating to a medicine, as the regulator is able to, and also that, while it can ask manufacturers to conduct data analyses on their products, it cannot then have these checked independently, Karl Claxton, professor of economics at York University and a member of NICE’s appraisal committee, told the House of Commons Health Select Committee’s continuing inquiry into NICE yesterday.

A further source of frustration, added Prof Claxton, is that NICE is only able to issue guidance relating to a product’s licensed indications, even when the medicine is routinely used throughout the National Health Service for unlicensed indications. It cannot make statements about unlicensed use, and doing so would undermine the licensing authority but, as a result, there is a danger that NICE guidances may in fact be irrelevant to much of NHS practice, he warned the panel.

Prof Claxton was also highly critical of both the quality and relevance of clinical trial data which is currently submitted by manufacturers to NICE in support of their products, but suggested that a move away from the Pharmaceutical Price Regulation Scheme’s profit and price controls and towards a value-based pricing (VBP) system, as recommended in the Office of Fair Trading’s report on the PPRS, would provide incentives for companies to make the necessary improvements. The quality of data provided at the moment is inadequate to carry pricing decisions; we need robust evidence, he emphasised.

The OFT report’s author, Simeon Thornton, also addressed the MPs’ evidence session, and told them that the PPRS was no longer fit for purpose. Neither of the Scheme’s controls, on profits and prices, takes any account of a product’s value, and the system’s periodic across-the-board price cuts take no account of whether a product is effective or not, said Mr Thornton, who is no longer with the OFT. He asked how it is possible to set a reasonable price for a drug without examining its effects on patients.

Ensuring value a job for NICE

However, Adrian Towse, director of the UK industry-backed Office of Health Economics, told the MPs that the main challenge put to the Scheme by the OFT report – assuring value for money for the NHS – is the job of NICE, not the PPRS. While prices do not now necessarily reflect individual products’ value, and this needs to be improved, the PPRS’ job is to keep the UK medicines bill under control and provide a backstop guarantee to government that aggregate prices, and company profits, are not too high. In this, it has been very successful, he said.

A NICE assessment is “incredibly important” for the worldwide success of a drug, said Prof Towse. While the UK accounts for just 4% of global demand for pharmaceuticals, countries representing a further 25% of world sales reference UK prices when setting their own, and NICE assessments are often used informally by many governments, he said. The NHS must respond to what NICE does, he emphasised, and pointed out that there is nothing in the OFT report that will speed the uptake of innovation new medicines.

Prof Towse said he was supportive of VBP but not the formula proposed by the OFT; rather, we need to get the current systems smarter, he told the MPs. He also warned that the industry was uneasy with the idea of their products’ prices being set by the government – this would be an area of uncertainty which we have never had before in the UK, he said.