The ins and out of the controversial proposed changes to NICE and its HST assessments
On 14 October, NICE and NHS England published proposals for a substantial revision of the NHS's current obligation to make funding available for technologies recommended by NICE. Changes to the way in which highly specialised technologies (HST) for treating rare diseases are evaluated were also proposed.
In view of the far-reaching implications of the proposals for patients and for industry, it is important that life science companies give these proposals appropriate consideration before the consultation closes on 13 January 2017.
Two aspects of the consultation, in particular, merit detailed review by the industry:
- The proposed introduction of the affordability of a technology as a criterion to be assessed by NICE, and relied upon to delay implementation of NICE's recommendations in all cases where estimated annual budget impact exceeds £20 million. If implemented, this proposal would substantially erode the mandatory funding requirement, meaning short-term budget gains will apparently be permitted to override use of even highly cost-effective medicines
- The proposed application of NICE's cost per quality adjusted life year (QALY) methodology to HSTs. This represents an apparent about-turn in NICE's approach to the consideration of such technologies; NICE has previously recognised that a standard methodology is not suitable for these 'ultra-orphan' technologies, and they have not, to date, been assessed by NICE using a QALY based evaluation. The change in direction proposed in the current consultation therefore requires explanation and justification in the context of what are generally high cost, complex products indicated for only very small numbers of vulnerable patients with serious medical conditions and few treatment options.
Affordability
NHS bodies are subject to a legal obligation to make funding available for all health technologies recommended by NICE in Technology Appraisal Guidance. That obligation becomes effective within three months of the date of publication of guidance, unless NICE specifies an alternative period. In particular, the period for implementation may be extended if one or more of certain factors listed in regulations are present. These factors include that the technology cannot be appropriately administered until appropriate health service resources are in place.
Under the new proposals, the requirement to make funding available would potentially be delayed beyond three months in every case where the estimated budget impact associated with use of a technology exceeded £20 million per annum in any of the first three financial years of its use. According to the consultation document, around 80 percent of new technologies recommended by NICE between June 2015 and June 2016 fell below this threshold. However it would capture highly cost-effective technologies, such as those that achieve 'cure', particularly if costs are concentrated in one year or the early part of therapy, but benefits extend over many years.
For every technology where the estimated budget impact exceeds the threshold, it is proposed that NICE would invite the company concerned to negotiate a commercial agreement with NHS England. The aim would be to reduce the price of the technology, so that the estimated budget impact fell below the threshold. If such an agreement were reached, the standard three-month period for implementation of NICE's recommendations would remain in place. If, however, the budget impact remained above £20 million, NHS England could ask NICE to extend the period for implementation "to allow a longer period of phased introduction".
What this means in practice would have to be determined on a case-by-case basis. However there is a real risk that short-term pressures on NHS budgets will be allowed to delay patient access to new medicines, with higher costs and increased expenditure in the medium to long term as a result, for example, of prolonged patient morbidity and disease progression. It is unclear from the consultation whether such matters have been taken into account in formulating the new procedure.
Furthermore, this proposal represents a substantial shift in the role of NICE, whose technology appraisals have not, up until now, included consideration of affordability. NICE's role in these assessments has been to assess clinical- and cost-effectiveness, whereas the affordability of particular technologies has been regarded as a political decision to be made by government (it may be relevant that, in contrast to technology appraisals, HST evaluations, introduced only in 2013, do include a requirement to consider budget impact).
NICE was reconstituted as a result of the Health and Social Care Act 2012, which provides that, when exercising its functions, the Institute must have regard to factors including "the broad balance between the benefits and costs of the provision of health services or of social care in England". This legal duty clearly requires NICE to consider clinical-effectiveness and cost-effectiveness. However, the view expressed in the current consultation is that it also requires assessment of affordability. The consultation also suggests that, when properly interpreted, the factors which currently permit implementation of NICE's recommendations to be delayed, specifically the reference to the requirement for "health service resources" to be in place, covers budgetary issues and matters of affordability. Such a construction is likely to be controversial, if it is in fact correct. Further, the interpretation claimed in the consultation appears to defeat, or at least substantially weaken, the effect of the funding obligation.
Specialised therapies
Another controversial issue in the consultation is that it envisages the introduction of a new methodology for NICE's evaluation of HSTs, on the basis that NHS England also carries out a specialised commissioning prioritisation process of such treatments, and it is "important that the two processes are properly linked".
The current HST methodology, introduced in 2013, does not involve a formal evaluation of cost-effectiveness. NICE has previously recognised that the cost per QALY methodology is not appropriate for HST products. It therefore conducts an evaluation of 'value for money' in the context of the overall specialised commissioning budget, in these cases. Similarly, NHS England's prioritisation process does not involve any assessment of the cost per QALY of products under consideration, but it carries out an assessment of patient benefits and cost per patient.
However, the consultation proposes the introduction of standard cost-effectiveness assessments in HST evaluations by NICE, based on a calculation of the cost per QALY associated with use of the product, and a £100,000 per QALY threshold value (five times greater than the lower end of NICE's standard threshold). HSTs that meet these requirements will, it is proposed, be subject to the standard funding requirement (subject to the budget impact assessment described above). Technologies with a QALY value above the threshold will not be subject to the funding requirement, but will be reviewed through the NHS England process for prioritising HSTs.
The consultation says that the proposed changes are "supplemental" to NICE's current guidance. However, they appear to be materially different from the existing approach. If implemented, the current processes would need to be changed to incorporate assessment of HST products. Furthermore, the consultation includes no explanation for NICE's apparent U-turn on the application of a cost per QALY assessment to HST products, or on the use of a £100,000 per QALY threshold. It seems unlikely that many HSTs will fall within this threshold, meaning treatments for rare diseases would, in practice, revert to consideration outside NICE, and the mandatory funding requirement would be lost.
Adela Williams is a partner and Jacqueline Mulryne is an associate at law firm Arnold & Porter
