1.  INTRODUCTION

  1.1  As Chairman of the Ethical Medicines Industry Group (EMIG), I am writing in response to the Health Select Committee's inquiry into the National Institute for Health and Clinical Excellence (NICE). EMIG welcomes the inquiry and is pleased to have this opportunity to provide comments on behalf of small and medium-sized pharmaceutical companies in the UK. While the Association of the British Pharmaceutical Industry (ABPI) will provide a more detailed response, which we support, I thought it would be worthwhile to provide EMIG's perspective on NICE, particularly in terms of the regulatory impact on small and medium-sized pharmaceutical companies.

  1.2  By way of background, EMIG was established in 1985 as a forum for small to medium-sized pharmaceutical companies operating in the UK. We are proud to have over 40 member companies and our aim is to represent their views on industry issues that directly affect them.

  1.3  To give you some context, data provided by IMS, an independent provider of pharmaceutical data, shows that in 2005:

—  88% of UK pharmaceutical companies achieved annual gross sales of less than £50 million (the majority of our members have sales of under £50 million).

—  These companies provided 39% of products, yet only account for 8% of the NHS drugs bill.

  1.4  This clearly shows that, while small companies are contributing considerably less to the overall NHS drugs bill, they are contributing essential products to the NHS, many of which the larger pharmaceutical companies do not produce due to their concentration on the development of new therapies.

2.  EXECUTIVE SUMMARY

  2.1  EMIG regards NICE as an organisation that plays an important role in evaluating the contribution of medicines. In general, we find that NICE accomplishes its work well. However, EMIG believes it would be more appropriate for NICE to focus on the quality of the healthcare outcome rather than its cost or cost effectiveness.

  2.2  The regulatory burden imposed by a NICE assessment is much greater on the smaller company, such as those represented by EMIG, compared to larger companies, with greater resources.

  2.3  As you will be aware, the recent report by the Office of Fair Trading (OFT) into the PPRS recommended a new system of value-based pricing. Under such a system, we believe it will be difficult to define "value" but also more difficult for smaller companies to illustrate that new products are valuable and to what extent.

  2.4  The implementation of NICE guidelines, or sometimes the lack of implementation, can appear very inconsistent across the country. One good example of this is the "postcode lottery" around IVF treatment, which we evaluate in a case study.

3.  NICE'S EVALUATION PROCESS

  3.1  The NICE appraisal process has improved, in that it is quicker than it used to be, recognising the need for a pragmatic and flexible approach to the assessment of a wide range of health interventions and the need for stakeholder consultation.

  3.2  EMIG members regard NICE as an organisation that plays an important role in evaluating the contribution of medicines. In general, we find that NICE accomplishes its work well. However, EMIG believes it would be more appropriate for NICE to focus on the quality of the healthcare outcome rather than its cost or cost effectiveness. While cost is obviously an important issue for the NHS and Department of Health, NICE should evaluate medicines firstly in terms of efficacy, and then in terms of cost.

  3.3  EMIG members generally produce low to medium-priced products and introduce new chemical entities only once a year at most. It is therefore particularly problematic for EMIG members that NICE concentrates most on evaluating new high-priced molecules, rather than low to medium-priced products. New, more expensive molecules may grab headlines but they are a small proportion of the pharmaceuticals available and effective analysis should be undertaken of all products.

  3.4  NICE states that it bases its recommendations on both clinical evidence and economic evidence. EMIG believes that the NICE thresholds for "cost-effectiveness" are arbitrary and, where there is uncertainty in the process, patients are often denied the benefit of doubt.

4.  REGULATORY BURDEN

  4.1  The regulatory burden imposed by a NICE assessment is also much greater on a small pharmaceutical company than on larger companies, who have in-house teams of health economists that can devote time to illustrating the efficacy of products. Other companies (like EMIG members) simply do not have that kind of resource.

  4.2  As you will be aware, the recent report by the Office of Fair Trading (OFT) into the PPRS recommended a new system of value-based pricing. It will be difficult to define "value", but also more difficult for smaller companies to illustrate that new products are valuable and to what extent.

  4.3  Furthermore, most products launched by small and medium-sized companies are based on incremental changes, such as modifications in delivery mechanisms, which are very important to patients but NICE seldom recognises.

5.  IMPLEMENTATION OF NICE GUIDANCE

  5.1  In spite of considerable efforts by NICE to dedicate resource to working with the NHS and other stakeholders to improve implementation of its guidance, implementation remains slow and patchy, denying patients access to medicines that have been found to be clinically and cost effective.

  5.2  However, there is a long way to go before NICE guidance is firmly embedded into care for patients. Implementation is complex and multi-factorial, involving different organisations and individuals within them.

  5.3  The implementation of NICE Guidelines, or sometimes the lack of implementation, can appear very inconsistent across the country. One good example of this is that in early March, there were numerous reports on the "postcode lottery" of IVF treatment, two years after NICE guidelines recommended three cycles of IVF should be funded on the NHS for eligible couples. This is an example of NICE activity with no delivery, indeed the situation for infertile couples is arguably worse now than it was two years ago. A case study based on this example is attached. We would be happy to provide more information on this report and other data.

  5.4  Inequality in access to medicines is a result, not of NICE systems, but of its interactions. NICE was set up to try to tackle and resolve the issue of inequality in the use of medicines and inequality in the use of clinical procedures and patient pathways and operations. However, it has failed to achieve these objectives, not because of its own internal processes, but because of the way it interacts with the health system.

  5.5  EMIG believes there should be greater funding for all aspects of NICE guidance to ensure guidance is fully implemented, with the appeals process allowing some flexibility for decisions to be changed over time, as appropriate.

6.  CONCLUSION

  6.1  EMIG supports the ABPI's position on the role of NICE. However, thank you again for this opportunity to put across the views of EMIG members on the role NICE has the potential to play and how its work could be improved, particularly in terms of the impact on smaller pharmaceutical companies. If you have any queries about the issues outlined above, please do not hesitate to contact me.

Leslie Galloway

Chairman, EMIG

March 2007