The National Institute for Health and Clinical Excellence (NICE)'s Citizens Council will this week examine the issue of discounting - the way in which NICE should value and calculate health benefits over a very long period of time.

How future health is valued over a long period, and determining the costs associated with treatments providing long-term benefits, are "tricky" questions and "exactly the sort of issue about which NICE wants the public's viewpoint," said the Institute’s chairman, Sir Michael Rawlins, speaking ahead of the Citizens Council's annual meeting in London this week.

Discounting is an important issue for NICE, because one of the Institute's "key functions is to assess whether the NHS should provide new treatments based on the value for money which that particular treatment provides for the NHS based on its benefits for patients and cost," said Sir Michael.

On rare occasions, NICE may assess drugs that provide a lifelong health benefit to patients after only a short course of medication, and this scenario can present particular issues for NICE committees because of the way that generally-accepted economic methods determine how health benefits are valued and calculated over a very long period of time, he added.

As part of its examination of discounting, the Citizens Council will be asked to consider issues such as people's tendency to prefer to have the benefit of "items" - or in this case benefits to their health - as soon as possible, rather than waiting to receive that benefit at some point in the future, Sir Michael went on.

"Also, if the main cost of a treatment occurs in the future, then we need to calculate how much the equivalent value is today. To do this, the cost needs to be adjusted by a certain amount which is called the discount rate," he said.

"The Citizens Council will be asked to consider how different views on valuing future health benefits and costs translate into different discount rates, and how this affects conclusions on whether a new treatment could be considered cost-effective or not," said Sir Michael.

A report on the Citizens' Council's views will appear on the NICE website for public comment, before the Council submits a report to the NICE Board setting out its findings.

- Last month, in a reversal of a previous negative Final Appraisal Determination (FAD), NICE published guidance recommending the use of Takeda's Mepact (mifamurtide) as a treatment for young patients with osteosarcoma, provided the drug is made available to the NHS at reduced cost under a patient access scheme (PAS).

NICE chief executive Sir Andrew Dillon said at the time that only a small number of patients can benefit from Mepact, but the benefits which they do gain continue over the rest of their lives, effectively being a cure. This situation had presented "specific methodological issues" for the Institute's independent appraisal committee regarding the way health benefits are valued and calculated over a very long period of time, and the process had included a clarification from the NICE Board on how discounting is applied in such cases, he added.