DRUG DEVELOPMENT RESEARCH 71 : 449–456 (2010)

Policy Overview

How Does NICE Value Innovation?Sarah Garner�

National Institute for Health and Clinical Excellence (NICE), London W1 6NA, United Kingdom

Strategy, Management and Health Policy

Enabling

Technology,

Genomics,

Proteomics

Preclinical

Research

Preclinical Development

Toxicology, Formulation

Drug Delivery,

Pharmacokinetics

Clinical Development

Phases I-III

Regulatory, Quality,

Manufacturing

Postmarketing

Phase IV

ABSTRACT No country can afford all the health care interventions that might benefit patients. Demandwill always outstrip available resources, so priorities have to be agreed upon. Such decisions arecontroversial, making it vital that they are underpinned by robust transparent processes and methods. In theUnited Kingdom, this is the responsibility of the National Institute for Health and Clinical Excellence(NICE). In 2009, in response to challenges that NICE was not giving sufficient value to innovation, anindependent enquiry was undertaken by Sir Ian Kennedy. The enquiry raised important questions aboutwhether NICE should only offer incentives for innovation when the benefits are actually seen by theNational Health Service (NHS) as improved outcomes for patients, or whether future, but as yet unrealized,benefits such as the subsequent development of the next generation of drugs should be taken into account.There is a UK government commitment to value-based pricing but questions remain about how this couldvalue innovation. Potential solutions are an increased use of NICE’s ‘‘only in research’’ recommendationsand exploration of novel trial designs. Drug Dev Res 71:449–456, 2010. r 2010 Wiley-Liss, Inc.

Key words: NICE; innovation; health care policy

INTRODUCTION

In the United Kingdom, the National Institute forHealth and Clinical Excellence (NICE) is responsiblefor providing national guidance and setting standardson the promotion of good health and the preventionand treatment of ill health. NICE was establishedin 1999 as part of a broader government initiativeto achieve consistent clinical standards across theNational Health Service (NHS) and to ensure uptakeof cost-effective health care innovations [Departmentof Health, 1998]. It took on responsibility for producingpublic health guidance in 2005 (see Table 1) and willshortly be given responsibility for social care guidance[Department of Health, 2005].

A Direction from the United Kingdom’s Secretaryof State means that the NHS is obliged to make thefunding available for drugs and technologies recom-mended in NICE technology appraisals within 3months, unless directed otherwise [Department ofHealth, 2003]. The right of patient access to these

medicines or technologies is now also part of the NHSConstitution [Department of Health, 2009].

NICE’s technical component of the decision-making paradigm, particularly in the appraisal process,is to examine the incremental cost effectiveness of anew technology. In doing so, NICE asks the question,‘‘how much extra health is this new treatment giving uscompared with standard NHS care and how muchextra are we being asked to pay for those additionalbenefits?’’ NICE does not consider the overall budgetimpact or whether the NHS can ‘‘afford’’ a technology.Nor does NICE have the ability to negotiate on price

DDR

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/ddr.20423

�Correspondence to: Sarah Garner, NICE, MidCity Place,71 High Holborn, London W1 6NA, UK.E-mail: sarah.garner@nice.org.uk

Sarah Garner is 2010–2011 Harkness Fellow in HealthcarePolicy and Practice.

�c 2010 Wiley-Liss, Inc.

or ‘‘patient access schemes’’; it has to use the priceset by the manufacturer. However, companies areincreasingly considering the likely outcome of HTA,e.g., NICE appraisal, when setting the price of a drug.

NICE’s cost-effectiveness approach compares theimpacts of different treatments on a common ‘‘health’’-measuring instrument, the ‘‘quality-adjusted life-year’’(QALY), which expresses the impact in terms of boththe quality and length of life. This allows interventionsfor different purposes to be evaluated on the samebasis. The underlying theoretical principle is to enablethe NHS to ensure that the maximum total amount of‘‘health’’ is obtained for the fixed budget available; thisis also known as ‘‘QALY maximization.’’

