SUMMARY

  The King's Centre for Risk Management, King's College London is a centre of excellence in research and teaching on risk communication and management topics. The evidence is based on ongoing research within the pharmaceutical policy area where we are closely liasing with regulators, stakeholders, industry, media and academics.

  1.  This response to the Select Committee's inquiry into NICE focuses on two of the seven topics raised namely "why NICE's decisions are increasingly being challenged" and "whether public confidence in the Institute is waning";

  2.  In summary we would like to point out that we live in a post trust society, where regulators and industry are increasingly being questioned by a distrustful public. Public opinion itself is increasingly fragmented into diverging, sometimes antagonistic, views; therefore we will refer in this memorandum to "publics" in the plural form. In such an environment decisions by any government body such as NICE will be questioned. NICE is, in other words, a victim of present trends. The Institute also has not been helped by high profile cases where publics have been refused drug products because of cost grounds set by NICE, which have then been amplified by the media. To make matters worse there is a strong adversarial and somewhat hostile relationship between NICE and a number of the key drug manufacturers.

  3.  What NICE needs to do now is to explain in a clearer fashion to the publics and other stakeholders why rigorous cost-benefit analysis need to be placed on new drug products before they become available in the UK. Secondly, it needs to develop a proactive dialogue with the pharmaceutical industry to avoid the present spat of law-suits and general back-stabbing.

Why NICE's decisions are increasingly being challenged

  4.  Because of a large number of regulatory scandals ranging from BSE to tainted blood in France and foot and mouth disease, we live in a post trust society where the publics no longer trust regulators, policy makers or industry. NICE's (like other Government bodies) decisions are increasingly being challenged as a result of this.

  5.  One of the key components of trust is fairness. At the present time a number of UK publics and stakeholders do not see themselves as treated fairly by NICE. For example, why should their loved ones be refused cancer drugs on cost grounds such as Herceptin, considering the fact that had they been living in other Western nations this product would have been available? Why does NICE's super secret economic formula supposedly differ from that of our poorer neighbours? This is not seen to be fair.

  6.  NICE's decisions make great media stories. There are pictures of the dying granny that has been refused a cancer drug by the drug watchdog NICE, followed by in-depth heartbreaking quotes from the granny's relatives that this is simply unjust. As the public ages and as their needs for expensive drug products increases and as government health spending slows down, the number of media stories surrounding NICE's decisions are bound to increase still further. To complicate matters, NICE does not have many neutral highly trusted third parties to defend it in the media. It is not very popular to come out and defend an economic decision condemning someone's relative to death.

  7.  The public's expectations in the UK health service has increased since Labour came into power. Since 1997, government figures indicate that spending on health is now 90% higher in real terms then it had been in 1997 ensuring that overall UK health spending has gone up as a proportion of GDP from 6.8 to 9%. Under such circumstances the publics are less tolerant to why they cannot be prescribed drugs such as Herceptin. One of the primary reasons to why NICE is receiving so much media attention is a resource problem. The UK government does not have all the funding it needs to get the pharmaceutical products that the public wants. Particularly as the UK public is increasingly ageing overall, and as the treatments that they need are getting more expensive, a larger amount of funding for pharmaceuticals need to be provided.

  8.  It is inherently difficult for any one to explain to the general publics that regulators and institutes need to establish costs per life and cost per life years in determining everything from whether a road should be widened, to whether a train should be fitted with the latest safety technologies to whether a drug should be allowed to come on the market. Many individuals see such cost per life pricing as more or less immoral and therefore it is not surprising that regulators and policy makers do not like publishing formulas of how such a cost per life saved was developed in the first place nor what the actual figure is. NICE's formula is also secret. In addition, statements such as "QALY is best that NICE could come to" come across as being arrogant. The technical nature of cost/benefit analysis is not easy to grasp. In particular people do not necessarily make a clear difference between affordability and value for money. When NICE rejects affordable drugs (eg Exelon or Reminyl) it is essential that the decision be explained in plain language, using simple analogies. Secrecy and perceived arrogance breed distrust (transparency breeds trust).

  9.  Drug companies want to be able to sell any drug they produce at the going market price. They do not want to be dictated to by a government body whether a drug is actually cost effective or not, as this will decide whether one of their drugs can be put on that country's market in the first place, naturally impacting their profit calculations. Drug companies are also concerned that decisions taken by one medical regulator may dictate how other insurance companies and drug regulators in other juristictions will react. For example, the perception in industry circles is that NICE is being used by US insurance companies to decide which drugs their patients will be allowed to take. Such copy-cat decisions will reduce profitability of individual products still further. Hence there is no wonder that drug companies will actively contest specific cost effective decisions taken by NICE.

Whether public confidence in the Institute is waning

  10.  Public confidence in a number of government institutions has declined over time (if measured between prior to the BSE scandal to the present time). NICE was established in 1999, in the aftermath of these destructive regulatory scandals, therefore in a context of already declining trust. NICE could be seen as part of that trend, although this would need to be supported by scientific evidence.

  11.  There are a number of short and medium term measures that can be introduced to address the public confidence issue:

—  NICE should consider establishing an external academic advisory board composed of Europe's leading economists who would advice NICE with regard to the economic formulas that it presently uses to decide whether a drug should be allowed on the market or not. Such an advisory board would deflect any possible flack that NICE may receive for not approving one drug over another.

—  NICE should, in a proactive sense, develop a constructive dialogue with industry and other stakeholders. One possible way to facilitate such a dialogue would be to hold a yearly industry forum where NICE and industry could explore in an off-the-record format regarding decisions taken over the past year and what issues/drug products need specific attention in the following year.

—  NICE should ensure that its arguably controversial economic formula is scientifically peer reviewed.

—  NICE needs to better explain to patient groups, patients, publics, medical bodies and others to why there is a need to calculate the value for money with regard to pharmaceutical products. Such explanations are especially needed to address the crucial "fairness" issue.

—  A sense of fairness implies caring for those vulnerable. Although NICE should constantly reinforce that it is defending the public interest, it should also provide obvious demonstration that special attention will be paid to the need of children and the elderly. Any decision to refuse access to a drug benefiting children or the elderly should be carefully explained in order to avoid sending the wrong messages. NICE should be prepared to face challenging reactions from the publics.

—  In addition to fairness, NICE should improve its communication skills and focus on combined demonstration of humility and competence. This is especially important, given the technical nature of most cost/benefit decisions. One way to go is to develop simple messages in plain language.

Professor Ragnar Lofstedt and Frederic Bouder

King's Centre for Risk Management, King's College London

March 2007