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16-02-2011 | General practice | Article

NICE role critical in drug pricing

Abstract

Centre for Health Economics: Value-based pricing for pharmaceuticals: Its role, specification and prospects in a newly devolved NHS

Health economists say it is essential that the National Institutes for Health and Clinical Excellence (NICE) continues to have a role in the proposed "value-based pricing" (VBP) of pharmaceuticals, due to be introduced by 2014.

The introduction of VBP will mean GPs are responsible for deciding which drugs should be available on the NHS, based on principles that reflect social values and the reality of a budget-constrained NHS. NICE guidance will no longer be mandatory.

In a report analysing the proposals, experts from the University of York say that careful specification of VBP could help to align the incentives for manufacturers, the NHS and individual prescribers. But they add that "maintaining the independence and robustness of evidence based methods of appraisal developed by NICE is fundamental".

According to the report, the primary principle of VBP is that a drug or technology will be of value if the improved health gained exceeds that forgone as other NHS activities are displaced by its additional cost, ie, if it is expected to improve overall health outcomes across the NHS.

For this to succeed, the appraisal process will need to be transparent over how prices can be negotiated, say the researchers, led by Karl Claxton. They recommend a nationally agreed rebate agreement, so that prescribers can be reimbursed at list prices, and national sales volume agreements between the NHS and manufacturers.

Also, once set, it should be possible for VBPs to be renegotiated when cheaper generic medicines and new evidence become available.

The researchers conclude that "there needs to be a recognition that appropriate VBPs depend in part on uncertainty, the value of additional evidence, whether it can be acquired once the technology is in widespread NHS use and the scale of irrecoverable costs committed by the NHS when purchasing the technology".

GP News is an independent clinical news service provided by Springer Healthcare Limited. © Springer Healthcare Ltd; 2011

By Lucy Piper