Because the NHS has a fixed budget, any moneyspent on a new intervention is not available to spend onother things. As a result, something will have to begiven up either for this patient group or for otherpatient groups, and the benefits it could provide will beforgone (the opportunity cost). If the NHS isconsidering adopting a new intervention, as a mini-mum, it should generally have the equivalent healthbenefits as the things that will be forgone. Decisions ona particular technology for a particular patient grouptherefore need to be made within the context of theimpact on what is provided to others who use thehealth care system.

Obviously the cost effectiveness of every alter-native use of the same money in the NHS cannot bemeasured. It is also rarely known what will be given upin favor of a new treatment because the decisions aremade locally and NICE does not directly substitutenew interventions for old. Therefore, an estimate has tobe made as to what constitutes ‘‘cost-effective’’ andprovides as much health as the technologies that arebeing displaced. Economists call this estimate thethreshold and NICE uses it as a comparison tool toindicate interventions that are generally regarded ascost effective.

When NICE began appraising health technologies,it was not given a threshold by the UK Department of

Health. The independent advisory bodies were allowedto use their judgment to establish a broad level, orrange, within which interventions would normally beregarded as cost-effective. In this event, the incre-mental cost-effectiveness ratios of the interventions‘‘recommended’’ by the advisory bodies, generally fellbelow £30,000 per QALY gained. This experience wassubsequently translated into a decision framework,which guides the committees to normally recommendtreatments falling below £20,000 per QALY, and toconsider recommending them, taking other factors intoaccount, when they fall between £20,000 and £30,000.Above this level, committees would be expected torecommend it infrequently, but they can (and havedone so) in circumstances that justify what generallyinvolves a high cost per QALY. The appraisals methodsguide states ‘‘Above a most plausible ICER of £30,000per QALY gained, the Committee will need to identifyan increasingly stronger case for supporting thetechnology as an effective use of NHS resources.’’ Itis variously argued that the range is too high, displacingmore cost-effective interventions locally, and too low,preventing novel interventions from being madeavailable.

The limitations of the current health economicapproach are well understood and the independentadvisory bodies appointed by NICE take into accountthe uncertainty in the evidence presented and themodeling exercises. The outputs of the economicanalysis are considered by the advisory bodies along-side submissions from stakeholders, clinical evidence,and testimony from patient and clinical experts.

The advisory bodies also consider many otherfactors encapsulated in NICE’s Principles of SocialValue Judgements: Principles for the Development ofNICE Guidance [NICE, 2008a]. This documentdescribes the principles that NICE should follow indesigning the processes it uses to develop its guidanceand in developing individual pieces of guidance. Itdescribes the types of judgment that NICE and itsadvisory bodies should apply when making decisionsabout the effectiveness and cost-effectiveness ofinterventions, especially where such decisions affectthe allocation of NHS resources. This document wasinformed by the deliberations of NICE’s CitizensCouncil and the experiences of the advisory bodies.

INNOVATION

There is no agreed-upon definition of whatconstitutes ‘‘innovation’’ or indeed whether innovationdiffers from invention. The NHS Innovation Centredefines innovation as ‘‘The adoption of new-to-the-organization or new-to-the-NHS technology productsand/or service delivery processes, comprising incremental

TABLE 1. NICE Produces Guidance in Four Areas of Health

Public health: guidance on the promotion of good health and theprevention of ill health for those working in the NHS, localauthorities, and the wider public and voluntary sector

Health technologies: guidance on the use of new and existingmedicines, treatments, and procedures within the NHS

Clinical practice: guidance on the appropriate treatment and care ofpeople with specific diseases and conditions within the NHS

Interventional procedures: guidance on whether procedures used fordiagnosis or treatment are safe enough and work well enough foruse in England, Wales, and Scotland

NICE, National Institute for Health and Clinical Excellence; NHS,National Health Service.

