Efforts to reconcile healthcare quality with cost control within the National Health Service (NHS) in the future will depend in part on the National Institute for Health and Clinical Excellence (NICE). Established in 1999, NICE’s role is to provide independent national guidance about health promotion and disease prevention for England and Wales, The agency’s remit covers public health, clinical guidelines and technology appraisals.

It is in the area of technology appraisals, which encompass recommendations on new medical treatments, that its role has been most controversial. Using a guideline that limits affordability for NHS drugs to £30,000 per patient per quality-adjusted year of life, NICE has drawn fire from patients’ groups and some physicians for initially declining to recommend some of the newest treatments, such as Tarceva, a lung cancer drug, and advising restricted use of others, such as Aricept for Alzheimer’s, after determining that they did not provide sufficiently positive outcomes to justify the high costper patient.

Meanwhile, some Strategic Health Authorities have balked at the high cost of some treatments that have been recommended by NICE, leading to a much-lamented “postcode lottery” in which patients’ access to medicines depends on where they live. “We all know that if the public gets behind a medicine, politicians in England find it very hard to say no when they know people in France and Germany or Scotland are getting it,” says Jon Sussex, deputy director of the Office of Health Economics.

Alan Maynard, an economist at the York Health Policy Group in the Department of Health Studies of the University of York, and chairman of York NHS Trust, has criticised the agency for focusing on expensive new treatments rather than evaluating the costeffectiveness of all treatments the healthcare system is using. “The problem with NICE advice is that it squeezes out other activities,” he says. “Much of the stuff coming out of NICE is only marginally cost effective. They are looking only at new technology, and it’s a very narrow range of very expensive drugs.”

A NICE spokeswoman pointed out that the institute can only evaluate topics referred to it by the Department of Health; NICE’s clinical guidelines cover a much wider range of treatments, she adds.

Despite its perceived faults, the NICE model for evaluating the cost-effectiveness of medical treatments has earned close attention from governments abroad—even the US, which is in the midst of a political battle over healthcare reform that will require the government to lower expenditure significantly. If the NICE model catches on in the US, where patients currently pay substantially more for drug treatments than in Europe, the agency’s European profile will become even higher.

Meanwhile, the Conservatives have pledged to implement a strategy that will allow drug companies to launch new drugs through the NHS, but priced only according to the benefits they bring to patients. So-called value-based pricing, the party says in its healthcare policy, will encourage the NHS to use whichever medicines are clinically effective, rather than simply cost-effective. NICE’s role would then also involve negotiating with drug companies to set fair prices for medicines, rather than refuse new treatments that it deems not to be cost-effective*.
* “Renewal: Plan for a better NHS”, Conservative Party policy document, 2009.