National Institute for Health and Care Excellence (Miscellaneous Amendments) Regulations 2018

Lord Hunt of Kings Heath Excerpts

Wednesday 1st May 2019 Lords Chamber

Moved by

[Lord Hunt of Kings Heath]

That this House takes note of the National Institute for Health and Care Excellence (Miscellaneous Amendments) Regulations 2018 (SI 2018/1322).

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am glad to lead a short debate about NICE and the introduction of charges. I was NICE’s first Minister and have long taken an interest in the work of the national institute. Overall, it has done a fantastic job; its methodology has been followed by many other countries and, clearly, it has had an impact on judgments about clinical and cost effectiveness.

However, its role has changed over the years. It was brought into being to encourage and speed up adoption of proven, innovative new medicines and treatments because of a concern at the time that the NHS was slow to adopt new treatments and innovations that had been shown to be better than existing treatments and drugs.

To start with, that worked. However, despite the legal requirement on the NHS to implement the technology appraisal decisions of NICE, right from the start it proved remarkably reluctant to do so. As time has gone on and money has been squeezed, NICE has become more a rationer of treatments than a pusher of the introduction of new, innovative products. My concern about charges is frankly not so much to do with the principle of charging, because it follows a well-known model and principle used throughout government endeavours, as with some specific issues, particularly in relation to small companies and the current or future review of NICE’s methodology, which I wanted to raise.

We know from the helpful paper produced by your Lordships’ Secondary Legislation Scrutiny Committee that the government grant to NICE has fallen from £66.4 million in 2013-14 to £51.2 million in 2018-19 and that the Government have argued that NICE needs to identify other sources of funding to enable it to continue its full programme of work.

Obviously, there was consultation. One issue raised in it was the impact of charging on the relationship between NICE and the pharmaceutical industry—but it is important that we recognise that NICE is concerned not just with medicines and the pharmaceutical industry. In the consultation, the potential for conflicts of interest and the public perception of such conflicts were identified as risks. In other words, because the pharmaceutical industry will now be paying for the work being done by NICE, will it have undue influence on the work of NICE? Looking at the robust approach of NICE, I think we can dismiss that fear, but it would be good if the Minister could say something on the record about how we can avoid any perceived conflict of interest.

The second issue I want to raise is the mechanism for reducing the impact on small companies. The original proposal was for a 25% discount but, as a result of concerns raised, the Government decided to provide a subsidy of 75% for small companies. That is welcome and I accept that the Government moved a long way, but the Ethical Medicines Industry Group, which represents a number of small pharmaceutical companies, says that despite that, there is concern among those companies about the impact on them when they have a number of other issues and challenges at the moment, including Brexit and the rebates associated with statutory and voluntary medicines pricing schemes. It thinks that the NICE charges still present a significant cost for small companies and asks the Government to consider whether further measures could be introduced to help mitigate the impact of this on SMEs. One of its suggestions is a fee exemption for companies bringing their first product to market. I think that is an interesting suggestion in terms of encouraging new entrants into the market, which I believe is government policy.

More generally, it is important that, with the extra resources that will be going to NICE, we take the opportunity to ensure that NICE modernises its approach to medicines assessment. When the Government introduced the concept of cost recovery they said the charging would provide a more sustainable model, enabling NICE to flex its capacity in response to the pipeline of technologies that require assessment by NICE. That is welcome, but I want to refer to a briefing I received from a company called AbbVie, which says that it is imperative that NICE fulfils this commitment to adapt and update its methodology and modernise its approach to assessing new technologies.

One example it gives is that we know that medicines are increasingly targeted at smaller patient populations developed through clinical trials. Inevitably, these will embrace patients in smaller numbers. The problem is that regulatory agencies tend to approach this with some caveats. Inevitably, the clinical trials result in smaller datasets and regulatory agencies are certainly demonstrating significant flexibility to approve such medicines, often conditional on that data. However, the approach of health technology assessment bodies such as NICE is often challenged by such datasets, resulting in delays and highlighting a disconnect in the medicines approval pathway. AbbVie-commissioned research shows that medicines, such as those specifically expedited through the regulatory approvals system, due to their addressing areas of high unmet medical need, take longer, on average, to receive subsequent approval from NICE than those medicines that have not been expedited, thereby making the whole process very difficult. The upcoming NICE methodology review, due to commence through 2019-20, provides an opportunity to look at this again and I would be grateful if the Minister would say one or two words about that.

I also raise an issue raised with me by Alexion, a company focused on the development of medicines for rare and ultra-rare diseases. It has concerns about the potential unintended consequences of introducing charges for appraisals without action to address the significant challenges these treatments face in NICE assessments.

In conclusion, I do not object to the principle of charges: I think it is quite proper and the Government’s approach is to be supported. I have concerns about the small companies. I know that the 75% rebate is generous on any count, but any additional costs on those companies is something to be concerned about. The core of my question to the Minister is around the methodology review, to ensure that NICE keeps up to date with developments in science and technology. That is very important.

