Reform for the National Institute for Health and Clinical Excellence and a switch to value-based pricing are on the agenda as the new coalition government lays out its proposals for the National Health Service.

While specific plans for the Institute have not been revealed, the new government has announced a move to value-based pricing, as recommended by the Office or Fair Trading back in 2007, under which the prices the NHS pays for medicines reflects their therapeutic benefits.

In addition, the government said it plans to “strengthen” the role of the Care Quality Commission so it becomes “an effective quality inspectorate”, as well as develop Monitor into an economic regulator that will oversee aspects of access, competition and price-setting in the NHS.

The pharmaceutical industry will no doubt be keeping a very close eye on how these policies develop as, in the worse case scenario, they could spell the end of free drug pricing in the UK.

While specific details have not been given in the coalition agreement, the fact that price control has been mentioned alongside the NICE reform and new direction for Monitor could mean that these bodies will, in future, be involved in drug pricing recommendations, particularly as the NHS strives to make multi-billion pound efficiency savings.

“The UK is one of the last few free-price markets in the world as most countries have price controls for medicines, making it an attractive first-tier launch market for innovative drugs”, but “should a price-control function of NICE be introduced going forward, the free-pricing days for pharmaceuticals in the UK may well be numbered,” warn analysts at IHS Global Insight.

Perhaps understandably, the Institute remained tight-lipped on the issue, saying only that it is looking forward to seeing the detail of the government’s proposals for NICE reform and the introduction of value-based pricing.

But speaking to PharmaTimes UK News, a spokesman for the Association of the British Pharmaceutical Industry noted that the UK already offers some of the cheapest medicines in Europe, and while the industry understands the need to demonstrate the value of its products, the difficulty lies in how this can best be done.

No country has yet implemented a system of value-based pricing, he pointed out, and added: “We are keen to begin talks with the government about how this can be achieved, but it's not going to be an easy road”.

Cocktail of policies
Elsewhere, the wider aims of the new coalition agreement, which encompasses an interesting fusion of Conservative and Liberal Democrat party policies and promises to “drive up standards, support professional responsibility, deliver better value for money and create a healthier nation”, have received a cautious welcome.

Still, uncertainty remains over certain aspects of the proposals and how, despite the promise of real-term increases in health spending every year, the NHS’ predicted £20-billion plus shortfall will be addressed.

A key aspect of plans for the NHS is to slash administration costs by a third, which will be achieved in part by putting a stop to costly top-down reorganisations and killing off a significant number of health quangos, in a move designed to save valuable resources that, the government promises, will be diverted to support doctors and nurses on the frontline.

According to Professor Chris Ham, chief executive of think-tank The King’s Fund, while the pledge to end top down reorganisations “suggests a welcome period of structural stability, it is also clear that the next few years will bring significant changes across the NHS”.

Other radical changes listed in the agreement include the establishment of a new independent board to run NHS (an old Conservative policy) that will allocate resources and provide commissioning guidelines, and the election of patients onto local primary care trusts (a Lib Dems’ wish) to give patients a stronger voice in service operation.

The commitment to elect local people to primary care trust boards “may strengthen the link between PCTs and the communities they serve,” said Ham, but he noted that “the desire to increase democratic accountability will need to be reconciled with the powers of the Secretary of State and statutory bodies to appoint other board members, including the chief executive”.

On the primary care side, GPs will be given greater powers to commission care on patients’ behalf, patients will be given the right to register with any GP they want regardless of where they live, urgent care services will be developed, and the current GP contract will be renegotiated to improve access to care in disadvantaged areas.

Commenting on the proposals overall, the British Medical Association said it is pleased that clinical engagement with the medical profession has been prioritised, but stressed that it wants to see “a lot more detail” about the plans before responding to many of the specific policy areas.

Choice of GP potentially problematic
What BMA chairman Hamish Meldrum did say, however, was that while the Association supports “sensible suggestions to improve patient access and choice”, the policy of enabling patients to register with any GP practice will, in reality, “be very complex, potentially more expensive and could threaten that important relationship between a doctor and his or her patients”.

The NHS Confederation said the changes to the way PCT boards and chief executives are appointed “are interesting and could help to make local decision-making feel more transparent and accessible”, but added that the new approach “will need to work with the new NHS board and be balanced with national priorities, not least the need to find £20 billion of savings in the next four years”.

“The service should be under no illusion, the changes as set out today in areas like regulation, the GP contract and out-of hours care represent a considerable shift for the NHS and the challenge now will be to rise to the challenge presented by this new agenda and work to understand its implications,” stressed the Confederation’s director of policy Nigel Edwards.