As the future direction of the National Institute for Health and Clinical Excellence is being hotly debated, its chief executive has said that reports of its death have been "greatly exaggerated".

Speaking at the  FT Global Pharmaceutical and Biotechnology Conference in London, Sir Andrew Dillon reflected on what NICE's role will be once the government introduces value-based pricing (VBP) by the end of 2013. Last month, health minister Earl Howe said that the move will make cost-effectiveness decisions by the institute “somewhat redundant”.

Against this backdrop, Sir Andrew said that NICE needs to look "more broadly at the contribution we are making" and the government's moves provide it with "a real opportunity to reinvent itself". It is still unclear what the Institute's role will be but he acknowledged that "someone else is going to decide whether the price is right" for drugs in terms of reimbursement.

Sir Andrew stated that NICE will still "assess clinical and cost-effectiveness of new pharmaceuticals," but will not be asked to make formal recommendations. He added that the supposedly sour relationship between the cost watchdog and drugmakers is not as fractious as many observers have claimed, saying that "it is very rare for us to fall out" with industry and disputes rarely end up in court.