Turning to my final point, I know that the noble Baroness has taken a great interest in this over the years, representing her old constituency, particularly the life science sector. On the one hand, government policy is about encouraging UK life science and biotech companies to develop, to innovate and to invest in the UK. However, the National Health Service is set up to ensure that those innovations are not adopted by it. Despite a number of welcome government initiatives, they are all what I would call upstream, because the downstream is too difficult. This is a real problem so long as we have an NHS dedicated to stopping innovation. I fear that, despite all the warm words from Ministers that we have heard over the years, the NHS response is to dampen down investment in these new technologies and medicines. My argument is that, post Brexit, we cannot afford for this to happen. One way or another, we have to find a way to get the early adoption of new medicines and new techniques, where they can be shown to do better than the existing ones, and NICE has to play a part in that.

This is really my usual rant about innovation and getting patients access to the fantastic things being developed in the UK. I look forward to the Minister’s response and I beg to move.

[Baroness Jolly (LD)]

My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for giving us the opportunity to ask the Minister some questions. As I expected, it was really interesting, starting with NICE from its inception. Those of us who have been involved with the NHS for some while know the standing that NICE has within the NHS community and how it is changing and adapting to changing circumstances, new technologies and the importance of really exciting new pharma, including pharma for specialised conditions. It also gives us the opportunity to better understand the motivations and reasons behind some of the changes.

As I see it, this SI does two things. It enables NICE to recruit experts from across the UK to its appeal panel, as opposed to individuals only in England. This aspect of the SI appears to represent a sensible change. Secondly, it will allow NICE to charge industry for the cost of making technology appraisals—TAs—and highly specialised technology, or HST, recommendations. I see this aspect of the SI as potentially contentious. How will the anticipated savings from the SI be used? To whom will they be allocated? Will they be used to support growth of the life sciences sector in the UK, or will they just become part of the income stream and then go some way towards the possible privatisation of NICE? Is not the reason for this SI that NICE’s government-funded budget is decreasing? The documents with this SI note that in 2013-14 NICE received £66.4 million in government funding, and that by 2018-19 this had dropped to £51.2 million. I wonder how many other NHS-funded organisations have faced cuts of 23% over five years and quite considerable growth in their business.

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I close by stressing that the Government share the view that we have heard today about the vital importance of NICE’s work. These matters are very important to all of us. With the changes we have made in response to the consultation comments, I am confident that the introduction of charges and the charging regime for NICE recommendations will enable it to continue to be sustainable and develop its recommendations with the same authority, transparency and impartiality that have been the backbone of its world-leading reputation, and that the UK life sciences sector will remain as strong as it has ever been, if not stronger.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the noble Baronesses who have taken part in this short debate. I echo what the noble Baroness, Lady Jolly, said about ensuring that NICE continues with a full work programme, which is very important indeed. I want to reinforce my noble friend Lady Thornton’s vital point about the rare diseases strategy and the issue of access across the UK. Twenty years on, NICE can be congratulated on its work. Remarkably, its first chief executive, Sir Andrew Dillon, is still chief executive. I extend my tribute to him. Not only has he done a great job, but he has also always been accessible to parliamentarians and held open debates, which is much appreciated by Members of your Lordships’ House.

First, I am quite clear that I do not think that there will be a conflict of interest. We can rely completely on the integrity of the NICE progress in relation to that point.

Secondly, uptake and access are fundamental issues. The noble Baroness pointed out that the UK’s position in relation to the speed of regulation is very good, which is pleasing. The problem is that the health technology assessment side is not fast. It is particularly clear from some of NHS England’s interactions with NICE that it is keen to slow down the introduction of many of these new products because, I am afraid, it is concerned about the overall financial package. The problem is that NHS England has no responsibility whatever for UK plc, nor for the health of our life sciences sector; indeed, it has often refused to meet that sector. Given who the chair of NHS England is and given how instinctively sympathetic he is to the issues we are discussing, I hope that we will see a change in attitude. If we really are concerned about the quality of patient care, we must be concerned that access to new medicines and drugs in this country is way behind that in France, Germany and other countries. Most decisions are made in North America, although the pharma industry has other global headquarters. Our reputation for being behind other countries in the adoption of such products is a big problem for future investment.

I have one suggestion. It is very disappointing that, under the original voluntary rebate scheme, the rebate money was essentially paid into the Treasury because the amount to be rebated was discounted in advance. In Scotland, some of that rebate has been used for funding that has been fed back into the Scottish health service to fund new medicines and treatments. Thinking about how we might move on, given that we now have a new rebate scheme, that money should be seen as additional money to be used to encourage the health service. I hope that the Government might think about that in future. The debate has been short but really good.

Motion agreed.