{"id":32572,"date":"2014-10-22T12:08:51","date_gmt":"2014-10-22T11:08:51","guid":{"rendered":"https:\/\/blogs.bmj.com\/bmj\/?p=32572"},"modified":"2014-10-22T12:08:51","modified_gmt":"2014-10-22T11:08:51","slug":"james-raftery-nice-and-value-based-pricing-is-this-the-end","status":"publish","type":"post","link":"https:\/\/blogs.bmj.com\/bmj\/2014\/10\/22\/james-raftery-nice-and-value-based-pricing-is-this-the-end\/","title":{"rendered":"James Raftery: NICE and value based pricing\u2014is this the end?"},"content":{"rendered":"<p>Since Andrew Lansley <a href=\"http:\/\/www.ncbi.nlm.nih.gov\/pmc\/articles\/PMC2988556\/\">announced in 2010<\/a> that the NHS would in future use \u201cvalue based pricing\u201d in its purchases of pharmaceuticals, civil servants and (more recently) the National Institute for Health and Care Excellence (NICE) have been struggling to develop\u00a0an approach\u00a0for how this\u00a0could be implemented. For the twists and turns, see <a href=\"https:\/\/blogs.bmj.com\/bmj\/?s=james+raftery+NICE&amp;x=0&amp;y=0\">previous blogs on the topic<\/a>.<\/p>\n<p>At its <a href=\"http:\/\/www.nice.org.uk\/media\/default\/Get-involved\/Meetings-In-Public\/Public-board-meetings\/Agenda-Papers-September-2014-Public-Board-Meeting-1.pdf\">September board meeting<\/a>, NICE considered a document on \u201cvalue based assessment.\u201d This made recommendations based on the results of NICE\u2019s recent <a href=\"https:\/\/www.nice.org.uk\/proxy\/?sourceUrl=http%3a%2f%2fwww.nice.org.uk%2fmedia%2fFE2%2f2B%2fVBA_TA_Methods_Guide_for_CONSULTATION_upload.pdf\">consultation<\/a>. The document provided greater detail than NICE\u2019s <a href=\"https:\/\/www.nice.org.uk\/news\/press-and-media\/nice-calls-for-a-new-approach-to-managing-the-entry-of-drugs-into-the-nhs\">press release of 18 September<\/a>.<!--more--><\/p>\n<p>NICE consulted on six\u00a0questions (listed below) and got 900 responses (summarised below) from industry, patient groups, academics, clinical organisations, and the English Department of Health.<\/p>\n<p>Question one asked: \u201cDoes proportional QALY [quality adjusted life year] shortfall appropriately reflect burden of illness?\u201d Responses: 28% said &#8220;no,&#8221; 33% said &#8220;yes,&#8221; and 39% &#8220;partial.&#8221;<\/p>\n<p>Question two asked: \u201cDoes absolute QALY shortfall provide a reasonable proxy for wider societal impact of a condition?\u201d Responses: 59% said &#8220;no,&#8221; 10% &#8220;yes,&#8221; and 31% &#8220;partial.&#8221;<\/p>\n<p>Question three asked: \u201cDoes a maximum weight of 2.5 in circumstances when all modifiers apply function as a reasonable maximum?\u201d Responses: 73% said &#8220;no,&#8221; 12% &#8220;yes,&#8221; and 13% &#8220;partial.&#8221; [The percentages\u00a0here don\u2019t add up to 100, presumably because of\u00a0rounding.]<\/p>\n<p>Question four asked: \u201cShould separate weights apply to each modifier?\u201d Responses: 79% said &#8220;no,&#8221; 5% &#8220;yes,&#8221; 16% of responses were &#8220;partial.&#8221;<\/p>\n<p>Question five asked: \u201cWould the proposals improve consistency, predictability, and transparency?\u201d Responses: 72% said &#8220;no,&#8221; 2% &#8220;yes,&#8221; and 26% &#8220;partial.&#8221;<\/p>\n<p>Question six asked: \u201cWould risks result?\u201d Responses: 100% yes.<\/p>\n<p>The DH&#8217;s response was that, in general, the maximum weight should be 1.5 times the current lower boundary for cost effectiveness, with a maximum of 2.5 for technologies that meet the end of life criteria, which it considered should be retained.<\/p>\n<p>The paper concluded that:<br \/>\na) Although support was expressed for the incorporation of burden of illness as one of the criteria to be considered, agreement was lacking on how this criterion should be measured and valued.<br \/>\nb) The DH has advised in its response to the consultation that it now wants to retain the current approach in which a QALY weighting is\u00a0applied to drugs designed to extend life at the end of life.<\/p>\n<p>The board was recommended to make no changes to the technology appraisal methodology in the short term, and advised that further consideration should be given to the use of QALY shortfall as a means of quantifying burden of illness and wider societal benefits.<\/p>\n<p>The <a href=\"https:\/\/www.nice.org.uk\/news\/press-and-media\/nice-calls-for-a-new-approach-to-managing-the-entry-of-drugs-into-the-nhs\">NICE press statement<\/a> put this in positive terms, announcing a new office for innovation within NICE, and more productive sharing of risks between companies and the NHS by means of\u00a0NHS England\u2019s \u201ccommissioning through evaluation.\u201d<\/p>\n<p><strong>What to make of this?<\/strong><\/p>\n<p>Firstly, despite the statement in the document that no consistent pattern emerged, most of the proposals were soundly rejected. All but one had a majority of 59% or more answering &#8220;no.&#8221; Four had more than 70% voting &#8220;no.&#8221; I know of no other set of consultation questions that have been so heavily rejected. Whether this was owing\u00a0to careful or careless drafting is moot.<\/p>\n<p>Secondly, the DH view trumped all others in relation to the maximum weights that might be applied to QALY, and to retaining the current end of life criteria. This is the same department that consulted on its preferred approach, <a href=\"https:\/\/blogs.bmj.com\/bmj\/2011\/07\/26\/james-raftery-the-government-response-to-the-value-based-pricing-consultation\/\">but failed to win support<\/a> for its proposed way forward. After which, it passed the problem to NICE. It has now vetoed NICE\u2019s alternative approach.<\/p>\n<p>Thirdly, no change is to be made in the short term. Value based pricing is dead. Rest in Peace (RIP). Like most of the reforms introduced by Andrew Lansley, this policy proved an unworkable distraction.\u00a0Finally, the specific extension of cost benefit analysis practised by NICE (cost per QALY from an NHS perspective) has proved resilient. This has implications for how other countries practise economic evaluation of healthcare.<\/p>\n<p><em><strong>James Raftery<\/strong> is a health economist with several decades&#8217; experience of the NHS. He is professor of health technology assessment at Southampton University. A keen \u201cNICE watcher,\u201d he has provided economic input to technical assessment reports for NICE, but has never been a member of any of its committees. The opinions expressed here are his personal views.<\/em><\/p>\n<p>Competing interests: The author has no further interests to declare.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Since Andrew Lansley announced in 2010 that the NHS would in future use \u201cvalue based pricing\u201d in its purchases of pharmaceuticals, civil servants and (more recently) the National Institute for [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/blogs.bmj.com\/bmj\/2014\/10\/22\/james-raftery-nice-and-value-based-pricing-is-this-the-end\/\">More&#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[915],"tags":[],"class_list":["post-32572","post","type-post","status-publish","format-standard","hentry","category-james-rafterys-nice-blogs"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>James Raftery: NICE and value based pricing\u2014is this the end? 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