National Institute for Clinical Excellence (NICE): Is Economic Appraisal Working?

This paper analyses the 32 technology appraisals completed by the National Institute for Clinical Excellence (NICE) in the UK from its establishment to the end of January 2002. It looks at why technologies have been rejected, what has happened to products reviewed at launch, evidence of rationing on cost-effectiveness grounds, and the issues raised for manufacturers and for NICE in the collection and analysis of economic data. It finds that around two-thirds of NICE appraisals have been of pharmaceuticals. Only two ‘first in class’ products have been reviewed at launch, with quite different results. There is clear evidence of the use of cost-effectiveness criteria to restrict or reject technologies, although these are not the only criteria used in decision making. While a number of concerns with the appraisal process raised by manufacturers have been addressed by NICE, and while the Department of Health is currently consulting on changes to the referral system whereby products are selected for review by NICE, manufacturers remain concerned about the timing of referrals in the product life cycle and about the quality and consistency of the reviews of evidence undertaken by academic groups for NICE. Concerns in the National Health Service centre on whether the right technologies are being referred to NICE and also on the opportunity cost of positive NICE recommendations. Given global budget constraints and the difficulty of withdrawing services, the NICE recommendations tend to pre-empt growth money that could be used for more cost-effective purposes. NICE should be asked to look at established technologies that may not be cost effective and whose discontinuance could therefore release resources for other more cost-effective treatments.