1. Speaking at the first national conference of the National Institute for Clinical Excellence (NICE) in December 1999, the Secretary of State commented that:

"the NHS, just like every other healthcare system in the world - public or private - has to set priorities and make choices. The issue is not whether there are choices to be made, but how those choices are made. There is not a service in the world, defence, education or health, where this is not the case."[1]

2. Just as the issue of prioritisation is not confined to the UK or to the health sector, neither is it particularly new. In 1986, the Government introduced the Selected List Scheme, a national system that excluded the provision on the NHS of licensed drugs which were deemed to be obsolete or of marginal therapeutic value. In 1994, one of our predecessor committees recommended the extension of the Selected List Scheme beyond the "arbitrary" categories of drugs previously chosen for assessment, such that there would be a comprehensive formulary of recommended medicines with the aim of encouraging better prescribing as well as reducing costs.[2]

3. Towards the end of the 1990s 'postcode prescribing' had become a key issue for the NHS. Examples where access to certain treatments and services differed between health authorities were frequent, and controversies had emerged over access to a wide range of treatments, including beta interferon for multiple sclerosis, and taxanes for ovarian cancer.[3] In April 1999, the National Institute for Clinical Excellence was established, with the task of tackling what had become known as the NHS 'postcode lottery'.

4. Just prior to NICE's launch, the Secretary of State asserted that "NICE guidance will produce a common currency of effectiveness for the NHS, to inform and assist decision-making about treatment and health care at all levels".[4] NICE would do this through conducting appraisals of the clinical and cost-effectiveness of new and existing 'technologies' such as drugs, devices or surgical interventions, and issuing recommendations to the NHS on their use; and through developing more broadly-based clinical guidelines covering a wider range of treatment for different conditions. In addition to this, NICE was also given a role in assisting the NHS with clinical audit. Although the work carried out by the Medicines Control Agency (MCA) and Medical Devices Agency (MDA) in assessing the safety and efficacy of new drugs and devices may have some relevance to NICE's assessments of clinical effectiveness, NICE does not play any part in the licensing of new drugs or approval of medical devices. A full description of NICE's processes and structures can be found in the Annex.

5. Our terms of reference were to consider the progress NICE has made towards achieving the key goals envisaged in A First Class Service,[5] the consultation document that set out NICE's remit in detail - namely, whether NICE:

• is producing clear, credible guidance
• has ended confusion by providing a single national focus
• is providing guidance that is locally owned and acted on in the right way
• is actively promoting interventions with good evidence of clinical and cost- effectiveness so that patients have faster access to treatments known to work.

We also decided specifically to examine the independence of NICE.

6. According to the National Collaborating Centre for Mental Health, the aims set out for NICE in A First Class Service "amount to nothing less than a revolution within the health service", and as such "may take rather longer to achieve than the two-and-a-half years that NICE has existed to date".[6] It is clear that expectations of NICE have been high, and in addition to the challenges of its remit, NICE has also faced the same logistical and operational challenges as all nascent organisations. In this context, we welcome the support we have seen for the establishment of NICE, and we recognise that this represents an improvement on the previous situation.

7. We have also seen evidence of the considerable scale and complexity of NICE's undertaking, conducted in the face of articulate and often vociferous scrutiny from the clinical professions, the NHS, patient organisations, national and international pharmaceutical companies, and the media. Indeed, the evidence we have received attests to the breadth of stakeholders on whom NICE's work impacts, and its pivotal and influential position in the debate on quality, funding and priorities in the NHS. We received over 120 memoranda from a wide variety of stakeholders, including individual patients and clinicians, Royal Colleges and professional clinical bodies, academics from the fields of health policy, health economics and health law, research organisations, NHS acute trusts, primary care trusts and health authorities, statutory Non-Departmental Public Bodies (including the Health Technology Board for Scotland and the Commission for Health Improvement), pharmaceutical companies and associations, and prescribing publications.

8. Between January and March 2002 we took oral evidence from health authorities, from clinicians and academics with a particular interest in and knowledge of clinical guidelines, from several patient organisations, from the Consumers' Association, the Drug and Therapeutics Bulletin, the British National Formulary and Bandolier, from representatives of the pharmaceutical industry, from the National Institute for Clinical Excellence, from Lord Hunt of Kings Heath OBE, Parliamentary Under Secretary of State, and from the lead Department of Health official. We are extremely grateful to all those who submitted oral or written evidence.

9. We are also indebted to our specialist advisers, Professor Joe Collier, Professor of Medicines Policy, St George's Hospital Medical School, and Dr Hilary Pickles, Director of Public Health Policy at the Public Health Laboratory Service, for lending their expertise. Their assistance in a technically complex inquiry has been invaluable.

10. Our terms of reference are not discrete areas for which there are clear criteria by which 'success' and 'failure' can be easily judged, and in many cases they overlap and inform one another. The clarity and credibility of NICE's guidance is obviously crucial to its success in ending confusion by providing a single national focus. The credibility of NICE's guidance is inextricably linked to local ownership, to its success in presenting evidence-based recommendations, and to NICE's independence. Whether or not NICE is facilitating faster patient access is largely dependent on whether or not its guidance is acted on in the right way. In interpreting our terms of reference, we have not attempted to assess the technical merits of individual NICE appraisals, nor to challenge the scientific robustness of NICE's methods and processes. Where we have received evidence that touches on these areas, we have used this as a basis for exploring NICE's performance in a broader sense, and the overarching issues that may impact on it.

11. The report examines our five terms of reference, devoting a section to each in turn. This then leads into a broader consideration, in the final section, of the three key areas where we have made recommendations: the quality and credibility of NICE's work; its focus, organisation and implementation; and NICE in its wider context. In examining NICE's progress, we have focused primarily on its work in producing technology appraisals, although we have considered the other areas of its work programme, including clinical guidelines, where we have received relevant evidence. Our use of the term 'guidance' should be read as referring to both technology appraisals and clinical guidelines.

2   See Second Report of the Health Committee, Session 1993-94, Priority Setting in the NHS: the NHS Drugs Budget, (HC80), para 132. Back

3   Women caught in cancer lottery, BBC online, 29 October 1998,

http://news.bbc.co.uk/hi/english/health/newsid 203000/203494.stm. Back

4   Rt Hon Frank Dobson MP, 31 March 1999, http://www.nice.org.uk. Back

5   A First Class Service: Quality in the New NHS - a Consultation Paper, Department of Health, 1998, Section 2. Back

6   Ev 217. Back