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or disruptive change, and resulting in a significantimprovement in patient outcomes, experiences, safetyand potentially cost effectiveness [Department ofHealth, 2008].’’ An alternative definition is ‘‘Innovationis anything novel which adds value to the end user’’[von Hippel, 2005]. It is also evident that innovationmay be time-limited and innovations can be rapidlysuperseded. There are many aspects of innovation thatmay be relevant to health care technologies. Examplesare illustrated in Figure 1.

Two subtypes of innovation have been described:‘‘discrete’’ innovation producing an entirely newtechnology, and ‘‘continuous’’ consisting of numerousincremental improvements and modifications madeupon the existing technology. Within the health carecontext, these can translate into major improvements inhealth outcomes for particular populations and a seriesof stepwise minor improvements on existing outcomesachieved (Fig. 2).

PERSPECTIVES ON INNOVATION

The issue for health care in the twenty-firstcentury is that discrete innovations are few and farbetween. The sector is generally dependent on smallcontinuous improvements in outcomes with a focus onthe development of ‘‘me-too’’ drugs. Therein lies theproblem for the health care sector: A rapid rise in thecosts of successfully bringing pharmaceuticals tomarket has been documented, driven in part by tightercontrols in the regulatory system designed to protectpatients. This has been the case in particular with

biological agents derived from human tissues that aredesigned to stimulate, block or restore the ability of thebody’s immune system. This has inevitably led to anincrease in the costs of new drugs, although the causesof this increase have been debated.

From an industry perspective, the problem hasbeen further compounded by the introduction of‘‘fourth-hurdle’’ agencies that undertake Health Tech-nology Assessments (HTA). HTA has been defined as‘‘the systematic evaluation of the properties, effects and/or other impacts of health care technology. Its primarypurpose is to provide objective information to supporthealth care decisions and policy making at the local,regional, national, and international levels [Goodman,2004].’’ The need for HTA has been internationallyaccepted: In addition to the safeguards provided by theregulatory systems (safety, efficacy, and quality), healthcare systems require robust information to informdecision making about what works, for whom, underwhich circumstances, how well and at what cost. Therelationship between HTA and ‘‘Comparative Effective-ness Research’’ (CER) has been the subject of debate[Health Affairs, 2010]. CER does not include considera-tions of value [Garner, 2010].

The role of HTA organizations such as NICEvaries between countries, as does the process andmethods they use. Unlike the United Kingdom, insome health care systems HTA is tied directly topricing/reimbursement mechanisms. This means thatthe organization undertaking an HTA may have theopportunity to negotiate a price that it considersappropriate for the technology.

From an HTA perspective, the rising costs ofcontinuous innovation means that society is beingasked to pay increasing amounts for smaller improve-ments in health outcomes. Industry challenge that thisincreasing cost must be paid to ensure future

Fig. 2. Types of health care innovation.

Fig. 1. Aspects of innovation.

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improvements in health and this potential must betaken into account. The issue is further complicated bythe fact that knowledge about a drug develops with useover time.

From a UK government perspective, the phar-maceutical industry is a key player in economic growth;not only do companies provide employment, the sectorbrings in tax revenue for the country. The UKDepartment of Health indicates that continuousinnovation is the key to competitive success in aresearch-based industry and wishes to encourage theresearch, development and supply of innovative treat-ments for the benefit of NHS patients.

HOW DOES NICE VALUE INNOVATION?

The original directions from the Secretary ofState [Department of Health, 2005] are that inexercising its functions, NICE shall have regard to:

* Broad balance of clinical benefits and costs* Degree of clinical need of patients with the

condition or disease under consideration* Any guidance issued to the NHS by the Secretary of

State that is specifically drawn to the attention of theInstitute by the Secretary of State and any guidanceissued by the Secretary of State

* Potential for long-term benefits to the NHS ofinnovation

There were no specific references to innovationin the sections of the green and white papers in 1997and 1998 explaining how NICE would contribute toimproving NHS quality and eliminating the ‘‘postcodelottery’’ [Department of Health, 1997, 1998]. However,it is clear that a prime purpose of NICE was topromote speedy access to new interventions aboutwhich there was good evidence of clinical and costeffectiveness (as well as protecting patients from newinterventions with inadequate evidence of clinical andcost effectiveness).

