UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 194-ii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

health Committee

TOP-UP FEES

THURSDAY 12 fEBRUARY 2009

PROFESSOR CHRISTOPHER MCCABE and PROFESSOR JAMES RAFTERY

PROFESSOR MIKE RICHARDS, DR FELICITY HARVEY, MS UNA O'BRIEN

and PROFESSOR SIR MICHAEL RAWLINS

Evidence heard in Public Questions 149 - 291

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Health Committee

on Thursday 12 February 2009

Members present

Mr Kevin Barron, in the Chair

Charlotte Atkins

Jim Dowd

Sandra Gidley

Stephen Hesford

Dr Doug Naysmith

Mr Lee Scott

Dr Richard Taylor

________________

Witnesses: Professor Christopher McCabe, Chair in Health Economics at the Leeds Institute of Health Sciences and Director of the Academic Unit of Health Economics, University of Leeds and Professor James Raftery, Professor of Health Technology, University of Southampton, gave evidence.

Q149 Chairman: Good morning. Could I welcome you to what is our second evidence session in our inquiry into top-ups and improving access to medicines? I wonder if, for the record, you could tell us your name and the current position you hold.

Professor McCabe: Christopher McCabe; I am Professor of Health Economics at the University of Leeds.

Professor Raftery: James Raftery, Professor of Health Technology, University of Southampton.

Q150 Chairman: Welcome and thank you for coming along. I have a couple of questions about the Richards Review for both of you. What evidence is there that before the Richards Review significant numbers of people were not able to purchase drugs not funded by the National Health Service? Is this well evidenced?

Professor McCabe: I do not actually think it is well evidenced. There was a large amount of media coverage of a relatively small number of cases. Searching through the media coverage I identified about 18 distinct named cases. When you look into what evidence there is about how many people are going through the individual appeal processes, it is not huge numbers and the average success levels look quite high. None of it is well-evidenced, but what evidence there is out there suggests that it is not a huge problem.

Professor Raftery: I agree with that.

Q151 Chairman: Could you tell me what impact you think the Review will have and the consequent changes to the NICE appraisal process on NHS and patients?

Professor Raftery: The main effect on NICE has been the end of life new supplementary advice to the appraisal committees. It has already led to a drug being approved - Sunitinib - for renal cancer, explicitly under those four conditions.

Professor McCabe: The thing about the Richards Review is that it was a set of recommendations and not actually a statement of a new policy. Those recommendations can be interpreted in a number of different ways and we are probably seeing PCTs interpret them in different ways in the absence of a clear specification of how the department wants them to respond to the Richards Review. At the NICE level clearly the most direct and obvious effect is the implementation of the end of life premium and whilst we have the four very clear criteria for the operation for the end of life premium, what we do not know is how many technologies are going to be able to tick the boxes and therefore qualify for that special consideration. What do we mean by the lack of an equivalent alternative technology? That is not well described yet or well understood. What do we mean by a small study population? Again that is not well-specified. So the impact could be large, it could be small, depending on how the criteria are operationalised.

Q152 Stephen Hesford: On your previous answer about the evidence, if it was not well-evidenced but there was obviously a storm about it, have you researched that media storm? Is there an argument for not doing what we did and not having the Richards Review?

Professor McCabe: We have the Richards Review. A perfectly reasonable response from the Department of Health to the Richards Review would be to shift the guidance statements with regard to how private and public funded healthcare should not be mixed into direction so it has legal force and trusts have removed from them the ability to read it and say, "Thank you very much, I have taken notice of it but actually I am going to mix public and private healthcare within the NHS hospital". If the Department of Health wished to make it a directive then that would protect people from being charged for care which the NHS routinely provides in response to them buying their own drugs. Has that answered your question?

Stephen Hesford: I am not sure it did, but it was an answer.

Q153 Chairman: The Richards Review itself has been described as opening the door to co-payments and a core service National Health Service. Others have described it as a bit of a fudge actually. What do you think about it? Where are you in this debate?

Professor McCabe: I think it could be operationalised so that it was either; what we do not know is how it will be operationalised, how PCTs and how foundation trusts will use the recommendations of the Richards Review to either actively pursue the opportunity to generate an additional revenue stream from top-ups. However, they could look at it and say, "Essentially this is a clear re-statement that we do not mix public and private healthcare in NHS hospitals" and not go there. In the current environment either of those is possible.

Professor Raftery: I think there is a big distinction between top-ups and co-payments. I think co-payments are common in insurance based systems and they seem to have fewer problems with top-ups, particularly if there are a variety of schemes on offer. The thing I thought was really interesting and valuable about the Richards Review was the variety of mixes of public and private that exist in the NHS and that had not been listed comprehensively before, let alone quantified. I think quantifying those is tricky. The Richards Review then clarifies the background and confines the issue to drugs that had been refused by NICE. That is a very small sub-section of that whole complicated area of the mix of public and private, but I think it also clarified the ground rules for public and private.

Q154 Stephen Hesford: Could we have done without it?

Professor Raftery: I think the issue was one of perception and the media. Patients with terminal cancer or other illnesses are unusual in the sense that most cost-effectiveness analysis or cost-benefit analysis do not ever confront the people who are not going to be treated as a result. For instance, if there is a scheme about fixing a traffic problem the decision not to proceed with it may mean that lives are lost there but those people never come and confront the decision maker, whereas in the situation of NICE and end of life patients they are going to challenge the decision and appear on television and make a disproportionate amount of noise. It is hard to disagree that they have a right to do that and that it is a particularly gripping story.

Q155 Chairman: How easy do you think it will be for the National Health Service to separate the NHS costs and the private costs associated with administering additional drug treatments? Is there a danger that under the scheme the NHS will end up effectively subsidising private healthcare? This is an accusation that has been in the media. How do you feel about the separation of costs and whether that accusation would stick?

Professor McCabe: I think it will require a significant amount of data collection. As I understand it, co-NHS contracts are mainly on volume and quality basis; we do not do a great deal of collecting patient level resource use in a way that would enable the NHS to easily start issuing accurate bills to patients or their insurance companies. Therefore if we are to be confident that the NHS is not subsidising private care we will have in some way to create that infrastructure which will be expensive. We only need to look to the administration cost of insurance based healthcare systems to be quite confident that we will have to spend a lot of money. If it is the NHS that spends that money then that will be a form of the NHS subsidising the healthcare of those who are fortunate enough to be able to afford private healthcare. If that is charged onto the patients who access top-ups then that will drive down significantly the proportion of patients who can access top-ups because the costs will exclude them from it. That is a major issue.

Q156 Chairman: Do you agree with that, James?

Professor Raftery: I have two points to make on that. If the numbers are relatively small - which was the discussion we were having earlier - then I think there is less of a problem. A lot does depend on what the numbers are and I think the Richards Review, by encouraging a variety of methods that would reduce the numbers, should enable those numbers to remain small, particularly speeding up the NICE processes, PCTs being more transparent and so on. If they work then I think the numbers will stay small. I agree that the cost per individual patient may be considerable and if it is very ad hoc and occasional then costing them is a new exercise every time.

Q157 Dr Naysmith: Professor McCabe, in answer to the Chairman's first question you implied - if you did not say directly - that the Richards Review, as well as not being a statutory thing that would direct people to take action on it, it was a little bit vague in the recommendations and not very positive. Do you think that was deliberate or do you think it was just written that way?

Professor McCabe: I do not think the Richards Review is vague in its own terms but it did make some principal level recommendations. How you operationalise those recommendations has not subsequently been set out by the Department of Health. That gives the people running the trusts a reasonable amount of space and freedom to interpret them as fits best with their strategic objectives. Whether that was a conscious decision, I think it was quite appropriate for the Richards Review to make principal level recommendations and handing onto the Government to then decide how to operationalise and which ones to operationalise.

Chairman: We will later ask Professor Richards, who is in the room, about this. We are now going to move on to look at NICE thresholds and the end of life technologies.

Q158 Mr Scott: Is the new NICE threshold for end of life treatments merely a public relations exercise or will it lead to patients receiving drugs that they had been denied previously by the National Health Service?

Professor Raftery: I think patients are already going to receive drugs under the end of life arrangements based on the Sunitinib guidance that was issued last week.

Professor McCabe: It will undoubtedly lead to patients qualifying for treatment with drugs that are in that small selection reviewed by NICE. They will receive treatments they would not otherwise have received. Of course other patients are likely to not receive treatments that they would otherwise have received because of the displacement of the opportunity costs of those NICE recommendations.

Q159 Mr Scott: Do you have an estimate of the number of cases that will qualify under the new criteria and how much it will cost to provide these drugs?

Professor Raftery: On a case by case basis it will be quite simple to multiply up the numbers, the maximum costs of the Sunitinib judgment. I think the NICE guidance said that it was a max of 4000 patients and the cost is £20,000 to £30,000 per patient so you can work out the numbers quite easily. How many of those patients would actually take up the drug remains to be seen.

Q160 Sandra Gidley: Professor McCabe, you said that if some people receive the end of life drugs then others would not receive the drugs that they might want. The question I have to ask is, is this decision fair and is if efficient?

Professor McCabe: Fairness is about values. If we are confident that the end of life premium is consistent with society's values then it is fair. Definitionally, when we make decisions based on considerations of fairness, we are departing from a purely efficiency perspective, so we are making a trade-off knowing that we may generate fewer health gains for the population but we are doing it because some of the healthcare we value more highly.

Q161 Sandra Gidley: If I was a patient who can now receive Sunitinib I might think that was fair; if I was a patient who was not receiving some treatment because others were receiving Sunitinib I would not think that was fair at all.

Professor McCabe: That is an issue of whose values should guide the decision, is it not? On any decision which is about allocating resources between two competing groups there are at least two sets of patients who will be affected. There are those who will gain if a positive decision is made and those who will bear the opportunity cost. They have different values probably. If you give preference to patient values then an issue of whether you can identify the patients who bear the opportunity cost becomes crucial and the fact is that we cannot. That is one of the reasons why the values that are recommended for use in these types of public resource allocations decisions are not being valued at the identified patient but the values of society at large and so it is society's values, and if society takes the view that it values the health gain that is generated at the end of life - that is life extending at the end of life - more highly than health gain elsewhere then that is fair.

Q162 Sandra Gidley: I do not think they have been asked to prioritise it in the way you say. We seem to have NICE playing a sort of arms-length god here.

Professor McCabe: I would say that one of the ways in which society expresses its values is through the democratic process and in the absence of evidence to the contrary it is legitimate for values expressed through Parliament and through the minister to guide these sorts of decisions. It would be nice to have more evidence, but in the absence of evidence it is legitimate for Parliament to be the source of value. Indeed, even in the presence of the evidence, it is legitimate for Parliament to be the source of value.

Q163 Sandra Gidley: Professor Raftery, do you agree?

Professor Raftery: If I can go back to your earlier question about the patient who is denied treatment versus the patient who gets Sunitinib, I think there is fundamental asymmetry here. The health service as currently structured is not going to identify the patient who does not get treated. The patient who does not get treated will not know that they were not treated or were treated more slowly because the money was spent elsewhere. That is fundamental asymmetry in terms of looking at the fairness issue.

Q164 Sandra Gidley: Are either of you concerned that the decision to raise the threshold for end of life drugs will set a precedent for raising the threshold for other categories of drugs or treatments? Or do you think that this threshold could possibly do to be raised?

Professor Raftery: I have written some stuff on this and I think there is a danger of a precedent and the wording of the supplementary advice has been very careful not to raise the threshold. It has emphasised that it is looking at a premium on the quality of life of those patients whose life is extended and it is the amount of the premium on the quality of life that matters and the question is whether or not such premium would be justified in order to bring the consideration of any particular drug below the existing thresholds. I think the supplementary advice tries to maintain the existing thresholds and puts the pressure onto the quality of life issue which has a couple of effects. It means that it is possible to research the quality of life of those patients who get treated and that could in turn lead to revisiting the decision to say yes, whereas attempts to research what the threshold should be is a much more difficult question.

