Pharmaceutical companies need to recognise that health systems are entitled to act as informed consumers, according to Andrew Dillon, chief executive of the National Institute for Health and Clinical Excellence, and that putting a value on innovation, which is what NICE does, sends a signal to industry as to what is important to the National Health Service (NHS), he told the Financial Times’ annual pharmaceutical/biotechnology meeting in London this week.

NICE seeks the rapid introduction and optimal use of effective new treatments, he said, but in this context, “optimal” can have two meanings, the first being an unrestricted approach which minimises the risk that some therapeutic benefit, however small, might be missed, although it also exposes and increases costs. The second, selective application based on careful targeting of incremental therapeutic benefits, makes better use of resources but it also means that some indications might not be supported and potential benefits could be missed.

There are risks with both approaches but NICE believes that the second – targeted use with a commitment to review – is the way to go, said Mr Dillon.

Discussing recent examples of collaboration between the industry and NICE, he told the meeting that the results of the risk-sharing scheme covering the beta interferons – Biogen Idec’s Avonex (beta interferon 1a), Merck Serono’s Rebif (beta interferon 1a), Bayer’s Betaferon (beta interferon 1b) and glatiramer acetate (Teva’s Copaxone) - in the treatment of multiple sclerosis are now being evaluated. It is up to individual companies to put forward initiatives for further cost-sharing partnerships such as that agreed for Millennium’s multiple myeloma treatment Velcade (bortezomib), he added, as it is not within NICE’s powers to propose such arrangements. “We can’t actively promote cost-sharing,” he said.

Mr Dillon called on manufacturers to think as much about value as they do about innovation; “new” is not, of itself, sufficient. They should release all data relevant to the product – “not just that which is flattering to it”- and conduct clinical trials bearing in mind the needs of both the regulator and the end-users. More investment in economic analysis is needed, he said.

Turning to NICE’s role in the long-term innovation agenda, he said the Institute was already seeking earlier engagement with manufacturers before this was recommended in Sir David Cooksey’s report on public funding of UK health research, published last December. Mr Dillon said he was “pretty confident” that a pilot scheme, undertaken by NICE with Novartis with the aim of producing proof of concept, would lead to a product, hopefully for launch next summer. This project is slightly outside NICE’s usual remit, and the Institute has been paid a fee for service for the work, he added. NICE's evaluation processes are already “pretty transparent,” but it plans to open up its advisory bodies to public scrutiny next summer, he told the meeting.

There needs to be a “grown-up discussion” about what constitutes real value for patients, said Mr Dillon. NICE would not be involved in any decision to introduce a system of value-based pricing (VBP), as called for by the Office of Fair Trading to replace the Pharmaceutical Price Regulation Scheme (PPRS), but it would provide evidence for both parties, he said.

Anne Pope, director of markets and projects (goods) at the OFT, agreed with Mr Dillon that it is perfectly acceptable for health systems to act an informed customers, and she welcomed risk-sharing schemes as a way forward for the NHS. The OFT’s call for the introduction of VBP is not about cutting the NHS drugs bill, she said, and went on to defend the report’s recommendations against a number of “misconceptions,” for example that it had “ignored incremental innovation,” that it would “disadvantage the second, third and subsequent products in a class” and that it could “adversely affect investment in the UK.” None of this is correct, she said.

A VBP system will encourage high-quality research and innovation in the most useful products, leading to the most effective use of finite NHS resources and improved access for patients, said Ms Pope, and she added that, as the Department of Health and the Association of the British Pharmaceutical Industry negotiations on the future of the PPRS get underway, she hoped they would take account of the debate on the issues now going on outside these talks.