Parliamentary debates in 1999 about the Orderestablishing NICE mainly show concerns amongopposition members of parliament about what theyclaimed to be NICE’s unacknowledged role as arationing body [Third Standing Committee on Dele-gated Legislation, 1999; Fourth Standing Committee onDelegated Legislation, 1999]. The then minister of stateclaimed that NICE’s role in promoting innovation hadbeen overlooked: ‘‘It will identify those developmentsthat have the greatest potential to improve patient care,and it will help spread those new treatments across theNHS much more quickly than before.’’

The minister also sought to assure some in thepharmaceutical industry who were anxious that NICEmight discourage the uptake of new products or create

bureaucratic obstacles: ‘‘We want successful innova-tion, offering genuine advances to patients at a fair andrealistic price, to be actively promoted and encouraged.Where the evidence is convincing, NICE will doexactly thaty. The pharmaceutical industry is com-mitted to innovation, not for its own sake, but to make areal impact on the lives of patients and their carers.It is committed to the fundamental principle of allgood science, that promising ideas must be testedagainst hard evidence before they can be accepted incommon practice. I do not believe that NICE will bean obstacle to innovation; it will reinforce goodscientific practice.’’

Parliamentary interest in NICE has been con-tinual, and the Health Committee has examined NICEon a number of occasions. In its 2002 report on NICEthe committee discussed perceptions that NICE wastoo close to the pharmaceutical industry [House ofCommon Health Committee, 2002]. These were basedon the contention that the statement in NICE’sframework document on being ‘‘sympathetic to thelonger-term interest of the NHS in encouraginginnovation of good value to patients’’ created a possibletension with its role of securing clinically and cost-effective treatments, a tension possibly heightened bythe fact that the NICE sponsor branch of theDepartment of Health is also responsible for theliaison with the pharmaceutical industry. The industry,through its UK trade body, the Association of theBritish Pharmaceutical Industry (ABPI), took the viewthat these roles were not irreconcilable, suggesting thatif NICE was able to appraise new treatments quicklyand promote access for patients, ‘‘the interests ofindustry would follow on behind, and it would beencouraging innovation.’’

NICE’s methods for technology appraisal [NICE,2008b] specifically state that innovation should betaken into account ‘‘In the circumstances where atechnology has a cost effectiveness estimate in theupper range of what might normally be viewed as costeffective compared with existing treatment: ‘‘Above amost plausible ICER of £20,000 per QALY gained,judgements about the acceptability of the technology asan effective use of NHS resources will specifically takeaccount of the innovative nature of the technology,specifically if the innovation adds demonstrable anddistinctive benefits of a substantial nature which may nothave been adequately captured in the QALY measure.’’

In practice, the intrinsic value of innovation is nota factor considered in isolation. What NICE considersis the value added by the innovation, e.g., a new way ofdelivering a technology that is more acceptable topatients, a better side-effect profile or improvements inhealth benefits in previously poorly managed diseases.

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Innovation also tends to become relevant in circum-stances when other social value issues are also in play,for example, on the ‘‘rule of rescue,’’ or the weight to begiven to the severity of a condition or to the value ofsupporting people nearing the end of their life, i.e.,situations in which advisory bodies have to takeparticularly difficult decisions.

In accordance with the methods guide, theAppraisal Committee’s have in the past, taken intoconsideration such factors, including:

* Severity of the disease (e.g., malignancies, motorneuron disease)

* Children (e.g., human growth hormone, continuoussubcutaneous insulin infusions)

* Clinical innovation (e.g., imatinib, bortezomib,sunitinib)

* End-of-life treatments (e.g., riluzole for motorneuron disease, temozolomide for recurrent malig-nant glioma, sunitinib for advanced renal cellcarcinoma, lenalidomide for the treatment of multi-ple myeloma)

* Occupational exposure (e.g., pemetrexed for malig-nant mesothelioma)