Q165 Sandra Gidley: Are there perverse incentives for manufacturers to concentrate research on end of life drugs if they are going to be able to charge a lot more for them?

Professor McCabe: Yes. They are not perverse, they are incentives to do what we want profit maximising companies to do which is to maximise profits. Whether those incentives are perverse from the perspective of what the NHS would like industry to put its money, investment and research and development efforts into, they may not be what we want to do.

Q166 Dr Taylor: Moving onto rarer cancers, "to be licensed for treating a patient population not normally exceeding 7000 new patients each year", where did the figure of 7000 come from? Was it based on evidence? Is it going to be practically easy for it to be used?

Professor McCabe: I think in the final version the 7000 had been changed to "a small population".

Q167 Dr Taylor: Without a figure being put on it.

Professor McCabe: Yes. That kind of gets us off the hook about where 7000 comes from but puts us on another concern which is, what is small? I guess we will observe by a precedent what is small.

Q168 Dr Taylor: If you take Sunitinib as an example, is it just the people with renal cancer who would benefit from this who count as the small population or is it everybody with renal cancer?

Professor McCabe: I think it is the population for which it is indicated. My understanding is that it is the population that meet the criteria in the summary of product characteristics for a specific drug, but I could be wrong.

Professor Raftery: The phrasing is, "the treatment is licensed or otherwise indicated for small patient populations".

Q169 Dr Taylor: Does that mean that it is the appraisal committee who will decide what is a small population?

Professor McCabe: I would not be surprised if that is what happens, given the "otherwise indicated" phrase. The first half was driven by the licensing but the "otherwise indicated" opens that up. I am sure there are very good reasons to do with not all product technologies they consider are in fact drugs and have that licence indication.

Q170 Dr Taylor: Professor McCabe, you have talked a little bit about society's values; does consulting the public on willingness to pay exercises have a valid role? I think you have argued, "In a system where Parliament allocates the budget for the NHS, survey based estimates of society's willingness to pay for health gains are not relevant to establishing the cost effectiveness threshold for resource allocation decisions". I think that was yours.

Professor McCabe: That is most definitely mine and I can say it again if it helps. Willingness to pay tells us how much society, if they are well done, can give us some insight into how much society values healthcare. However, once a budget has been allocated to the NHS, the NHS has a whole load of things (according to the Office of Fair Trading I think it is 25,000 different interventions) it provides and these give varying amount of health per pound spent. When we are faced with decisions such as PCTs and NICE are faced with which is: "Should we bring a new technology into the portfolio of therapies provided?" the question is, what would we give up, what would we exclude in order to pay for it? Hopefully, in a rational world, we will exclude the things that produce less help per pound spent, so have a higher cost per QALY produced with the new technology. That is what the threshold is, it is the estimate of the cost per QALY of the least efficient thing that the NHS currently does and it is the appropriate thing so that we are confident at the margin when we bring the new technology in because it displaces and generates less health. Willingness to pay is to do with how big the budget that is allocated to the NHS should be and it is information that Parliament should be interested in.

Q171 Dr Taylor: I think we are going to come onto the whole issue of rationing in the second part. You suggested that there are not huge numbers and that the average success of the appeals process is quite high. I come from an area where the average success of the appeals process is absolutely nil so I have a false view that this is a much greater problem than many other people see it.

Professor McCabe: I think you have a view based upon the data that you have personally. What I have looked at is the data that is in the Richards Review and the data that is interpretable are for those where we know how many are put in and how many are approved. That data suggests that it is actually not a huge number of people who, having exhausted all available avenues funding in the NHS, are ending up without access to the therapy that their doctor is the best treatment for them. There is a footnote where they say the range they observe is nought to 100% success rate but without the information about whether there were two submissions in the place that gave nought or were there a thousand and they still got nought, it is not possible for me to interpret that.

Q172 Dr Taylor: If PCTs are running toward deficits are they likely to be stricter on these sorts of panels?

Professor McCabe: I think actually the new NHS Constitution is what is going to make PCTs much more strict, and the direction to do with commissioning is in the booklet that has come out the National Prescribing Centre. That sets out very clear processes and if PCTs implement them I think you will find that that will on the one hand protect to a degree the decision making from short term budgetary considerations and so they have to make the decisions they make almost irrespective of budget if they abide by their rules, but I suspect abiding by their rules will push down the success rate.

Q173 Dr Taylor: If the constitution could standardise the process -----

Professor McCabe: That is its objective, yes.

Q174 Dr Naysmith: Professor McCabe, when you were talking about the public's willingness to pay I agree that sometimes the results you get are pretty useless, but do they improve if you ask people to rank the choices they would make?

Professor McCabe: This is purely my own personal experience of working with a couple of PCTs doing exercises with their population where you get people in and you run a workshop. If you ask them to rank treatments for investment it is interesting that over the day they become (a) more consistent and (b) are less likely to say yes to high cost, innovative new technologies because they see things in the context of what has to be sacrificed to pay for it.

Q175 Dr Naysmith: If you are doing that kind of survey you can get more useful information and it may be worthwhile doing.

Professor McCabe: Yes, I strongly believe that those things are very valuable and give very strong insights into what the population you serve want you to spend your money on.

Professor Raftery: There was some recent work published, partly commissioned by NICE, on the willingness to pay and the social value for QALY. The thing that was striking in that was that the results were very sensitive to the methods used which I think was your question. If you have one method you will get one set of answers, if you have another you get a different set of answers and nobody is sure which is the right way to do it. Unfortunately the research project did not plan about how it would reconcile the differences.

Q176 Dr Naysmith: My question really is whether one way of doing it is better than the other.

Professor Raftery: Ranking was one of the methods tested but whether it is better or not, I do not know.

Q177 Dr Naysmith: I do not know what better means in this context. Is it more useful?

Professor Raftery: Maybe.

Q178 Charlotte Atkins: Following on from that, do you think there should be more research to explore public attitudes about funding priorities? We are told by many commentators that the lobbying by patient groups, particularly around new cancer drugs, is distorting healthcare priorities? Do you agree with that?

Professor Raftery: I agree that more research is needed. I think there is a danger of pressure groups particularly focussing on their disease or their client group. There are issues also about the funding that some of those patient groups get from pharmaceutical companies. I know there has been work done on that which has not been published and I know there is an on-going controversy on that. I would argue that there should be complete transparency on that issue. The sort of research I would like to see relates to the question we had earlier about the opportunity costs of NICE saying yes to a particular drug or other intervention. It is that opportunity cost - or the cost per QALY of what is displaced - that should be setting the threshold for the NHS. I think that is the focus of what Chris has written and that is a very different research question. I would argue that the attempts to research the social value of QALY have shown that you get a very wide variety of answers depending on the method you use. I would be in favour of research to identify what that displacement effect is. The problem is that the services that are displaced would be very different in different parts of the country so there is not a single answer.

Q179 Charlotte Atkins: That was the point I was going to make. I think there would be very different solutions in different parts of the country. In my area the whole controversy around use of Herceptin for the early onset of breast cancer had the intervention of the secretary of state to persuade the local Stoke PCT to fund that particular drug. Certainly, when you are talking about a very deprived area, then clearly there was going to be significant displacement of hip replacements, cardiac surgery, smoking cessation and I just wondered whether you considered the present balance with individual cases highlighted by the local press and the national press really is distorting health priorities because I saw the tremendous pressure on a number of local PCTs to make a decision because they were in the headlines.

Professor McCabe: It is strange for an economist to say that it is not an either or, that actually we need both, recognising that we cannot have everything. I think for the electorate to accept the inevitable rationing we make in those decisions they have to be confident that the values that are driving those reflect and are built upon what society values and we do not have the information to allow us to give them that reassurance. When it is this sort of money that we are spending and it is people's health, people can understand that rationing happens - they can accept it, they do it in their every day lives - but they want to know it is consistent and they want to know what the values driving it are. We need that research. It is very difficult but important things often are very difficult. We also need to know where the opportunity cost falls. The thing is, because of devolved budgets of PCTs and the fact that they have different historical patterns of care, their population healthcare needs are different, actually their thresholds are going to be different and are going to be appropriately different. It is not evidence of poor practice and bad decision making if Lincolnshire, which has a much lower funding per head of population, has a much lower threshold than Kensington and Westminster. That is rational and appropriate. Looking at where the opportunity cost falls we would expect to find differences; what we want to know is that those differences are appropriate. Research is necessary at a population level. The approaches in the work by Martin and colleagues at York do give us some insight. The fact that they demonstrate that the threshold within disease areas ranges from around 7000 up to 28,000 gives us insight. If all of this investment in oncology drugs takes place in oncology it is probably okay because it is around that threshold, but if it is paid for out of mental health - which is around the 7000 - then that is not okay, we are reducing population health. There are ways into this. It is difficult stuff but we cannot do one and not the other. I think they serve different purposes and we need to do both.

Q180 Charlotte Atkins: Is the problem that when PCTs are faced with very difficult choices they are getting expert opinions but they have lay people on those bodies who are not immune from the sort of pressures they are getting perhaps from individual patients who are talking about heart rending cases, and then we have the media making it even more difficult for them to say no to a heart rending case; then you might even have public demonstrations as well, as has happened. How difficult is it for PCTs to make rational decisions which do not distort properly considered healthcare priorities, particularly after Professor Raftery's comment which I certainly am concerned about which is the lack of knowledge about the linkages between patient groups and the pharmaceutical companies?

Professor Raftery: I think it is terribly difficult for PCTs. They came on the scene after NICE came into existence and they have been re-organised several times. In terms of their opportunity to be on top of that game it s difficult. I have worked for a health authority for ten years as a health economist so I am pretty familiar with the difficulties they face. One of the things that became very clear to me was that the decisions are often made not at PCT or health authority level, they are often made in the hospital and they are often made by clinicians at speciality level. So there is a big issue about how budgets are allocated within hospitals. If there is an oncology budget then you are likely to have the oncologists making the decisions and the opportunity cost is within oncology. I think they are best placed to make it because using cost effectiveness analysis to make those decisions is a pretty crude tool. There are going to be all the varieties of different patients and different circumstances that need to be taken into account. I would be very much in favour of seeing exploration at least of having that decision making delegated closer and closer to the clinical interface and made by clinicians. The trouble is, at some stage they would prefer not to make it and pass it back up, and the further it is passed up from the direct contact with the patient, the more difficult it gets and the more demanding the information requirements.

Q181 Charlotte Atkins: Is that not happening already with oncologists saying, "I would give you that drug but I know that the local PCT won't fund it"? Does that not happen already?

Professor Raftery: I do not think it does. In my experience clinicians are aware of the opportunity costs of them doing something within their territory but they have no awareness of the opportunity cost of the clinic next door or the other speciality.

Q182 Charlotte Atkins: When you are talking about some of these really high cost drugs, you are saying there obviously opportunity costs within the speciality, does it not go outside that?

Professor Raftery: It depends on how the budgets are structured. PCTs do not, at the moment, decide how much they are going to spend on cancer or on anything else. Those decisions are made largely within the hospital rather than at PCT level. PCT level is a very crude, overall contract for hospital services which is mainly in-patient episodes.

Q183 Charlotte Atkins: If one is talking about an expensive drug and the patient is not an exceptional case, then the oncologist or other specialist might say that they want this particular drug for this particular patient but they do so knowing full well that the PCT policy is not to fund that drug unless it is an exceptional case. Unless the specialist is going to make the case for that patient to be an exception or they make it in such a way that it is not convincing, then of course what they are doing is sidestepping the issue by saying, "I would love you to have that drug but actually the nasty PCT down the road won't give it to you because they are playing God". Is that not unacceptable?

