NICE will take on responsibility for assessing the full value of medicines when new pricing arrangements are introduced in 2014, the UK Government has announced.

The Institute says this will be “a crucial role” in the future value-based pricing arrangements for branded medicines, which are set to take over from the PPRS scheme from January 2014.

The new plans will allow the body to build on its current drug evaluation processes by giving it broader scope to assess a medicine’s benefits and costs, rather than just its cost effectiveness.

NICE said that the aim is to make sure that the price the NHS pays for new medicines is more closely linked to their value to NHS patients and society, which are the main tenants of VBP.

The government confirmed the plans in its official response to the Health Select Committee’s report on the future role of NICE which has been published this week.The HSC’s report was damning in its criticism of the government for not having firm plans on value-based pricing and the role of NICE. It had to respond by the end of March, and it looks as if this should be enough to appease the MPs who were concerned over the drug pricing plans.

The health minister Lord Howe said: “We are delighted to announce the central role NICE will take in assessing the value of new medicines. This will allow us to draw on NICE’s world-leading expertise as we develop the value-based pricing scheme.

“The role of NICE is developing and growing as it takes on new responsibilities in social care. We are grateful to the Health Select Committee for their detailed report and helpful recommendations covering various aspects of NICE’s work.

“We know NICE is facing new challenges and have every confidence that its chair-designate, Professor David Haslam [and will become chair on 1 April], will lead it successfully into the future.”

Sir Andrew Dillon, chief executive of NICE, told PharmaTimes UK News: “We welcome the opportunity to take the central role in value based pricing and we look forward to working with the Department of Health and our stakeholders in developing the methods and processes for the new system.”

No longer ‘redundant’

This is something of an about turn from the government, as it was Lord Howe who said in late 2010 at an ABPI conference that NICE would become “redundant” under VBP plans. The former health secretary Andrew Lansley had tried to downgrade NICE’s role in health technology assessment, but this now seems to have been fully reversed since his departure last year.

The original plans spoke of using VBP panels of experts, with NICE’s role simply to be an advisor to these groups, but the lack of clarity meant NICE’s position in 2014 had been in question for nearly three years. This week’s announcement, however, will reassure many in the body that it will continue its work, and have an even greater impact on assessing drugs’ value.

The watchdog said it will now work with the Department of Health and other stakeholders to plan how it will undertake its role in assessing the value of new medicines.

Questions remain, however, about whether NICE will be able to talk directly to pharma about prices – something that must currently be done via the DH – and the future of patient access schemes.

Pharma responds

Stephen Whitehead, chief executive of the ABPI said: “We have always been clear that NICE will have a role to play in conducting the health economic part of value-based pricing.  What will determine whether value-based pricing works for the pharmaceutical industry, the NHS and most importantly patients is not who does the assessment, but how it is done and what goes into it.  This has yet to be determined and we are working hard to secure a policy which will deliver for patients in the future.

“NICE has an important role in supporting growth, which is often overlooked. NICE needs to be an enabler of innovation by the NHS, and this is lacking from the Government’s response. The measures adopted through Innovation, Health and Wealth such as the requirements on the NHS to include NICE-approved medicines in formularies and the NICE Implementation Collaborative are welcome.

“However, we urge the government to keep its foot on the pedal in spreading innovation through the NHS and ensuring that NICE helps to deliver its part of the growth agenda. No patient should be denied access to the best treatment because their trust is slow to innovate, compared to its neighbour, and NICE has an important role in this.”