* Cases made by stakeholders that benefits have notbeen adequately captured (e.g., ECT, omalizumabfor severe persistent allergic asthma, natalizumab formultiple sclerosis)

* Avoiding the exclusion of specific patient groups(e.g., secondary prevention of osteoporosis)

There is an inevitable tendency for NICE’s workprogram to reflect challenges to the health care system,either due to a high potential budget impact oftechnologies or controversy over their use. Innovationtends to come at a price premium compared withexisting treatment particularly when the marketingauthorization targets a small potential market. Theresults of economic analysis quite often indicate that anintervention is not within the standard threshold-rangecompared with existing care. The debate has beenparticularly acute when this involves innovative treat-ments that may extend life in circumstances where anindividual has a shortened life expectancy attributableto, for example, a terminal disease.

In January 2009, NICE provided its advisorycommittees with supplementary methodological adviceto be taken into account when appraising treatmentsthat may be life-extending for patients with short lifeexpectancy, and which are licensed for indicationsaffecting small numbers of patients with incurableillnesses [NICE, 2009]. In developing this supplemen-tary advice, the Institute took account of the AppraisalCommittees’ previous decisions, together with therelevant principles in the guide to the use of Social

Value Judgements. It also had regard to the considera-tion given by the Citizens Council in November 2008to the circumstances in which it might be appropriateto support the use of treatments outside the Institute’scost per QALY threshold range [NICE, 2008c]. Inaddition, the Institute has taken account of itsresponsibility to recognize the potential for long termbenefits to the NHS of innovation. The advice onlyapplies to a tightly defined set of circumstances inorder to maintain the general approach to securing anequitable approach to determining the distribution ofthe fixed resources available to the NHS.

NATIONAL DEBATE AROUND INNOVATION

In 2009 a concatenation of events in the UnitedKingdom led to debate around how NICE should valueinnovation. The NHS Next Stage Review ‘‘High-Quality Care for All’’ stressed the importance ofinnovation in every aspect of the delivery of healthcare by the NHS including clinical practice and servicedesign [Department of Health, 2008]. The reviewintroduced a raft of initiatives to create an innovation-supportive infrastructure and culture.

‘‘The Review and Refresh of Bioscience, a Reportto Government’’ [Bioscience Innovation and GrowthTeam, 2009] made a number of proposals forremodeling the whole process of drug developmentand regulation, so that it would meet the needs of theindustry. It acknowledged that NICE had helped tosecure more consistent access for patients to importantdrugs, and that it could become a significant UKcompetitive advantage, providing early health econom-ic assessments for the NHS, allowing companies to gaina more thorough understanding of their likely market(and possible reimbursement).

However, the report also referred to ‘‘theperceived problem for UK industry’’ that NICEappraisals did not operate in a way that supportedinnovation, or uptake and access to medicines andtherefore dissuaded companies from investing in theUnited Kingdom. The reasons for this perceptionechoed the concern of the 2006 Cooksey review aboutdelays in the NICE appraisal process, but in additionclaimed that lack of transparency in NICE’s decisionmaking, particularly NICE’s approach to economicevaluation and the attention it paid to differentperspectives on the value of new medicines, wasrelated to relatively low uptake of cancer medicinesin England. The report noted ‘‘There should be anindependent inquiry to assess NICE’s long term impacton cost, access to, and uptake of, medicines in theUnited Kingdom. There should also be an independentreview of the way in which NICE values medicines sothat the current economic evaluation is complemented

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by clinician, patient and research inputs on the value ofinnovation from their perspectives.’’

By the time of publication of the BioscienceInnovation and Growth Team (BIGT) report, theDepartment of Health and NICE had worked tore-engineer the up-stream topic selection stages fortechnology appraisal in order to enable NICE to beable to issue timely delivery of technology appraisalsguidance as close to possible with the granting ofmarket authorisation. The report of the NHS’s CancerDirector, Professor Mike Richards, on ‘‘Improvingaccess to medicines for NHS patients’’ [Richards,2008] also recognized the case for introducing newarrangements for assessing the increasing numbers ofdrugs that are targeted to treat often relatively smallgroups of patients for a short period of time near theend of their life. The report also called for the need forcomplementary efforts on the part of the pharmaceu-tical industry to be more flexible in its approaches tothe pricing and availability of new drugs within thecontext of negotiations at that time about thePharmaceutical Price Regulation Scheme. The supple-mentary methodological advice to its advisorycommittees on end-of-life medicine was NICE’sresponse to the Richards report’s recommendations[NICE, 2009].

