Andrew Lansley’s big mistake

NICE is not perfect. It never has been. It has, though, been a good start at trying to examine evidence and come to a fair and equitable decision as to what healthcare interventions to publically fund. NICE has faults. It has become a bit too easy on lobbyists – especially health care charity lobbyists – and it has not often published the detail of funding decisions pitched to them by pharma (they say it’s commercially confidential, I don’t think that’s good enough.) But NICE has protected us from some things. The hysteria of Herceptin, for example (doctors offering a standing ovation to unfinished research showing a small benefit, when the Observer leader told us it was an ‘instant cure-all’. ) It has provided a second look at pharmaceutical companies offering false hope and large price tags. If anything, NICE hasn’t been strict enough, allowing people with  self- interests to serve on committees and in potentially conflicting ways; but it was much better than the mess of local funding and inequality which preceeded it and which was grossly unfair.

Lansley has now decided to stop NICE’s power of rationing. This is an odd political decision to make. The NHS has to be rationed in some ways – infinite spending does not compute. Politically, passing this chalice to a transparent and independent group working on the basis of evidence is a good one. The politician can decide how low (or high) a cost effectiveness computation has to be before they will fund it. But  Lansley thinks that NICE should continue to merely issue guidelines -and frankly, doctors are awash with guidelines –  but lose their ability to decide on rationing. That decision will be left, apparently, to individual doctors. What is the evidence that doctors will do this wisely, fairly, based on evidence? None. Before NICE, rationing was erratic, and the concept of evidence was relegated to whatever drug rep had just darkened a doctors’ door. If you look through any prescribing data from doctors you will find all kinds of non evidence based, expensive or brand name prescibing being done when an alternative would have been cheaper and just as good. But crucially, better prescribing is not just as good for the patient, but better for other patients, because there is  more left in the pot to spend on them. American healthcare is a good example of ‘doctors choice’ gone berserk – non evidence based interventions are expensively everywhere and does no one any good.

I note that spokespeople for the pharmaceutical industry have been out in force, gleeful with Lansley’s decision, and supporting the idea that ‘doctor knows best’, and whatever a doctor thinks a patient should have, they should get. This is a disaster. The problem is that if you want to find evidence for anything, no matter how unlikely, to work, and you look hard enough, you can probably find it. What you may not have the luxury of doing is then searching for the full amount of research on the area and adding them up together – and finding that your proposition doesn’t work at all. This unblinkered view is what NICE proposed; to ensure that public money was not being badly spent. But now we will have Lansley’s brave new NHS world, with individual GP consortia now left to try and commission services separately – each trying to do a bit of what NICE did before. When NICE said that something wasn’ t cost effective, it was a fair and transparent statement of what the NHS would and wouldn’t fund. Patients could accept that. Doctors worked to it. But now, there will be no such dignity. Doctors, with ‘the ability’ to prescribe what they want, will be placed in harsh places when desperate patients want things that are very unlikely to work – and the freedom to go elsewhere if- if –  that doctor declines. For what individual doctor will feel that they have the authority of NICE ? Thank God I’m in Scotland.

7 Responses to “Andrew Lansley’s big mistake”

  1. Michael November 1, 2010 at 10:50 pm #


    I felt very much like you at first, but we don’t know yet what “value-based pricing” will be. It may turn out that NICE does much the same sort of evidence synthesis + appraisal, and economic analysis to determine what an affordable price is.

    A problem with NICE’s approach using QALYs is that it uses prices set by industry, so industry can game the system to maximize its returns. Industry can work backwards from the threshold of affordability + evidence on effectiveness to calculate the maximum price it can charge. I have no direct evidence for this suspicion, but knowing that self-interest is the mother of money-making innovation I am pretty confident that my guess is correct.

    “Value-based pricing”, *might* therefore strengthen NICE/DoH negotiating power. Or, it might not. I am waiting anxiously to find out, and hoping that reason wins the day.

    A further problem with using NICE as a rationing instrument is that NICE could decide to ration particular drugs or technologies. It could not decide how the budget cake was to be divided up. In other words, it did not take into account the opportunity costs of its decisions. I rather suspect that “value-based pricing” will also be unable to take account of opportunity costs.

  2. Jo November 2, 2010 at 4:57 pm #

    Polly Toynbee wrote a good comment piece about this in today’s Guardian online…

  3. Margaret McCartney
    margaretmccartney November 3, 2010 at 9:19 pm #

    thank you….PT makes sense.

  4. 1971Thistle November 4, 2010 at 10:30 am #

    Hmm, I have to disagree with both commentators here.

    To Michael, what you suggest – “Industry can work backwards from the threshold of affordability + evidence on effectiveness to calculate the maximum price it can charge” – is simply not possible, as there is no indication what the likely uptake of the treatment will be, or what restrictions NICE may place on use. The WHO said in it’s priority medicines report:

    “In Europe, all governments control prices in different ways. For companies, this final critical stage remains unpredictable. They do not know how long it will take for a decision, what the final price will be and whether additional studies will be required… This results in an unpredictable lottery for companies who have brought a product through a series of regulatory hurdles and still do not know what the final reimbursement price will be.”

    To Jo, I did not like Polly Toynbee’s article (mind you, never do), and I think it misrepresents the role that NICE plays. When she states “For the first time Nice made NHS rationing explicit and transparent,”, this ignores one of the biggest criticisms of nice, from manufacturers and patient, that it’s decisions were not transparent, and often at odds with many other countries.

    The issue of pricing of medicines is deeply misunderstood. Only a few countries in Europe allow manufacturers to set prices for their products. As it happens, the UK is one of them. What happens is that other countries use countries like the UK as a reference point, to which they will price at, say an average of say, 90% of the UK + Germany + France prices (for example). So to reduce the price in UK, to meet an often arbitrary threshold for an NHS price, will impact the price throughout the rest of Europe. It’s all very well to take a “We’ll do what’s best for us” approach, but if you do not consider the wider implications, don’t be surprised if suppliers do.

    I think the majority of the pharmaceutical industry accepts that there are limits to what can be reimbursed. However if that is to happen, then there is a need for transparency on how innovation is valued, so that manufacturers know where to invest time and resources.

  5. Margaret McCartney
    margaretmccartney November 7, 2010 at 10:40 pm #

    but thistle, do you not think that the answer has to partly be in trying to improve the pricing system rather than working everything else around it?

    and surely if the pharmaceutical industry is still allowed not to publish clinical trials they don’t like, is still allowed to ghost articles and pay doctors for nice quotes and keynote speeches – surely we have to be careful around where we invest ‘time and resources ‘ – I know there are a great many people working in the pharmaceutical industry with the highest standards and who are committed to helping people with their innovation and hard work – but the way that many interactions with patients, doctors and pharma still go on mean that I am not quite ready for a new kind of market based on trust…..

  6. 1971Thistle November 17, 2010 at 4:48 pm #

    Dear Margaret

    The problem is that the government (not the manufacturer) in each country in the EU is free to set the price it wants; this is compounded by the fact that some countries set their prices referenced to other countries. Which means a price cut in one country leads to a price cut in others.

    Furthermore, if the differential becomes big enough between low-cost and high cost countries, then it becomes more attractive to export medicines than supply the home market. If the price in, say, Greece, is cut by 25% (as recently happened), then Greek wholesalers will export to high price countries and pocket the difference. It’s perfectly legal – free movement of goods – but adds no value to the supply chain.

    A single European price may help that, as would national prices only applying within national borders (i.e. medicines bought at Greek prices cannot be exported to higher price markets