Professor Raftery: I think that is unacceptable and I think it is a version of passing the buck.

Q184 Charlotte Atkins: Absolutely.

Professor Raftery: What I am trying to argue for is some greater coherence between the PCT and the clinicians about what is the size of the budget, what is the scope for efficiency increases in it and what are the priorities.

Q185 Charlotte Atkins: It is not helped when you have consultants who are working with pharmaceutical companies trying to pursue a particular drug.

Professor Raftery: I agree.

Q186 Stephen Hesford: Professor McCabe, you talked about values before and you have spoken about values a number of times and how to quantify them, but we cannot quantify them is basically what you said or it is difficult.

Professor McCabe: It is certainly difficult.

Q187 Stephen Hesford: To the point where we cannot make a decision as to what the value is and then proceed based on that value. Have I understood you correctly?

Professor McCabe: I would say that is quite a strong interpretation. We make decisions about values implicitly all the time. Whenever we choose to say yes to this intervention and not to that there are values in play there. When we gather evidence we will never have the evidence to the level that actually there is not a role for the decision maker; the evidence will never make a decision. However, the more evidence we have, the more guided the decision maker can be by that evidence, the greater the ability of the decision maker to say, "Look, we have gone out to the public and we have asked them to prioritise between treatments which extend life at the end of life and treatments which prevent major morbidity in mid life or critical care facilities at the beginning of life". We have gone out and asked them to trade these things off to gain insight into the relative importance or the relative value that the population attaches to those things. There is a whole list of values or value bearing characteristics that society might want decision makers to take account of. We do not know at the moment how important they are but if decision makers want to be able to be transparent in the rationale for their decisions which are driven by value judgments then they need to get that information; they need to gather evidence so that they can be transparent, explicit and, most desirably I think, consistent so that where they play values in one decision it is given the same weight in the next 200 decisions.

Q188 Stephen Hesford: Are you saying that it is important that a decision maker has a clear understanding of what those values are?

Professor McCabe: I cannot see how you can truly justify a decision if you do not understand the values that you have brought to bear on that decision.

Q189 Stephen Hesford: Given that the NHS is consistently the most popular government institution - it has been for the past 60 years and as far as one can see will be for the next 60 years - that would seem to be a consistent expression of value that the population places in the NHS. What is the problem?

Professor McCabe: I may be interpreting you incorrectly so correct me if I am. I think you are speaking to the idea that the need to prioritise and ration - which is where values come in - is driven by budgetary constraints that do not in fact reflect the value that society attaches to the NHS and therefore if the budget reflects the value that society attaches to the NHS we would not have that problem. Is that what you are saying?

Q190 Stephen Hesford: I am asking you.

Professor McCabe: I cannot answer a question if I am not sure what it means.

Q191 Stephen Hesford: You posed the question that we may be making some decisions which, if we knew what the public valued, we would not be making those decisions.

Professor McCabe: Yes, within the NHS budget. You posed a question back at me which was to do with the NHS as a whole.

Stephen Hesford: So I am asking you, given that we have not one day, not one month, not one year but 60 years of consistent high value and appreciation of what the NHS does, it does not really matter because overall the population thinks the NHS is getting it right.

Q192 Chairman: Overall we are a group of individuals and I think the issue is about the effect on individuals as opposed to others. Maybe we could have this debate later, Stephen.

Professor McCabe: There may not be a problem; I am open to that. However, all the evidence is that there is.

Q193 Chairman: Professor Raftery, I think you suggested the potential for pharmaceutical companies to influence patient groups and then the potential to, if you like, distort healthcare priorities, that work has been done on this but unpublished. Did you say that or words to that effect?

Professor Raftery: I did.

Q194 Chairman: Could you make it any clearer to us who did it, why it is unpublished and whether it will ever see the light of day.

Professor Raftery: I do not have the details to hand but all I would be happy to say is that at a general level I know that some work has been done and there is an on-going controversy among the Association of Medical Research Charities about disclosure of the degree of funding that each charity receives from commercial companies. I think that is the place to look.

Q195 Chairman: If somebody has done some work on this there could be some conclusions. Are you saying that there are conclusions, whatever they are, but they are not published?

Professor Raftery: My understanding is that the percentages are quite low and I would expect them to be quite low, that is the percentage of total funding coming from companies. However, that is only one measure of what the influence might be.

Q196 Dr Naysmith: Can we turn to another area of controversy that bedevils this whole discussion? People often argue that things are done better in other countries and drugs are available in other countries that are not available here. Putting it more succinctly, patient groups, often encouraged by pharmaceutical companies, argue that European countries spend more than the NHS on cancer drugs, for instance. Do you think that this is true, that other European countries spend more on cancer drugs than we do? If so, do you think these countries achieve a better patient outcome as a result of their extra spending?

Professor Raftery: I think there is quite a lot of literature on this within health economics which shows very weak relationships between levels of spending in healthcare systems and healthcare outcomes. The US has the highest level of healthcare spending and some of the worst outcomes. There is not an easy relationship between spend and outcomes; that is the key issue. When you get down to detailed levels of comparison it is very difficult to get accurate data. On cancer, for instance, a lot depends on when patients become known to the healthcare system. I regard the attempts by particularly the cancer charities who argue that cancer is treated better elsewhere with quite a degree of scepticism.

Q197 Dr Naysmith: There is some evidence that there is higher spending in Germany and France on cancer treatments than in this country, although I know that France is trying hard to reduce its costs on its healthcare system. Nonetheless there seems to be reasonable evidence in France and Germany that spend is higher. Do you think the National Health Service should try and match these levels of funding?

Professor Raftery: It is very easy to spend it, it all depends what you are spending it on and whether it has been spent effectively. I think that is the crunch issue from an economics point of view.

Q198 Dr Naysmith: Is it not cost effective?

Professor Raftery: I do not know and I would not want to advocate it unless I knew that it was cost effective otherwise it would be a waste of money.

Q199 Dr Naysmith: Professor McCabe?

Professor McCabe: We cannot argue that historically other European countries have spent more on cancer drugs than we have. However, our funding of healthcare across the board has been lower, that is why we have had this massive expansion - almost doubling - of the NHS budget in the last decade. I think we are now at the European average. Obviously there is a lag between putting the funding up and then seeing the improvement in outcomes, but as James has said the link between level of funding and outcome is not strong. I do not think it is very long ago - six or 12 months ago - that the chief executive of GlaxoSmithKline admitted that their old cancer drugs were not very good. In Europe they bought a lot of them and we bought less so with hindsight maybe we were a bit smarter. We have a whole new batch of new cancer drugs. The underlying science is a lot better so our confidence that they will be as good as they say on the packet is higher, but it is a long way short of absolute because the trials tended to stop early. Given history, some continued caution by the NHS on getting into widespread utilisation of these new cancer therapies would seem reasonable.

Q200 Dr Naysmith: What you have actually said is that we, in this country, have allocated drugs for cancer treatment more cost effectively than some other places have done.

Professor McCabe: Without having seen the figures I cannot say that that is absolutely true but my expectation is that that is likely to be true.

Q201 Dr Naysmith: Turning to the question of risk sharing and the pharmaceutical price regulation scheme, is the proposed risk sharing scheme between the National Health Service and pharmaceutical companies likely to bring about a better deal for the NHS?

Professor McCabe: It depends what we are trying to achieve with these risk sharing schemes. If the objective is to maximise healthcare for the population to the degree that we are negotiating a price discount it is likely to be better than if we just said yes to them at their list price. However, we still need to look and ask the question at the discounted price, are they good value? If it is that we want to learn more about these technologies as we go along then the characteristics of a risk sharing scheme that have that objective would be very different to the characteristics of a risk sharing scheme that is about keeping the price down or the budget impact under control because you are going to have to collect data and analyse it at a population level rather than looking at what happens at the individual patient level. I do not think - I am not an expert on the details of the proposed risk sharing agreements - there is sufficient sophistication and clear specification of the details for us to say that risk sharing is a good think here in the UK or not. They certainly get in the way of pursuing the opportunities that are in value based pricing which were recommended by the OFT because value based pricing would allow us to signal to the pharmaceutical industry what we want them to invest in in the future and discourage them from developing technologies which are unlikely to be good value for money. By going into these risk sharing schemes we give up our ability to signal to them what we would like them to be doing in the longer term; I think that is a price that is little recognised.

Q202 Dr Naysmith: How do you think the department can be persuaded to introduce value based pricing in line with what you have just said?

Professor McCabe: The department has a problem. In its duties, as I understand it, the NHS has a role as an instrument of industrial policy and that is a different objective from the NHS's primary objective which is the health of the population. The department will be interested in going with value based pricing if it can see that it makes good industrial policy sense or for some reason is no longer responsible for industrial policy around the pharmaceutical industry.

Q203 Dr Naysmith: Do you think that gets in the way?

Professor McCabe: It is not in the way, it is about the department's legal duties; it has to deliver both of them and it balances them in a certain way.

Q204 Dr Naysmith: Professor Raftery, do you want to add anything?

Professor Raftery: If I could, yes. You asked about risk sharing schemes and I think we need to learn from the one that we have which is a multiple sclerosis risk sharing scheme. No reports have been issued; reports have been due for several years. There are rumours that it is not a success and there are suggestions that lessons should be learned from it. It seems to me that unless those lessons are learned we will repeat the mistakes.

Q205 Dr Naysmith: Do you think value based pricing would bring significant benefit?

Professor Raftery: Yes I do. I think that it would probably, as envisaged in the Office of Fair Trading report, involve the wider use of cost effectiveness analysis of the sort that NICE already does. I think the PPRS209 which was published in December does not go as far as it might towards value based pricing but it does emphasise both flexible pricing and what they call patient access schemes which are divided between financially based schemes and outcome based schemes and the classification of those. They are very clear that these would be only for drugs that have been refused by NICE so it is quite limited in its scope.

Q206 Dr Naysmith: It is supposed to improve incentives for industry to develop products of high value to patients. Do you think it would do that?

Professor Raftery: Frankly, no; I think it is much too limited. If it is meant to be sending a signal to industry about these being the therapies we want, if it is confined to drugs that have been turned down by NICE then that is sending a very limited signal. I think the direction of travel is in that direction but I think the challenges about assessing the cost effectiveness of the whole range of drugs are considerable but some countries do try.

Q207 Dr Naysmith: Is it worth doing?

Professor Raftery: I think so, yes. From my experience of looking at Australia and New Zealand, they seem to have got better value than we did for some of the drugs.

Q208 Dr Naysmith: One of your academic colleagues, Professor Alan Maynard at York University, has suggested that we would receive more benefits if agreements were back loaded so that manufacturers received low initial prices and then, if the benefits exceeded expectations, they could charge more. Is there any merit in that scheme?

Professor Raftery: I think the flexible pricing in the PPRS applies across the board whereas the patient access and risk sharing schemes are only for the NICE ones. There is scope for that but quite what it will mean and how it will work remains to be seen. The document talks about changes in indications and new evidence which is rather different from what you were suggesting.

Q209 Dr Naysmith: Professor McCabe, do you have any comments on that?

Professor McCabe: No, I agree with what James has said.

Chairman: Could I think both of you very much indeed for coming along this morning and helping us with our inquiry.

Witnesses: Professor Mike Richards CBE, National Clinical director for Cancer, Dr Felicity Harvey, Head of Medicines, Pharmacy and Industry Group, NHS Medical Directorate, Ms Una O'Brien, Director General for Policy and Strategy, Department of Health and Professor Sir Michael Rawlins, Chairman, National Institute for Health and Clinical Excellence (NICE), gave evidence.