The revised voluntary Pharmaceutical-price Reg-ulation Scheme (PPRS) also proposed a ‘‘value-basedpricing’’ system [Department of Health/ABPI, 2009].Although the final scheme stopped short of a full value-based system, it noted the need for ‘‘cost-effectiveinnovation’’ and that introduced two aspects thatallowed value to be reflected in the price. The firstaspect, ‘‘flexible pricing,’’ allows an increase or decreasein the original list price in light of new evidence or adifferent indication which alters the effective value thatthe medicine offers to NHS patients. The secondaspect, ‘‘patient access schemes,’’ allows companies topropose innovative pricing agreements designed toimprove cost effectiveness and facilitate patient accessto specific drugs (http://www.nice.org.uk/aboutnice/howwework/paslu/patientaccessschemesliaisonunit.jsp).

Finally, in a section on ‘‘uptake and innovation,’’the PPRS lists the Department of Health initiativesaimed at encouraging and rewarding innovation. Thesecover earlier identification of new technologies toimprove the timeliness of NICE guidance; makingimplementation of guidance recommendations a prior-ity for performance management within the NHS, andhighlighting the right to NICE-approved drugs in theNHS Constitution; and new systems for monitoringuptake of guidance in the United Kingdom and makingEU-wide comparisons of uptake of new medicines.They also include commitments to discuss with NICE

industry concerns about the importance of incrementalinnovation in the discovery process, and to explorewhether NICE’s economic perspective should bebroadened to include non NHS costs.

The government published its response to theBIGT report. It concluded that the measures resultingfrom Lord Darzi’s report, changes to the PPRS, theNHS Constitution, and NICE’s own initiatives such asthe current study of value in new innovative healthtechnologies, all contribute to the development of acoherent framework within which to view the impact ofNICE on access to, and uptake of, new medicines[Office of Life Sciences, 2009]. The call for a root andbranch enquiry into NICE, was rejected and deemednot ‘‘the right way of addressing the specific issues.’’

In February 2009 Sir Michael Rawlins, theNICE’s Chairman asked Sir Ian Kennedy to undertakean independent study in response to the BIGT reportrecommendation for a review into the methods NICEuses to measure value. Sir Ian was given the followingterms of reference:

* What approach should be adopted by NICE to ensurethat innovation is properly taken into account whenestablishing the value of new health technologies?

* Should particular forms of value be considered moreimportant than others?

* How should innovation in health technologies bedefined?

* What is the relationship between innovation andvalue?

Sir Ian published his report in July 2009 following48 submissions by stakeholders, a series of workshopshosted by the Wellcome Trust and a meeting of NICE’sCitizen’s Council [Kennedy, 2009]. A series of 25recommendations were made including modification toNICE’s processes and methods. Sir Ian was clear,however, that NICE should only offer incentives forinnovation when it is actually realized. His rationalewas that otherwise the NHS would effectively bepaying twice, that is, up front to support futuredevelopments and in actually purchasing the resultantproducts. Sir Ian noted the focus on NICE’s role in thedemand side but called for the supply side aroundresearch and pricing to be addressed. He also raisedthe question as to whether the final price of thetechnology was the appropriate place to encourageinnovation. Other options should be explored includingtax incentives and the arrangements for patent protec-tion and other features of the intellectual propertyarrangements, such as ‘‘market exclusivity.’’ Finally, SirIan noted the negative impact of the increasing cost ofresearch and post-marketing surveillance.

