The NICE Report: A Curate's Egg?

We promised we'd come back to it. Several industry representatives have classified Sir Ian Kennedy's report into NICE's value-assessment methodologies as 'a curate's egg', suggesting something that's part good, part bad...but pretty much spoiled as a result.

The bad bit is certainly Sir Ian's strong endorsement of the NICE's controversial cost-effectiveness measure, the QALY, or quality-adjusted life year, which he's "unequivocally convinced" is an approach that's both "right and essential." (Listen to Sir Ian's podcast here.)

Oh dear. "Sir Ian has been unduly influenced by a small group of UK-based health economists" as to the value of the QALY, said one disgruntled industry representative, in an off-record conversation.

As we reported here, pharma feels the QALY is too narrow and overly quantitative. And while welcoming Sir Ian's calls for more wider, health-related benefits to be included in the calculation--and made more explicit, at that--some are frustrated that he doesn't suggest how. "The way that the QALY (currently) calculates improvement in qualify of life (using a questionnaire) remains crude," says Pfizer's UK managing director Richard Blackburn.

He and others are also disappointed that the report more or less rules out the inclusion of wider societal benefits a drug may bring. For instance, a treatment may reduce absenteeism, thereby benefiting the economy as a whole. But cost-benefits beyond the Health Service isn't NICE's remit, stated Sir Ian--and anyway, casting the net that wide would be too complicated, and would lead to an overall bias in favor of those of working age.

But while falling short of proposing that NICE take the kind of holistic view of a drug's benefits that some companies (and payers) are starting to try to do elsewhere (read our upcoming IN VIVO for some German examples), the report does offer some bright spots for pharma. (Read our full analysis in The Pink Sheet DAILY.)

One of them, allowing higher prices for innovative drugs for a short period, we already talked about. Another is that NICE should be far more transparent across the board, and "redouble" its existing efforts to work more closely with pharma. In particular, the report suggests that NICE deliberations on a product's cost-effectiveness, carried out during the second half of its Appraisal Committee meetings, should be made available by video recording after guidance is made public. (As part of a broader project to kick-start the UK life sciences sector and boost innovation, NICE has already agreed to allow manufacturers to attend the first part of Appraisal Committee meetings.)

The caveat to all this (the reason the egg is spoiled, perhaps?): NICE is not obliged to implement any of the report's recommendations. Still, given that it commissioned this research, "it will be hard for NICE to ignore the proposals," opines Genzyme's Steve Bates, Goverment Relations Director. NICE will issue a formal response at its next public Board meeting in September 2009 and begin a three-month consultation.