Q210 Chairman: Good morning. Could I welcome you to our second evidence session in our inquiry into top-ups and access to medicines? For the record could you give your name and the current position that you hold, please?

Dr Harvey: Dr Felicity Harvey, I am Head of Medicines, Pharmacy and Industry Group within the Department of Health.

Ms O'Brien: I am Una O'Brien; I am the Director General for Policy and Strategy, responsible for taking forward the Government's response to the Richards Review.

Professor Richards: I am Professor Mike Richards; I am National Cancer Director and I led the recent review for the Government.

Professor Sir Michael Rawlins: I am Michael Rawlins, Chairman of NICE.

Q211 Chairman: Welcome once again. We have specific questions for individuals in this particular session and I would like to start with the reason we are here and put a question to Mike Richards. It took you just four months between starting the review and publishing your conclusions. How do you respond to the criticisms that your review was unnecessarily rushed and insufficiently rigorous?

Professor Richards: I believe it was a rigorous review. There were time constraints but those time constraints were set by the fact that there was such a demand for clarity on this issue as quickly as possible. That demand was coming, as you know, as much from parliamentarians as from other sources. We had a fixed time for the review and during that time we engaged with a very large number of people and sought a great deal of evidence. In total we engaged with over 2000 individuals and a lot of organisations during that time and that included focus groups with the public, it included working with patient groups whether they were cancer or non-cancer groups, with charities, with clinicians, with NHS managers, with the pharmaceutical industry, with the insurance industry, with academics and, indeed, with parliamentarians early in the review. I think we sought a great deal of opinion from that. We also undertook a number of specific pieces of work to try to find out the facts, one of those obviously related to the issue you were discussing earlier on this morning about what is the size of the problem.

Q212 Chairman: You think overall, in view of the width and breadth of your review, that the time constraint did not in any way undermine the outcome and the conclusions.

Professor Richards: I do not believe it did, no.

Q213 Chairman: What was the scale of the problem that was identified? For example, how many patients were being denied access to drugs recommended to them by their doctor or even having their NHS care withdrawn because they had chosen to buy additional drugs privately? We hear cases about this in the media, what was it like out there before your review?

Professor Richards: I think the number of individual cases reported in the media is quite small and Professor McCabe earlier on was quoting a figure of 18 and that is about right. Some of those were about patients who had actively been denied NHS care when they chose to pay for a drug privately. The case of Linda O'Boyle, which was one of the central cases that stimulated the setting up of the review, was one such case. That is quite different from the number of cases that are being referred to PCTs for exceptional case funding or individual funding reviews. From the survey we did of PCTs we estimate across the country there are about 15,000 patients per annum who are being referred to those exceptional cases panels. I think it is very important to say that that is not just cancer; in fact three times as many of those were for non-cancer as they were for cancer. Over the course of a year it probably relates to about 50 different drugs and they fall into a number of different categories. There are those drugs which are currently going through a NICE appraisal where NICE has not yet issued a verdict; there are those drugs that will never go to NICE because the request is to use them off-label (that is outside their licence indications); then there are a number where NICE has said no in general to the use of this drug except where the clinician feels there is a truly exceptional circumstance. What we do not know, of course, is how many cases there are where clinicians have tried half a dozen times before to get funding for a particular drug and have been turned down by that PCT so are not continuing to ask. That is extremely difficult to estimate but I think we can say we know what the overall size of the numbers going through those committees is and we know that roughly between two-thirds and three-quarters of those are being accepted and approved by the PCTs. Again, as has already come out this morning, there is variation between PCTs and, according to the Rarer Cancers Forum work, that ranges from 0% to 100%.

Q214 Chairman: You are probably aware of what some witnesses have told us in this inquiry that your recommendations about separating privately funded and NHS funded care are merely a re-statement of existing policy, others have argued that it is a fundamental change for good or ill in terms of the use of the National Health Service. Which view do you think is correct?

Professor Richards: I think that shows that there was confusion about what the previous guidance meant in these circumstances. The previous guidance goes back to 1986 and in fact related to an era where the issue was one of queue jumping within the NHS and had nothing to do with the use of drugs for patients undergoing treatment for cancer, for example. It was a very different circumstance. What we have done is to issue new guidance because there was confusion about what the existing guidance meant in practice and that was leading to the variations in interpretation around the NHS. The fundamental element of the new guidance is that patients should not have their NHS care withdrawn if they decide to pay privately on top of that. The guidance is also then about how it should be handled. I think it is entirely consistent with the previous principle that a patient should not simultaneously be an NHS patient and a private patient. That was true in the 1986 guidance and it is true again in the 2004 guidance.

Q215 Chairman: Did we need a review to change the guidance?

Professor Richards: Absolutely yes because there were those variations in interpretation. There was a great deal of concern amongst the public, amongst clinicians, amongst parliamentarians. Yes, we needed a review to come to some firm conclusions about that.

Chairman: We will pick up on one or two of those issues with yourself and other witnesses. We will move over to Richard now.

Q216 Dr Taylor: I want to look at the practical implications of separating care, and I am looking in particular at Una and at Mike. We have had many concerns about continuity of care, about the consultants who, by principle, will not do anything to do with private work. We had Len Fenwick at one of our sessions saying, in relation to cancer in particular, that it is a little naïve to believe that there would be complete separation; it is simply not possible. Mike, you have just used the words "pay privately on top". Are we not in fact moving some people straight into the private sector and other people who cannot afford are being left in the NHS?

Professor Richards: I gave this extremely careful thought during the course of the review and discussed this with a lot of clinicians and with a lot of different NHS trusts before coming to my conclusions on this. The first thing we were trying to achieve was that there would be fewer occasions when patients would feel the need or wish to pay for drugs and half of this report is about improving access to medicine for NHS patients, and that is its title. Trying to reduce the number is very important. However, what we also heard from all the people we engaged with was that surely some of these drugs should be available to people, that they should be allowed to pay for them if they could not be afforded by the NHS. Comments were coming out earlier this morning about the fact that we do have a mixed economy; people are paying for private physiotherapy and then having a hip replacement on the NHS but those can be kept separate. Indeed, you can have IVF privately and then have your maternity care on the NHS. That is again separate. We considered this carefully and what I set out in my report were four different ways in which separate care can be delivered and delivered safely. You can do it by getting a private hospital - maybe one that is across the road - to deliver that private care. About half of our hospitals have a private facility and the private care could be given in the private wing or facility of that hospital. We have also said that the drugs could be given by a private home healthcare provider and we know that is already happening around the country anyway. The fourth thing we have said is that you can designate an area of an NHS hospital as private for a specific period of time in the same way as you have a patient in an NHS hospital but in the private wing and they need a CT scan you do not have a separate CT scanner for that patient but that CT scanner is being used in private mode for the time the patient is having it. We set those out but very deliberately did not say that there was a one size fits all solution because it will vary across the country. I know, for example, that in the north west they are opting to go for the home help care providers in some parts of the area because they believe the demand is going to be very small for this and they do not want to set up a separate facility; they believe it can be very safely done that way. In the north east they have taken a different approach; they have designated three hospitals - Carlisle, Newcastle and Middlesbrough - that will do this work. They all have a private wing already and they feel that is the safe way that they can manage this. Solutions can be found that are entirely consistent with the principles of separate care.

Ms O'Brien: I think I can re-enforce what Professor Richards has said. It is very clear from the consultation responses we have had that there are some issues about how you deliver this in practice but because we have some worked examples - as Mike has cited - we already know that it will be possible for localities, if they take the time, to work this through. We have asked strategic health authorities in their system oversight role to really get involved and take soundings locally, to work with local providers and local commissions to ensure that arrangements are put in place that are locally sensitive to the delivery of separate care. While I appreciate and am aware of some of the evidence that you were given in your previous session - we have had some of these points raised with us during the consultation on the guidance - we will be taking account of those and working with them through SHAs to make sure there is a transparent system organised and delivered locally.

Q217 Dr Taylor: Going back to Mike, your example of private physio after a hip replacement, I do not think that really comes into the same category as having or not having a drug that has a good chance of extending life. I do not think they are very comparable.

Professor Richards: What I said was that one of the things that was drawn to our attention during the course of the review is that patients have, for a long time, been having some care privately and some care on the NHS; that has always been accepted as long as the two are separate.

Q218 Dr Taylor: Because of the shortage of resources, the shortage of single rooms in hospitals that do not have a private facility, is it going to be acceptable for those rooms to be used for this sort of purpose?

Professor Richards: It would be possible to designate a chemotherapy unit out of hours at five o'clock on a Tuesday afternoon to be the place where you do the private chemotherapy. If that is kept separate then that is perfectly acceptable.

Q219 Dr Taylor: As you know from our talks I am not happy that somehow this is not producing one NHS for those who have that little bit of extra money and a slightly different NHS for those who cannot. Unintentionally do you not think that this has opened the way for further inequity and certainly further inefficiency because of the huge amount of work that is needed to create these separate units?

Professor Richards: I do not believe that that is the case. I think it can be managed perfectly effectively and I think we have set out the different ways in which it can be done. We must remember that we were looking at what the two extremes were. One extreme was that you say to patients, "Sorry, if you have any private care you cannot come to the NHS" and we got a very, very clear message from the public, from patients, from a whole lot of people that that was utterly unacceptable. At the other end of the spectrum we could have gone down a route - we looked at this and rejected it - of saying that effectively the NHS can have a set of basic care that you get free and then on a sort of top-up basis you can pay for extra things on top of that and then there would be a lengthy menu of things you could pay for on the NHS. We rejected that as well because that is not the NHS that I certainly want to see. I think what we have found is a way of enabling people to have that private care while at the same time preserving the fundamental principles of the NHS.

Q220 Dr Taylor: If they have gone to the separate unit or separate facility for this bit of their treatment, how and when do they come back to the NHS?

Professor Richards: They can come back at any time and that has always been the rule. The old wording was "as long as it is not in a single visit". You can always come back. That may have been misunderstood but that is what has been there since 1986.

Q221 Dr Taylor: I quite understand your aim for improving access and speed and battling with the pricing and the drug firms. Was there widespread acceptability among all the people you talked to that this was not causing a two tier system?

Professor Richards: I think there was a very widespread view that we should avoid creating a two tier system. We heard that loud and clear from a lot of different places and when we talked through these options with people they felt that this was the best approach that combined, as I said, the ability for people still to get private drugs if that is what they want and, at the same time, not to change the fundamental principles of the NHS.

Q222 Dr Taylor: The best approach but a compromise and not avoiding the two tier system entirely.

Professor Richards: I believe it has avoided a two tier system because the two are kept separate and people have always had that right to have private care. I think it does avoid that.

Ms O'Brien: The whole thrust of the Government's response to Professor Richard's report is a pro-NHS response. The NHS, as we all know, is a comprehensive and universal service free at the point of use based on clinical need. What Mike's report showed us was that on the outer fringes - a very, very important area of care - there were some issues that had to be addressed about access to medicines. That was one of the most powerful set of recommendations that he brought. I would really like to emphasise that both within the draft guidance and in the chief executive's letter to the NHS we are very, very clear that this was about minimising the circumstances in which people would ever have a need to seek to have drugs provided privately. However, in those circumstances which might remain it is very important for care to be delivered separately. So I think it is about the proportionality of this and also about the thrust of the Government's response. It is not about setting up a parallel private system but actually driven towards reducing the circumstances in which this would be necessary.

Q223 Dr Taylor: Do you think it is actually only the tip of the iceberg? Do you think there are a large number of people who would never consider because they do not have the money at all - the silent voices who would never consider top-ups or increasing their healthcare spending - that we have not even touched?