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Meanwhile the UK Government Office of LifeSciences launched the ‘‘Innovation Blueprint’’ [HMGovernment Office of Life Sciences, 2009], which setout a series of commitments with the aim oftransforming the United Kingdom for the life sciencesindustry:

* An ‘‘Innovation Pass’’ that will give patients fasteraccess to cutting-edge medicines

* Measures to ensure the NHS leads the way in theuptake of groundbreaking and cost-effective medi-cines and technologies

* Accrediting bioscience degrees to ensure graduatesleave with the skills required by industry

* Supporting the formation of an internationallyrecognized UK Life Sciences Super Cluster

CONCLUSIONS

The UK debate around how innovation should bevalued has not reached a conclusion. In the new NHSWhite Paper, ‘‘Equity and excellence: Liberating theNHS’’, the new government has introduced a commit-ment to the introduction of value-based pricing whenthe current PPRS expires in 2013 [Department ofHealth, 2010]. As an interim measure, the UKDepartment of Health is creating a new Cancer DrugFund, which will operate from April 2011.

The focus will inevitably switch to how such avalue-based pricing scheme should operate and whatshould be taken into account when determining‘‘value.’’ The question will remain whether the pricingscheme should, or indeed could, reward ‘‘innovation initself’’ over and above clinically beneficial outcomes.This issue was highlighted in the 2007 Office of FairTrading (OFT) market study report on the PPRS[Office of Fair Trading, 2007]. In practice, the OFTsaid, this would mean that a pricing scheme wouldrecognize, in prices, any drug representing a techno-logical innovation (e.g., by pioneering the pharmaco-logical mechanism) even if it were ultimatelyineffective (or at least no more effective thanalternatives) and subsequent technological leaps wererequired before a clinically useful product could beachievable. The OFT considered that it would not onlybe inefficient for the NHS to spend money onineffective drugs that could be allocated to fund provenmedicines for patients with other conditions, it wouldalso fail to provide transparent, clear investmentincentives to companies. The OFT concluded that, ofthe several approaches to assessing the value of drugsfor the purposes of setting maximum prices, anapproach based on cost effectiveness assessmentoffered the best means of obtaining value for moneyand giving adequate rewards to investment.

One potential solution is the use of NICE’srecommended ‘‘only in research’’ option. In the case ofpromising interventions not yet supported by suffi-ciently robust evidence to justify an unqualifiedrecommendation, the Institute was given the optionof recommending use of technologies ‘‘in the context ofa well-designed programme of research’’ so that furtherresearch could be carried out to see whether thepotential promise of the intervention is actuallyrealized. To date approximately 10% of NICE’srecommendations have been ‘‘only in research’’ (OIR)recommendations of this kind [Dhalla et al., 2009].

In practice, these research recommendationshave been hard to implement. NICE has not beengiven resources to support primary research and thenecessary UK infrastructure is not coordinated towardNICE’s priorities or toward the collection of non-randomized evidence of effectiveness. This issue washighlighted by David Cooksey in his review of publiclyfunded health care research where he recommendedthat ‘‘funding be identified and formal arrangements beestablished between the NHS HTA Programme, NHSSDO Programme and NICE’’ [Cooksey, 2009]. Dis-cussions are ongoing and NICE, through the MedicalResearch Council (MRC), has recently commissionedresearch to support the development of an OIRdecision-making framework to ensure that the OIRoption is used appropriately. Within the context ofsupporting NICE’s new role of the development ofquality standards, ‘‘Equity and excellence’’ has taskedNICE with advising the National Institute for HealthResearch on research priorities.

Capturing real-life effectiveness in the NHS willrequire methodological development into novel trialdesigns [Rawlins, 2009]. NICE has a responsibility toensure that the data used for assessment and decision-making purposes for any technology it evaluates isrobust and fit for the purpose that it is being used.Inferences, particularly those about relative treatmenteffects, will necessarily be more circumspect than thosefrom RCTs. NICE is working with the MRC to ensurethe necessary methodological research is undertaken todevelop techniques for the use of non-RCT data in thedeliberative process.

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