NHS watchdog ready to impose hefty fees for approving drugs

Nice’s cost hike could deter start-ups and delay lifesaving treatments

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The watchdog that approves medicines for NHS use is to start charging drugs companies to appraise new products in a controversial move that could delay patient access to lifesaving treatments.

The National Institute for Health and Care Excellence (Nice), which is funded by the health department, plans to introduce the fees next year. It will be the first time it has charged for assessing whether medicines offer value for money, which is a requirement before they can be prescribed by NHS doctors.

According to proposals seen by The Sunday Times, Nice will charge as much as £282,000 per assessment. The fee will be the same for all companies, so global giants such as Glaxo Smith Kline will pay the same as biotech minnows. The plans also reveal the levy will apply even if Nice rejects a new medicine.

“This has the potential to create further inequalities in access to medicines for NHS patients,” said Paul Catchpole, value and access director at the Association of the British Pharmaceutical Industry.

Nice has drawn up the proposals as Jeremy Hunt seeks £22bn in efficiency savings at the health service by 2020. They will revive the debate over the organisation and its role in approving medicines.

It has been praised in some quarters for keeping down the cost of drugs, but has also been criticised for rejecting potentially lifesaving medicines because of their price.

At the moment, Nice funds the appraisals from its own budget, but it has come under extreme pressure from the health department to cut costs. Under the shake-up, the watchdog will “recover the costs associated with technology appraisals and highly specialised technology guidance”.

The proposed charges range from £99,000 to £282,000. If Nice recommends a treatment, the NHS is obliged to begin using it within three months. Recommendations are made on the basis of effectiveness and affordability.

Government figures show that Nice has rejected 15% of new drugs since 2000. The refusal rate is more than double for cancer drugs because they are considered less cost-effective, even though many have the potential to prolong the lives of patients.

Nice said the move towards charging pharma companies was designed to “meet the government’s challenge to drive efficiency and deliver better value”.

Industry figures denounced the decision not to reduce the fees for small drug developers, which often have only one product in development and rely on access to the NHS for survival.

“The cost will be prohibitive,” said Catchpole. “It poses challenges for all companies in creating compelling business cases for launching medicines for smaller populations and for rarer diseases in the UK.”

In the proposals, Nice says it “considered whether a reduced charge for small companies, offset by higher charges for medium and large companies, can be justified and has concluded that it cannot”.

The pharmaceuticals industry is forecast to be among the worst hit by the Brexit vote. Uncertainty over access to the EU-wide approval system for drugs and fears that scientists from across the Channel will be unable to work in Britain have stoked the concern.

“It is another slap in the face for smaller companies,” said one executive at a listed developer. “Why would you come to Britain if this is what you get?”

The measures proposed by Nice will be announced in the government’s Accelerated Access Review, a report into how the NHS can speed up access to innovative drugs. It was due to be published in April, but was delayed until after the EU referendum.

Industry sources said they expected the review to be made public in the next few weeks.

Nice has asked for comments from trade bodies and must seek approval from the Treasury and the health department before the charges can be implemented. “The ambition is to allow greater flexibility, ensure value for money for taxpayers, foster more productive relationships with industry and secure patient access to the very best services, technologies, devices and medicines,” it said yesterday.

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