Ms O'Brien: I am sure that Professor Richards would comment on that, but in general terms what I would say is that the NHS works at the boundaries of science. I think this is very clearly stated in the NHS Constitution. There are always going to be new forms of treatment, new medicines that are becoming available and the pace of the system to keep up with that will always be a challenge on the fringes as that happens in terms of time. The fundamental point connecting back with a question the Chairman asked at the beginning is, are these the same principles applied? In fact they are and it is about adapting the guidance to different and more modern circumstances. However, there is a real continuity about the comprehensive nature of the NHS and about the NHS itself in not charging except where there is parliamentary agreement for doing that.

Q224 Dr Taylor: I think you said you had adapted the principles.

Ms O'Brien: No, I think the principles are true and we have to adapt the guidance as circumstances change and also as pathways of delivering care change over time.

Professor Richards: The fundamental element of the new guidance is that patients should not have their NHS care withdrawn if they choose to pay privately for other treatments. That is something that is very important that is stated. It was one of my key recommendations and one which I was extremely pleased that the secretary of state readily adopted.

Q225 Dr Taylor: One of the witnesses we had at our last session has since sent in an entirely different proposed solution, a central funding mechanism for additional cancer drugs. Money for this could come from top-slicing PCT budgets to the tune of the amount that is spent now by exceptional funding reviews. Is there a real alternative?

Professor Richards: Personally I do not see what the advantage is in that as long as we get clear guidance from NICE as quickly as possible on these drugs so that the NHS will then adopt standardised responses to it. That is what we need to get to and, after all, it is NHS policy to devolve as much responsibility to the front line and therefore not to have large central pots of money.

Q226 Dr Taylor: The advantage of it would be that there would be absolutely equal access for all patients to all the drugs. That is the theoretical advantage.

Professor Richards: Yes, I believe we can achieve the same objectives through the combination of measures that we have set out. One of those is about getting more timely advice from NICE, which is happening anyway. A second is about improving the processes at the PCT level, and that is being taken forward as part of the NHS constitution. There is a firm recommendation from me that PCTs should work together on this. The reason for that is that a PCT may only have to deal with a particular drug once or less often a year; to do a full health technology assessment at an individual PCT level is crazy and therefore it makes very good sense for PCTs to collaborate on this, which they are doing in certain parts of the country. The north east has been leading on this, as has London. There are a whole number of processes that we put in place that will mean that we have far more standardised approaches and far quicker advice on which drugs are good value for money and should therefore be made available on the NHS.

Q227 Chairman: Could I ask you whether you could see a situation where you would have two patients presenting with the same problem in an NHS hospital and one of them goes for chemotherapy which is different to what the other one gets on the basis that they can afford it and that would be acceptable?

Professor Richards: I think that is an absolutely logical conclusion from this report, that there may be people who decide on the basis that they can pay that they will pay, but they will be paying for that element of care privately.

Q228 Chairman: It could be on the same ward in the same hospital.

Professor Richards: With the arrangements we have said it will not be on the same ward, it will be, as I said, either in private facilities or through home help care or through specially designated areas. That is what we have set out, the principle of separation.

Q229 Chairman: Do you agree with that?

Ms O'Brien: I think it is theoretically possible but I would stress again that the thrust and intention of the policy overall is to reduce the circumstances in which that is ever likely to arise. The key thing would be that the circumstances in which someone was choosing to have additional medicine privately ought to be those circumstances where the choice of medicines is for something where it has been decided that it is not cost effective for the NHS to fund. We ought to be in a situation with the new arrangements as they come on board where those circumstances are more and more rare. I think that is the important thing to get the perspective around; it is not about arranging a completely new set of possibilities to open up private provision in the NHS but it is about being clear about people's rights to maintain their access to NHS care and also about implementing the principle of separateness in practice.

Dr Harvey: From our perspective it is also very important that we get NICE appraisals to the NHS in as timely a fashion as possible. As you will be aware there are various things we are doing with NICE to actually ensure that that happens. We will be aiming to get all new drugs with better horizon scanning into the NICE work programme at least 15 months prior to market authorisation. That means that as we go forward we should have the technology appraisals out to the NHS either in draft or final guidance within six months of market authorisation. That does actually start making the problem less of a problem where those drugs are deemed to be clinically and cost effective by NICE looking at the value of drugs to patients.

Q230 Chairman: The issue of the speed of NICE is something that this Committee has called for on more than one occasion.

Professor Richards: It is happening in practice already. Cancer has been the area where we have been piloting the new approaches and I chair the panel for NICE that looks at what cancer drugs will be considered by NICE and already we are seeing a marked shift, so we are beginning that process early.

Q231 Dr Naysmith: Dr Harvey mentioned just now the recommendations of this Committee on previous occasions when we have been looking at NICE; it is good to hear that we are having some influence.

Professor Richards: You always do.

Q232 Dr Naysmith: Thank you. Professor McCabe who was here in the previous session argued in his written submission to us that allowing private top-ups within the NHS would have number of undesirable effects including a substantial increase in the administration cost of the healthcare system. Has anybody made an estimate of the administrative and other costs to the NHS associated with separating care and the recommendations made by Mike?

Ms O'Brien: Can I just be clear on the use of the words "top-up"? In the way that we use the term that is something we are not allowing, ie topping up NHS care or the NHS itself charging. Just to be clear, when we are talking about charging mechanisms what we are actually talking about are those circumstances in which the NHS would charge more for privately provided care. So it is either one or the other; there is no middle position.

Q233 Dr Naysmith: You may find that from the top you are not allowed to use that phrase but I bet you find on the ground many people will be using it.

Ms O'Brien: I appreciate that and I think that is why it has actually caused some degree of confusion, and I think Mike's report has really helped to bring that out. The key thing to say is that there are no detailed estimates of the administrative overheads, if you like, involved in charging but a number of hospitals do this anyway because they have to, for example, charge for oversees patients; it is not at all uncommon in NHS hospitals. So there are methods for doing this; it is not something that has been brought to our attention as a major overhead or a significant cost that would be brought to bear on the NHS as a result of Mike's report. I am confident that we will be going in the direction of reducing the circumstances in which this is necessary; I would not see it as a major problem.

Professor Richards: The principle is there that the NHS should not subsidise the private element of care so yes, we would expect the NHS to charge for the drug, we would expect the NHS to charge for the time of the pharmacist preparing the drug, the time of nurse delivering the drug. If there are costs of administration and billing that should be built in as well so I think we can say those are all elements that we would expect the NHS to take in order to fulfil that principle of not subsidising.

Q234 Dr Naysmith: The point is that no estimate has been made of how extensive this is likely to be.

Professor Richards: As Una has already said, this is already happening. A lot of hospitals have private facilities and hospitals have overseas visitors so I do not think this is something that is beyond the wit of man.

Q235 Dr Naysmith: The other aspect of this which is perhaps a bit worrying is that if the private care treatment was wrong in any way then presumably it will revert back to the National Health Service. Does this pose any kind of problem?

Professor Richards: That has always been the case. Patients who have chosen to go privately for any care, if they then have a problem and present as an emergency to the NHS, the NHS has always taken that on and that has been going for the 60 years of the NHS.

Q236 Dr Naysmith: Is that going to become any more difficult or any more of a problem in the future?

Professor Richards: It is no more or no less of a problem than it has been in the past. It is something we expect to do.

Q237 Dr Naysmith: If some of these patients are being treated in a facility that currently does not exist - which is happening in some places - you are saying that people will not be treated in the same ward as another patient, which means providing in some cases which may not have a private wing or facility at the moment for administering a drug privately. Does that not follow from what you have said?

Professor Richards: What I was equally saying is that we believe that the other measures in my report will reduce the total number of people who are currently choosing to pay privately for their care. There are patients who are paying privately for their care and if we reduce that need because we make more drugs available at an affordable cost to the NHS, then this will not arise.

Q238 Dr Naysmith: There will be a pressure to try to keep the patient in the same institution I am sure. In fact we had the chairman of a trust here a couple of weeks ago saying that he felt it was impossible to separate in practice and where it does occur that will incur expense that was not there before.

Professor Richards: Not to the extent that some of these patients are having these drugs anyway and funding them and when they get complications they can come into the NHS. That is already happening within the NHS and we believe the extra burden of this will be minimal because we believe that the number of patients who are choosing to buy drugs will be a very small number.

Q239 Dr Naysmith: I think Professor Richards has already answered this question but I will ask it anyway and probe it a bit further. Having accepted the principle that there will be this element of separation of care, no matter how it is done, would it not have been simpler to allow the alternative option for purchasing additional treatment such as top-ups in the NHS or voucher schemes? You said this had been considered; could you tell us how seriously it had been considered. You also said there were many noises against it or words to that effect. How thoroughly was it considered and what was the evidence that made you reject it?

Professor Richards: It was considered and in fact the option appraisal is set out in my report. We believed the voucher scheme was the worst of all options in fact largely because it would take money out of the NHS and also if people then went to a private hospital their NHS element would have transferred them into the private sector but they would be paying more for that same element in the private sector than they would in the NHS. So it would be bad for the individual and it would be bad for the NHS. We looked at that and we set out all the different reasons in the report why we rejected that. In terms of the option what might be called the full top-up scenario which is saying that the NHS has a schedule of things that you can get on the NHS but here are all the other things which you might want to pay for, I can tell you there was very little enthusiasm for that amongst the great number of people that I talked to. Again it would be an administrative nightmare. If somebody said, "I want to have a slightly different sort of artificial hip joint" we would look at the scale of charges and we would be billing every patient. Compared with your previous question about billing which I think will be a very, very minor impact on the NHS, if we had gone down that route of saying that there are full scale top-ups for everything it would have been a billing nightmare.

Q240 Dr Naysmith: Are you confident that your solution will end the top-ups debate? I do not just mean by banning the use of the term in official documents.

Professor Richards: I do not have a crystal ball but I think what I can say is that there has been a huge amount of public concern about this, parliamentary concern, media concern and very rapidly after 4 November when the report was published that concern seems to be resolved. Many of my colleagues, including the Royal College of Physicians, have broadly welcomed the findings and most people are saying that it can be done; where there is a will there is a way and this is a good way of going forward.

Q241 Charlotte Atkins: We are now going to move over to talk about the NICE thresholds for end of life treatments. Professor Rawlins, how do you react to criticisms that the reported decision to raise the cost per QALY threshold to £70,000 for end of life treatments demonstrates that NICE decision making favours inefficient and inequitable treatments?

Professor Sir Michael Rawlins: There is a bit of a misconception here. We have not raised the threshold to £70,000; that is the first point to make. We have always stated that we have a threshold range of somewhere between £20,000 and £30,000 per QALY but we have always given our advisory committees latitude to go above and below it. For example, when the effect of a treatment on the quality of life has been inadequately captured by the conventional techniques, as is the case in mesothelioma, the appraisal committee took account of that and said yes at £37,000. When a new innovative treatment comes along with very real and unique benefits like glycemic for chronic myeloid leukemia the appraisal committee accepted that at £34,000 this was a significant benefit. Sometimes there are equities like the blast cell phase of chronic myeloid leukemia where the appraisal committee said yes at £48,000. There has been an incident going up as far as £60,000, a particular treatment for children undergoing renal transplantation. The idea that we have a fixed threshold is wrong. We try to balance equity and efficiency. This is very difficult and in fact there have been discussions amongst political philosophers since the time of Plato and I am afraid I have not resolved this difficulty. You do it all the time in Parliament; that is your job as politicians. It is a balance. David Hunter said I was muddling through elegantly and that is as a kind a description as I will probably ever have. The one bit we do not do in our healthcare system is go to the libertarian approach where it is your responsibility to look after your own healthcare and your family's healthcare. That is the American approach and having seen quite a bit of it over the last few years I hope we never even begin to get near that.

Q242 Charlotte Atkins: Where does this £70,000 come from?

