NICE’s Growing Influence on UK Drug Pricing

NICE doesn’t set drug prices in the UK, companies do. But the agency’s influence on pricing, if indirect, will nevertheless grow considerably given the UK’s new Pharmaceutical Price Regulation Scheme, published late last year following a surprise renegotiation of the agreement.

“The PPRS has increased price flexibility quite deliberately, and NICE has a role to play in enabling that flexibility to be applied in appropriate circumstances,” said NICE CEO Andrew Dillon in an interview on Thursday.

Aside from the overall 3.9% price decrease slapped on all branded drugs from February (with a further 1.9% due next year) the PPRS formalizes options for a variety of patient access schemes, including outcomes-based programs that allow for a price increase in the light of new evidence around a drug. It also proposes conditional pricing based on the collection of additional evidence, the possibility of rebates in the event that a drug fails to deliver the promised benefits, and risk-sharing set-ups along the lines of that proposed by Janssen-Cilag in 2007 for blood cancer drug Velcade.

All this means more work for NICE, since its role is to assess any additional evidence that might justify a price increase, rebate, or price decrease. Under the new scheme companies can request a re-review from NICE based on “significant” new evidence. “We already keep guidelines up to date,” points out Dillon, but “the difference is that in the past, we decided when to re-consider [a particular drug or drug class]. From now on, companies can come and ask us.”

NICE plans to meet all those additional requests—and let’s face it, there will likely be a few—by establishing a fourth advisory committee (the current three comprise about 30 experts each) and increasing staff in its technology appraisal team. It hasn’t yet committed to responding in any particular time-frame, but “we want to make sure we deal with [all requests] as fast as we can,” Dillion told The IN VIVO Blog. Step one will be for NICE to “ensure that we agree the evidence is sufficiently materially different” to be likely to warrant either a premium price, or a change in a previously negative recommendation. Assuming it is, the product would go through the same standard technology appraisal as any new product does currently.

Companies: Apply Early

But why should NICE prioritize re-reviews that could lead to price rises, over reviewing new medicines or technologies? Well, for one thing, the PPRS allows companies to implement price rises 12 months after they propose them, unless negative NICE guidance has appeared sooner. More significantly, it’s the agency’s job is to re-review important treatments in the light of new evidence anyway. “But clearly, if a company comes earlier than expected to ask for consideration, the effect is simply to advance a review that we would otherwise have done,” notes Dillon.

So get in there early, companies, with your new evidence—so long as it’s meaty.

And get in there early with your proposals for Velcade-style risk-sharing schemes, too. These needn’t only appear as a desperate last measure following a negative appraisal. “If companies have an idea that the scheme might be part of the solution, and it’s in their heads at the time of embarking on a [first] NICE appraisal, we’d much rather hear about it at the beginning,” emphasizes Dillon. “Otherwise it just extends the process” since NICE would then have to start again to review the practicalities of a risk-sharing scheme.

Extended processes are the last thing NICE needs, given its growing workload (fee-for-advice services and masterclasses for smaller companies are also on offer) and its promise to issue guidance within six months of a product’s approval.

Let’s hope the UK government, after bailing out the banks, has enough left at the start of the new financial year in April to grant NICE the extra funds its applying for.