Contents:

CHAPTER 1 EXECUTIVE SUMMARY 4 Scope of the report 4 Key findings 4 CHAPTER 2 BRIEF OVERVIEW OF UK PRICING & REIMBURSEMENT ENVIRONMENT 8 Introduction 8 The UK uses a range of P&R tools to regulate drug costs and usage 9 Potential future changes to the UK P&R system 10 Additional cost containment tools are used in conjunction with P&R tools 11 The PPRS is the primary mechanism used to control drug prices in the UK 12 Introduction to the PPRS 12 Has the PPRS worked? 13 The future of the PPRS system: is it going to be replaced with value-based pricing? 14 A number of bodies and policies impact drug prescription and spending in the UK 15 CHAPTER 3 NICE: ITS ROLE, EFFECTIVENESS AND ISSUES 17 NICE plays a key role in UK drug reimbursement 17 Introduction: what does NICE do? 17 NICE and pharmacoeconomics 19 How does NICE determine which drugs to assess? 20 A number of issues have been raised with NICEs appraisal process prompting several reviews 24 Time delays caused by NICE are a significant issue 26 But are time delays a significant issue for drug developers? 27 The solution: there are two key ways to accelerate drug access through improving NICE 27 Earlier guidance can be provided by starting standard appraisals earlier 28 Using STAs should also help to accelerate drug approvals in the future, although they have had limited success so far 28 NICE assessments have created significant controversy 30 NICE has faced significant controversy over its assessment of oncology and Alzheimers disease drugs 30 NICEs controversial decisions over oncology drugs 30 NICEs guidance over Alzheimers disease drugs has also been highly contentious 31 NICE needs to become more responsive 32 NICE has historically faced significant criticism that it is not responsive enough 32 NICE is becoming increasingly responsive to stakeholder activism and consultations 33 NICE changes its mind following consultation 33 Patient, physician and charity activism can help to change NICE responses 34 NICE needs to use assessment factors other than QALYs to make decisions 35 NICE has an over-reliance on QALYs to the detriment of other assessment factors 35 NICE becomes more flexible by offering risk-sharing agreements: the Velcade story 36 Future changes in the influence of NICE 38 Going forward, there is set to be a greater interaction between NICE and other HTA bodies 38 Potential future changes to NICE function and influence 39 Is there a possible role for NICE in drug pricing? 39 NICE guidance set to continue to guide drug provision decisions, yet the government shows greater flexibility in providing access to cheaper drugs 39 CHAPTER 4 BIBLIOGRAPHY 41 Publications and online articles 41 Resources 46 APPENDICES 47 Appendix A: Glossary of terms 47 List of Figures Figure 1: A range of P&R tools are in use across 5EU markets, with many of these being used in the UK 9 Figure 2: Regional differences in NICE influence 19 Figure 3: NICE published technology appraisal guidance for drugs has focused heavily on oncology drugs to date 21 Figure 4: NICE topic selection process 23 Figure 5: Four key issues that NICE will need to address going forward 26