Professor Sir Michael Rawlins: I think a journalist attributed it to me but I do not know where it came from.

Q243 Charlotte Atkins: There seems to be quite a lot of leeway from £30,000 up to £70,000.

Professor Sir Michael Rawlins: We have not got to £70,000.

Q244 Charlotte Atkins: I am interested to hear that. Then we have the issue around so-called rarer cancers and how you define that. We have already heard this morning that the population of 7000 people has now been redefined to mean smaller populations which seems to me even more woolly and more difficult for organisations within the NHS to define it or to make a decision. What are you saying around that?

Professor Sir Michael Rawlins: We did originally say 7000 and the reason why we did it was because there is a very clear distinction between the incidents of the four big common cancers - colon, breast, prostate, lung - and the rest. It is a big jump and it is quite clear it is around 7000. That is why we did it in the first version. However, although that is very clear for cancer, many commentators felt that we should be less restricted than this. Although it is very clear for cancer it is less clear for other conditions and our guidance is not cancer specific, it is all lethal conditions which have the properties and the characteristics that we have specified. People said, "We get what you're getting at but don't box people in with 7000 otherwise you will find 7100 and then what do you do?" So we have given some latitude to our appraisal committees on that. All this recognises that the development costs for treatments for less common conditions are going to be pretty well the same as development costs for common conditions but the market will be smaller and therefore the unit cost is likely to be higher. We recognise that manufacturers may well have to charge more for treatments for less common conditions. I want to be very clear that we are limiting it to small populations; we cannot do this for common lethal conditions. It would cost the health service hundreds of millions of pounds a year.

Q245 Charlotte Atkins: Where would you draw the line? Take oral cancer, for instance, which is about the sixth most common cancer I believe.

Professor Richards: If you put all head and neck cancers together that would probably be about right. If you take oral cancer per se it would be considerably lower down the list.

Q246 Charlotte Atkins: So it is going to be very difficult for people to be able to define what a rarer cancer is.

Professor Richards: I think in cancer terms, as Sir Michael has said, we have four very common cancers and all the rest we can call less common or rare. Equally in the number of deaths that there are from these cancers there is a distinction as well. Oral cancer will undoubtedly be a less common cancer and would undoubtedly come within the small or 7000; I am sure it would be covered by that, as would conditions like myeloma or kidney cancer. All of those would be captured by the small population or 7000.

Q247 Charlotte Atkins: Professor Rawlins, you said that you have not raised the threshold but it does appear that the threshold is rising over time and of course the implications are that this then has a direct effect on PCT budgets. If they are supposed to suddenly fund something which has a higher threshold and that becomes more common, if they still have the same budget - given the present economic situation they are not likely to have big increases in their budgets - what impact does that have in terms of NICE guidance to PCTs?

Professor Sir Michael Rawlins: We have maintained the threshold range for a number of years now. I have always said that this is not an empirically devised number and you have heard from the previous health economists that it is very difficult to know what that should be. People have been asking us whether it should be raised in line with inflation. Health economists are completely divided over this. James Raftery has been published saying that the threshold is too high and should be lowered. In the same edition of the British Medical Journal there was another health economist saying that it was too low and should be increased and Professor Karl Claxton from York thinks it is about right. It is a great uncertainty and ten days ago we were planning to have a meeting which many members of this Committee were going to come to at NICE to talk about this and hear some of the experts but unfortunately the weather was so awful that only Dr Naysmith managed to make it.

Chairman: It is back in the diary I understand, Professor Rawlins.

Q248 Charlotte Atkins: When we look at that clearly any increase in the threshold will have an impact on the normal procedures which PCTs fund.

Professor Sir Michael Rawlins: I think we have to be very careful there because although the previous speakers spoke about the opportunity costs and that the expense here would deprive other patients of care I think it is important to ask Professor Richards about this because in his previous cancer report he pointed out areas where there were very considerable savings to be made in cancer care.

Professor Richards: If you look at the total cancer spend in this country. £4.5 billion out of the roughly £100 billion that we spend on the NHS goes on cancer. The first thing to say is that less than 20% of that is on drugs, less than a billion. That is an important element of cancer spend but a minority. The large element of cancer spend is on in-patient care; that is probably about 50% of the total spend. What we pointed out in the Cancer Reform Strategy is that there are huge opportunities for rationalising that in-patient care which would benefit both patients and the NHS. That is where I would really like commissioners really to target their efforts ensuring that their local provider hospitals are using in-patient beds as effectively as possible. We did some studies looking at individual hospitals around the country, getting experts from overseas to come and work with clinicians and managers in this country and in every one that we went to by the end of the session the people from this country recognised that there was a lot they could do to reduce their in-patient care. We have set up a programme through NHS Improvement which is piloting this across the country; I would just encourage commissioners to get involved with this because we estimate that there is £350 million worth of in-patient care that could be released for other purposes. That is where there is headroom to do a lot of the things that we need to do.

Q249 Chairman: Presumably that would be balanced by primary care.

Professor Richards: That is net saving. Yes, there are things you would have to invest in in order to make that saving, but that is the net saving we believe would be possible.

Dr Harvey: At the moment the NHS spends about 12% of its budget on drugs and, as Professor Richards has said, a lot of the rest of the care is the non-drug care. Through the work that Lord Darzi did in his next stage review one of the recommendations that we have that is currently being implemented is the development of NHS Evidence. One of the issues that came up from a huge amount of evidence both in this country and abroad about barriers to innovation was the fact that there is a lot of information for the NHS, but it was all in different places and was quite difficult to access. NICE provide a lot of it but there is a huge amount of evidence elsewhere. What we will have through NHS Evidence - which will be hosted by NICE and is being developed by NICE - is a single portal for the NHS for patients, commissioners and for clinicians et cetera, one place where all of that evidence can be established. NICE guidelines in terms of its drugs will be on there but also clinical guidelines from NICE and many other places, as well as allowing a place for clinicians that are, for example, looking at new pathways of care to actually have that in one place as well. I do think we need to remember that the drugs are important but it is actually 12% of total spend. That may vary over time but there is actually an awful lot we need to do about care in its totality as Professor Richards has said within the Cancer Reform Strategy.

Q250 Dr Taylor: The previous witnesses rather cast doubt on willingness to pay as a valid role in shaping NICE policy. I was going to ask exactly how you asked that question and whether it took into account opportunity costs although you have rather pooh-poohed the idea that opportunity costs are much of a problem. When you put this to the public survey did you make the point that if you get more of X you have probably got to get less of Y?

Professor Richards: The first point to say is that opportunity costs obviously do matter. What I was trying to do was point out that there are areas where there is very little health gain in patients spending unnecessary time in hospital; it may be the opposite of health gain. Those are the areas that we ought to be looking to decrease our expenditure. That is where I would see that there is the headroom to move forward. We approached the issue of willingness to pay in a number of different ways. First of all, would people want to be allowed to pay and all the evidence there is that four-fifths of the population are saying they would want to be allowed to pay on top of NHS care. Cambridge University Hospital did some work where they asked people how much they would be prepared to pay. Only 120 people responded to this but over 50% of them said they would pay up to £10,000 and 30% of them said they would pay £30,000.

Q251 Dr Taylor: That is Cambridge, mind you.

Professor Richards: I accept that but interestingly my clinical colleagues, the oncologists, did a survey of their own members and asked what happened to people when the PCTs had said no. This is only one survey but around half of those patients were ending up paying themselves. That came as a shock to me that it was at that level. I think we would need to try to replicate that data and see if that is happening and we plan to do that through auditing unfunded drugs in the future. If that is the case it does show that the people who are in this situation themselves are willing to pay. Indeed, that builds on research that was done almost 20 years ago that I was involved in where you ask cancer patients who are in the situation that these patients are, where they are facing life and death, about their willingness to go through intensive treatment - we were not asking them to pay for it at that stage - and is very much higher than if you ask the same question to age match controls in the population. So I think we do know some things about this. Equally, during the course of the review, the message that came through in a number of different ways from a lot of different people was that we do expect the NHS to look after people who are in extreme situations. Whether that is very disabled children, we would not want to put a limit of £30,000 on their care each year; we would spend a lot more than that. If it is premature children we may spend more on that. If it is people who come in following a road traffic collision we would spend more on that. We do believe that there is some particular value for people approaching the end of life. I do not have numbers for that but that was the message that was coming through from the engagement exercise we were involved in.

Q252 Dr Taylor: The end of life drugs, these are technology appraisals so they will be mandatory.

Professor Richards: Yes.

Q253 Dr Taylor: Professor Rawlins probably remembers the very first inquiry we did into NICE which is going back some years, but I shall never forget the people from across the River at St Thomas's when you were talking about implantable defibrillators they said quite clearly they would far rather have more nurses in the A&E Department than the implantable defibrillators. Even though these are mandatory, if a given PCT feels very strongly that it has a much more important priority, what will be the position for that PCT?

Professor Sir Michael Rawlins: They will be in breach of the law. There is a direction from the secretary of state that they should provide them; it is enshrined in the Constitution.

Q254 Dr Naysmith: Following up on that exchange Professor Richards, some people have suggested that instead of increasing expenditure on cancer drugs that only prolong life for a few weeks or a few months, PCTs would be better to spend their money on more cost effective areas such as prevention or services such as palliative care. From what you have said I think you probably do not agree with that.

Professor Richards: Far from it.

Q255 Dr Naysmith: Taken together the money would be better spent on these things.

Professor Richards: My job as National Cancer Director is to maximise the benefit for all people who may now or in the future develop cancer. I certainly want to see investment wherever we have evidence that it is going to be of benefit. We have evidence of cost effectiveness on things like screening programmes. We know those are highly cost effective; we are extending the breast screening programme and the bowel screening programme so we are doing a lot in those areas. I would be very worried if we were not able to do that because those do undoubtedly save lives in the long term. Equally we need to put more investment into encouraging patients to come forward earlier for diagnosis when they do get symptoms because we have heard a lot over the years about the differences between our survival rate and those in Europe. What we know is that it tends to be because of later diagnosis that we have a poor survival rate. I am extremely to make sure there is investment in those areas which tend to be highly cost effective.

Q256 Dr Naysmith: If that is the case and the evidence suggests that, would it not be better to spend this extra money that we are spending on this on earlier diagnosis in this country?

Professor Richards: I think there is always a balance and what I am also saying is that we believe there is an even larger chunk of resource that can be released to do both of these and that is the resource that is currently tied up on in-patient care for cancer patients. That is why we set that out very carefully. The whole of chapter seven of the Cancer Reform Strategy tells people that that is what they can do.

Q257 Dr Naysmith: Yes, but what you are doing is telling somebody else to save the money.

Professor Richards: I am telling the health service and telling local health economists that these are areas where they can relatively simply save a great deal of money for the benefit of patients and, at the same time, that will then release the resource to save lives through earlier diagnosis and to improve the lot of people who are coming towards the end of their lives.

Q258 Dr Naysmith: Given the recession and reduced future funding of the NHS, which is almost inevitable, is it time to alter the NICE legislation to make it responsible for its own budget and for the budgetary consequences of its guidance?

Professor Richards: I have to say from my point of view, particularly with this new scheme that has come in, I believe that working with NICE is working very well. I have had a very fruitful relationship working with NICE over the last nine years since I have been in my post. There are things we have had to improve - the timeliness of NICE we have already talked about - but I believe we have it just about right at the moment.

Professor Sir Michael Rawlins: I think what you are suggesting is that there should be a pot of money.

Q259 Dr Naysmith: There is one country that does it.

Professor Sir Michael Rawlins: I do not know, but it has been suggested before. There are several problems with it actually, one is, how big is the pot? One year you might want a slightly bigger pot than another year. That is one problem; nobody knows how big the pot ought to be. Should it be £100 million or £150 million? We do know that if NICE's advice is taken up completely the consequence in budgetary terms is about £1.5 billion. We are talking, on average over ten years, £150 million. I am not ashamed of that; it is money, in my view, well spent; it is demonstratively clinically cost effective. The other problem with having a pot is that the appraisal committees would be more tuned into the budgetary impact of their decision rather than cost effectiveness.

Q260 Dr Naysmith: Somebody has to take account of it.

Professor Sir Michael Rawlins: Parliament has specifically said in our statutory instruments that we are not to take into account the budgetary impact. One of the dangers of course is towards the end of the financial year, having a discussion about something that really is rather expensive and fairly cost ineffective but it is March, there are £10 million left, let us stop the argument, say yes and go ahead. I have worked with committees for 30 or 40 years now and I know how they behave and if there is an easy way out they will use it.

Q261 Dr Naysmith: We have had a lot of experience of committees here too and we know how they work. PCTs work in a similar sort of way; come about January they are stopping things they were funding or they are funding things they would not otherwise fund.

Professor Sir Michael Rawlins: I think the real problem is that one year it might be £100 million and another year it might be £200 million. It is very difficult to work it out that way.

Dr Harvey: I think the point that Sir Michael makes is very apt. If there was an issue about affordability would NICE actually take a slightly different view from the view it takes now? Our view is that in terms of negotiation, in terms or pricing et cetera, those issues are for government. However, in terms of actually having a view on clinical and cost effectiveness and now, as we have in the PPRS, value, we think it is very important that they have that role, that they do not have a role in negotiation et cetera which probably sits with us. The other issue is that NICE will look at technology appraisals as just one part of their business and, as you know, the NICE work now is extraordinary broad over technology appraisals, over clinical guidelines, interventional procedures and indeed now they are taking on quality standards for the NHS. There certainly is no intention at the moment that we would change the legislative base to give them affordability as well.

Q262 Chairman: Looking at this debate we have just had for the last few minutes, you have obviously looked at comparable systems in terms of access to medicines throughout the world. One of the comparable health services I have come across from personal experience is New Zealand in terms of what happens there and how it is funded overall. They have a Crown entity system which decides where the priorities are and subsidises medicines for the general population. I do not know whether that is in all areas of medical care. Its remit is prioritising which medicines are publicly subsided which they believe is crucial to ensuring that the best health outcomes are obtained from medicines and those outcomes provided the best value for money. I hear what you say about having £10 million and it is heading towards the end of March but that is an accountant's view of society. If you could take the £10 million into next April it does not mean that you have to take a decision. Have you looked at these types of comparable systems?

Professor Sir Michael Rawlins: Yes, and we have a lot of links with the Australian system. They invited me over there last year to celebrate their 60^th anniversary. They have a similar sort of process to our technology appraisals but they do not do anything else. They do not do devices, they do not do diagnostics and they do not do guidelines. It is a very circumscribed field but they do very similar things and they usually come up with very similar conclusions, although not always because pricing is different.

Q263 Chairman: Have you looked at New Zealand?

Professor Richards: Not in detail but I have been to New Zealand to talk about Cancer Matters in the past and the conclusion I came to from talking to both parliamentarians and clinicians in New Zealand is that their regime is rather a lot stricter in terms of availability of drugs than ours is. That was certainly true two or three years ago when I was last there. In the course of my review I have talked to people from Canada, from Italy, from Australia. We engaged through the London School of Hygiene and Tropical Medicine and commissioned a report on what the approaches were in different countries. One of the recommendations I made in my report was that that work should be taken further forward looking in more detail at international comparisons and we will be taking that forward this year.

Q264 Charlotte Atkins: Should there be a different threshold for end of life care or should it be the same as any other threshold?

Professor Sir Michael Rawlins: We use the same threshold. For those treatments that fall into the category we take account of the weighting of the QALY and the appraisal committees have been doing this since the beginning of January. They have made two positive decisions relating to end of life treatment. We make sure that the quality of life weighting they are prepared to accept brings it broadly within the normal threshold range.

Q265 Charlotte Atkins: So it is not at a much higher level.

Professor Sir Michael Rawlins: No. Under some circumstances one might want to double the QALY.

Q266 Charlotte Atkins: That is because we are only talking about a few weeks or months of life.

Professor Sir Michael Rawlins: Exactly, yes.

Q267 Charlotte Atkins: The other issue which this Committee has looked at, as you will know from our 2008 report into NICE, is the whole issue of disinvesting from interventions where they are not effective or cost effective. That was a recommendation we made in 2008; what progress have you made in terms of making sure that that happens?

Professor Sir Michael Rawlins: You may recall our response to you when you made that recommendation. We have actually got a pretty formidable disinvestment programme but it is not labelled as such. Much of the disinvestment opportunities actually arise from our clinical guidelines, not from the technology appraisals. There are not actually in the British National Formulary useless drugs; I would be ashamed if there were because I was Chairman of the Committee on Safety of Medicines for six years. There are some rather old fashioned drugs which people do not use very much now.

Q268 Charlotte Atkins: There are plenty of old fashioned GPs and doctors are there not? When you have old fashioned doctors you may well have old fashioned prescriptions.

Professor Sir Michael Rawlins: Yes, and there will be people using methyldopa for the last 30 years who will be very cross if we take it away because it is effective but has associated side effects for many people. It is really in the clinical guidelines where the opportunities for disinvestment occur. It is not usually so much a question of stopping doing things altogether, it is refocusing and making sure that children with sore throats only get antibiotics under some special circumstances and not as a routine. These are the rather more subtle things. In 2007 we counted there were over 150 disinvestment opportunities from the guidelines and we keep on recycling these to remind people. So we do have disinvestment. We have not forgotten it but it is a bit like the problem with the bed occupancy in the oncology units, that sort of subtlety.

Q269 Charlotte Atkins: You have not been successful in getting doctors on side. If you take something like generic prescribing, for instance, attempts to get doctors to move in that direction have not been particularly fast.

Professor Sir Michael Rawlins: I beg your pardon, we have the highest rates of generic prescribing in Europe.

Q270 Charlotte Atkins: There is still a wide variation between doctors.

Professor Sir Michael Rawlins: Actually there is very little variation. One reason why there is not much variation is the repeat prescribing systems that are computerised which all do it under the generic names so even if the doctor cannot remember the generic names and can only remember the brand name it actually comes out as a generic. We have very, very high rates of generic prescribing in Britain.

Q271 Charlotte Atkins: I am pleased to hear that.

Dr Harvey: There is about 83% to 84% of generic prescribing on prescriptions. Even if there is no generic because it is actually a branded product that has not come of patent, nonetheless the prescriptions are written in the generic form for 83% to 84% of prescriptions and it is the highest in Europe.

Q272 Jim Dowd: Before I go onto the substance of my question, Professor Richards, you mentioned New Zealand and the drugs regime there. When we were in Australia a few years go it was drawn to our attention that they allow direct to patient advertising by the drug companies in New Zealand. I wondered if you knew anything about that and felt that it was a good or a not so good scheme.

Professor Richards: I do not personally support direct to patient advertising. I think that is one of the things that a clinician meeting with a patient can explain what he or she thinks is in the patient's best interests and explain all the pros and cons of different treatments. I personally think that is the right way forward. I do not know about that particular aspect of what might be happening in New Zealand. All I can say is that when I was in New Zealand the very clear impression I was given was that on cancer drugs they were more restrictive than we were.

Professor Sir Michael Rawlins: There is a lot of direct to consumer advertising in the United States of America. It makes for very boring television to keep on seeing different drugs for erectile dysfunction which seem to be the predominant adverts on American television whenever I watch it.

Q273 Jim Dowd: I want to move onto risk sharing schemes. The experience in Sheffield has been described variously but I think the kindest euphemism one can use is "unfortunate". That was the study over the MS drug glatiramer. Is there any future for risk sharing schemes and, if so, what framework should they be conducted under?

Dr Harvey: I think you may be referring to the MS risk sharing scheme which was started back in 2004. There are four drugs involved and that is between government and the manufacturers of those four drugs. That study is continuing.

Q274 Jim Dowd: Sheffield is not going ahead with the second stage of it, is it?

Dr Harvey: It is actually being taken forward through Parexel so actually the study will continue. It continues for ten years; the first set of data has been analysed and is about to be submitted for publication. There are fixed points throughout the ten years where the data will be locked, there will be an analysis and it will be published. The first of those will be published fairly shortly. In terms of the risk schemes going forward, we have referred to them within the PPRS scheme as patient access schemes. They are not likely to be in the same way as the outcome guarantee scheme. The sorts of things we are likely to see are responder schemes, discount schemes et cetera of the sort we saw before the PPRS was agreed for Lucentis and Velcade but those are the sorts of schemes we are likely to see in the future as patient access schemes, so slightly different.

Q275 Jim Dowd: Professor Nicholl, who was leading the scheme in Sheffield, told this Committee that they pulled out because they felt that the structures were weak and it was not going to provide the science they hoped it would. Have you discussed these reservations with them to decide whether they are valid and what actions you need to take to address them?

Dr Harvey: When we re-tendered for this second part of the scheme they in fact did not put in for that tender and therefore we are now working with Parexel as well as the neurologists, the MS Society, MS Trust et cetera and we have a scientific advisory committee that is chaired by Professor Richard Lilford and I think it is the scientific advisory committee that recommends to the funders, trying to ensure that the scientific validity of the study as it moves forward, is as good as it possibly can be. I think we are confident that it is robust. We have a cohort of about 5000 patients who are being studied over the course of this ten year scheme and there is a collection of data from their outcomes being collected. Clearly the first of the publications from that will be submitted for publication imminently. It will depend on how long the peer review journal takes before it is actually published but it will then come out into the public domain.

Q276 Jim Dowd: What about the previous view of this Committee that risk sharing should operate under a system whereby the burden of proof will be on the drug companies to demonstrate that a drug provides adequate benefits?

Dr Harvey: I think that is really more in the sort of risk sharing/patient access schemes that we are moving towards as part of PPRS which are less likely to be of the outcome guarantee scheme. In the case of Velcade, for example, if there is something that is measurable in terms of a responder scheme but, if not, it might be a simple discount scheme as a way of getting access to patients for innovative drugs that could actually have benefits for them. I think the important thing about patient access schemes is that they need to go through an appraisal by NICE in terms of the clinical and cost effectiveness of the scheme and the drug, so it is not just the drug but the drug in the context of the scheme. I think that is going to be very important moving forward.

Q277 Chairman: To what extent does the debate about top-ups obscure the real issue that the NHS has failed to get cheaper drugs available more quickly?

Professor Sir Michael Rawlins: In the sense that we have been too slow at producing guidance I have held my hands up to this Committee before and we have put in train measures to try to make sure that does not happen again. If you like, that is my failure.

Professor Richards: I think all the measures that are being taken through the next stage of the review, through the Cancer Reform Strategy to make sure that NICE guidance and the technology appraisals are done in a more timely fashion is extremely welcome. As I said earlier, we are beginning to see the benefit of that in cancer anyway. That particular problem of there being long delays is likely to become a thing of the past quite soon.

Q278 Chairman: Professor Rawlins, you have had some sharp comments to make in relation to how you feel the system works in terms of the pharmaceutical industry and what we pay. I am not going to ask you to repeat them here today but the real issue is around whether the National Health Service could use its bargaining power with the industry more effectively by becoming a price maker as opposed to a price taker?

Professor Sir Michael Rawlins: The difficulty is that the National Health Service is actually only a very small market; we are roughly about 3% of the world market. People think that because the National Health Service is a monopoly buyer it can be a price maker but it is not, it is a 3% market; it does not have the clout to be able to do that. Many companies have told me privately that sometimes they would rather take the business out of the UK because of the danger that if they sold it at half price in the UK the rest of the world would want half price too. We have to have arrangements that meet their aspirations and our aspirations. The PPRS I think is as good an arrangement as there is in the world.

Q279 Chairman: Do you agree with that, Professor Richards?

Professor Richards: I do, yes. This issue of it being only 3% of the world market keeps coming up and the pharmaceutical industry can decide just not to play ball in that way.

Q280 Dr Naysmith: Professor Richards, does it matter that some European countries spend proportionately more on cancer drugs than the NHS does? We heard in the previous session that there is some doubt about the figures but there seems to be some feeling that it is true that they spend more than we do on some cancer drugs.

Professor Richards: The first point to make is that I think there is clear evidence that overall we spend less on cancer drugs than some European countries. We published that figure - about 60% of the EU average - in the Cancer Reform Strategy. I think the issue we need to get behind is why and does this relate to some drugs and not other drugs and what factors may be behind it? That is the work we want to do this year because I do not think it is as simple as having a yes or a no from NICE. Also, what are the views of clinicians of the relative benefits and the relative harms? Most of these drugs have quite considerable side effects as well as benefits and in general I would say that clinicians in this country are more cautious in their use of the drugs than clinicians elsewhere. I am sure it does not necessarily feel like that to PCTs who are getting all the requests for these drugs, but I can assure you that that is my assessment of it. As you probably know we have done extensive look-backs in this country to see what variation there is within this country. I think we want to build on that and we want to look at a range of products within cancer - although this can go beyond cancer - and those products that were licensed within the last five years, those that are six to nine years old and what about the drugs that have been around for ages where cost is not usually the main limitation. I think we need to look in detail at that to get a clear idea. I think we need to work with clinicians from other countries to find out whether the comparisons are valid because there is always that question of whether we think the comparisons are valid.

Q281 Dr Naysmith: I think you said earlier that there was some element of earlier diagnosis giving better results in some countries.

Professor Richards: We are doing two different international bits of work, one is on the early diagnosis side which we are doing in collaboration with Cancer Research UK and a completely separate one which flows on from my review which is looking at usage of drugs and trying to find out what is, as near as one can get, optimal usage of those drugs.

Ms O'Brien: Perhaps I could add to that on a more general level that this is precisely the question that we need to ask ourselves across all the different dimensions of care in relation to achieving better outcomes for our population. I think it is one of the reasons why Lord Darzi places it so central in his review. As we look forward into 2009 we will be establishing the National Quality Board chaired by the NHS chief executive which really, for the first time, is going to bring together - looking at the comparison and performance of the English NHS with the health systems of other western developed countries - all the differences that there are between them, trying to get behind in more depth and to share systematically the evidence about the bad outcomes and to see what we can do to up our game here. I think that is a really significant development in being honest that we have some really important things to learn and we need to get smarter international comparisons. They are fraught with difficulty which I think the evidence in the session before indicated. We are not necessarily comparing like with like. The point really to make is that we know that this is the next place we have to go.

Q282 Dr Naysmith: Professor Richards, the October 2008 report by the London School of Hygiene and Tropical Medicine which looked at how other countries fund expensive drugs, did that influence your recommendations at all?

Professor Richards: Up to a point. What it did show was that there are different approaches both for the assessment of these drugs and there are differences in which drugs are available. What it showed was that we needed to go even further beneath that to understand these variations and that we also needed to look quite separately at the data on drug utilisation per thousand population in these countries and that is what we will be doing. I think it is a useful foundation for the work that we are going to be doing this year looking at variations in drugs.

Q283 Dr Naysmith: I think that report showed that some countries have found it difficult to separate public and private healthcare. What makes you think that the NHS will be able to succeed where other countries have failed?

Professor Richards: They are completely different systems of healthcare; they are radically different. However, we will look at all of those things in terms of whether we are really counting like for like. That is the important point. If we are going to come out with any statements about where we are on an international league table we do need to know whether that is a fair comparison or not.

Q284 Dr Taylor: Right at the end we are coming to the dreaded word, the "R" word - rationing. I think everybody agrees with the increasing longevity and increasing possibilities for treatment there is no way the NHS is going to be able to go on affording absolutely everything. NICE is the first excellent beginning of healthcare rationing in a particularly limited field really. I am delighted to have two top officials from the department here because they can tell me why an adjournment debate I tried to have some months ago entitled "NHS Rationing" was changed to "NHS Prioritisation". Why will the Government not face up to the fact that we have to start having an open discussion across the whole country about what the NHS must afford and what is possibly going to fall off the bottom? One of our first witnesses said that there are 25,000 interventions in the NHS and obviously some of those are of enormous value, cost effective, very low figures. Why can we not start an open debate on what perhaps we should not be affording because we cannot afford everything? Can we use the word "rationing"?

Dr Harvey: I cannot comment on that because I do not know about the background. However, I would say that having NICE as an organisation is extremely valuable for the NHS because, as you know, their remit is much, much wider than just the technology appraisals and I think, as I said earlier, the fact that they now have NHS Evidence which they are developing as well to look across the piece in terms of the best evidence there is that clinicians, commissioners and indeed the patients will be able to access I think is very important. As you know, NICE does not just look at clinical care and technology appraisals, it also looks at public health. What we need to be doing is looking right the way across public health disease prevention as well as the treatments for people who actually have active disease. Looking at the clinical and cost effectiveness of those within the NHS budget which is sizeable - it is about £96 billion this year - is, we feel, the way we need to go. Also, as the Chairman raised earlier, there is the issue of disinvestment. Where we think there is care that is actually outmoded and there are better ways that care can be provided, then that needs to be taken forward. The other thing we do need to remember is that there is a lot of emphasis on new drugs that come forward which are an added cost to the NHS. I think we must remember that actually a number of these innovations will actually change a pathway of care and change a pathway of care quite dramatically which can then use less bed days which can actually make a patient pathway very different, we be able to move secondary or tertiary care into the community. All of those things are things that we need to be looking at together in terms of how care is provided.

Ms O'Brien: There is little that I would add to what Felicity has said. I think these things come back fundamentally to what is the Government's policy towards the NHS as a whole and how do we best preserve the principles and the universality of the NHS in the context of the fast moving developments in technology. I would re-enforce what Felicity said about NICE. This is not really so much about rationing as about getting smarter and better at disinvesting and stopping doing things that are ineffective and finding and harnessing those technologies that will enable people to stay healthier for longer. Many things that on the face of it appear expensive are in fact effective in terms of maintaining people's health in the longer run. I think it is about our purpose and our overall objectives. How do we find a way through this? I was very struck by the comments that Bill Gates made at Davros when he talked about the three drivers for economic development over the next ten to 15 years would be medicine, technology and software and really they are three things that come together very powerfully in relation to health systems. It is not just we who are faced with this challenge, all health systems are looking at ways in which they can harness technology in order to use the resources most effectively. I do not see it really as a situation where the resources are all allocated and now we are going to have to rush them back in order for them to be affordable, it is actually about how we can use innovation in order to get more effective use of our resources and better health at the same time.

Q285 Dr Taylor: Whatever you call it, how should the public be involved in this? I know NICE has their citizen's panel but that is relatively small in the amount it can do. How should a widespread public debate be stimulated? Or should it be?

Ms O'Brien: Obviously Professor Rawlins can speak about the approach that has been developed by NICE which, particularly in relation to patient and public involvement, I think is absolutely showing the way not only for organisations similar to NICE elsewhere in the world but actually showing to the NHS just how you can really start to involve public and patients. The key development in terms of public involvement now is very much focussed on PCTs and the role of PCTs in facing out to their local population. We have clearly set a course there with the approach of world class commissioning and we have a long we to go. However, I think the absolute importance of the PCT linked with, for example, local authorities and other partners, is to be much more engaged with and facing up to the needs of the local population and really listening to what people want and need and engaging them in that debate. It is the direction of policy even though we have much to do in order to improve the practice. We have some really great PCTs on that front and others who have a way to go.

Professor Sir Michael Rawlins: I have never liked the "rationing" word because I am old enough to remember ration books and sweet rationing and things like that, but if you want to use it let us call it rationing. People generally do now understand that rationing in healthcare is necessary, that there is not a bottomless pit of money. It is not a matter of whether we do it but how we do it. How do we do it fairly? I think we need to learn more how to do it. We have our citizens' council and that is there to help us with the social value judgments that you were talking about earlier. The great fault with it is that it is only 30 people and they are drawn roughly at random but do they really reflect everybody's views? I am not a social scientist but we do need to develop better mechanisms and methods. I feel that things placed on the internet might well have great possibilities for the future. I am struggling to think of a way and nobody has really come up with a sensible one. The only thing I can say about the citizens' council is that we put the reports out for consultation before they come to the board and interestingly enough nobody has really criticised any of their reports; there has been no major hoo-hah about what they have said.

Q286 Dr Taylor: Surely it has to be a national debate because if it is left to PCTs then we really will be down to postcode differences.

Professor Sir Michael Rawlins: How do we have a national debate? It is not easy. It is the Daily Mail arguing with the Telegraph, with the Guardian, the Times and the Financial Times. That is what happens.

Q287 Dr Taylor: At the risk or raising a complete red herring, it is patient and public involvement in health which has been ruined?

Professor Richards: During the course of the very large scale engagement exercise that I was engaged with for my review we did hear a very large majority of people say that they did accept there is a limit. That was the way it was being phrased by the public. Not everybody; there were some people who thought we should pay for everything. Wherever we went there were one or two saying that, but by far the majority said that they did accept there is a limit. I think also people were saying that they do expect the NHS to get rid of any waste as one of its first priorities. In its prioritisation I would prioritise getting rid of the waste and driving that efficiency and there is still a lot more we can and should do on that.

Q288 Jim Dowd: On the 3% figure for the drugs use in the UK, is that by volume or by value?

Dr Harvey: I think so but we will have to come back to you. We are 3% of the global market for pharmaceuticals.

Q289 Jim Dowd: Also we are only less than 0.1% of the world's population.

Dr Harvey: We do have 8.5% of global R&D pharmaceuticals. I have just been told it is 3% by value.

Q290 Jim Dowd: How has that figure changed over time?

Dr Harvey: It has stayed roughly the same. Some people say 3%, some say it is 3.5%. It is in the region of 3% to 3.5% and it has stayed, as far as we know, roughly about the same. I think that is why we cannot be a price maker.

Q291 Chairman: Professor Richards, is it true that we all accept there are limits in health service expenditure until we are ill? The real issue is not about the generality of the public because they are not the ones who are batting around between the Daily Telegraph and other tabloid newspapers and broadsheets. That is the hard reality of it. Looking at it from the base of the community is not looking at it from the base of the individual concerned. That is the problem you have and we have in coming to decisions, is it not?

Professor Richards: You have to remember the engagement exercise that we are going through, yes we did engage with the public through focus groups but we also engaged with a lot of patient groups and even within those patient groups there was an acceptance by and large that there is a limit. I am not saying that everybody accepted that but there was an acceptance by and large. The difficulty in trying to find out from large scale polls of the public is that it does depend how you frame the question. Just before my review started there were different papers that conducted different reviews and came to diametrically different results, but that was dependent on how the question was framed.

Professor Sir Michael Rawlins: I think one can easily underestimate people's generosities. Years ago when the beta interferon thing was happening I was asked to go and speak to the Multiple Sclerosis Society in Newcastle. I went in fear and trepidation and they were very kind. Afterwards I found myself ringed by four or five men in wheelchairs who said, "We want to talk to you". I thought, "Oh dear" and then they said, "We realise there is a problem about this drug. We want you to know that we all think that the kids over there who are still walking should have priority, not us." I thought that was an extraordinary statement.

Chairman: That is a nice statement to finish on. Could I thank all four of you for coming along this morning and helping us with this evidence session.