This is Module 2.3.2, British Criteria for Cancer Drug Payment. I'm Stephen Parente, Professor, Department of Finance. In our prior lesson, we talked about the qualities of said life here saved and how that was used as a criteria in the UK, as well as the US system. In this module, we're going to be talking about NICE and, specifically, this National Institute for Clinical Excellence. Originally it started out in 1999. Its name actually has changed a little bit, but everyone keeps on calling it NICE as it goes on, for example, in 2005 it gained a few extra words, National Institute for Health and Clinical Excellence. So, the idea behind NICE is that it's a quasi governmental organization that is funded by the UK government. That basically looks at whether or not, not just pharmacological procedures, but also procedures, devices, diagnostic technologies are appropriate for payment within the NHS, the National Health Service of the British of the UK. Now in 2006, there was a new process introduced with NICE, otherwise known as Single Technology Assessment, or STA. This was, essentially, working with the previous NICE process, whereas looking at Multiple Technology Appraisal and photos, now everything will be looked at independently. In 2010, the government changed in the UK, combination of a conservative coalition government coming into play. These QuANGOs were otherwise known as, basically, these quasi organizations or really, NGOs, non-governmental organizations, and NICE was one of those and it actually survived. Many of them went down at that period of time. At that time also, NICE took over responsibility of actually making distinctions for what would be covered or not. Then again, the name changed again, but still people liked to call it NICE. 2014 brought in the notion of actually using value based pricing, but the implementation was not quite clear exactly what that structure will be. Now when we look at how NICE guidance actually works, there is the central goal of developing NICE guidance. But it actually falls into, basically, three different centres. The Centre for Public Health Excellence, which looks at different public health interventions, and such. The Centre for Technology Assessment, which does the proper technology appraisals, that's usually where most of the pharmaceutical and medical device components are going to fall. And then the Centre for Clinical Practice, which talks about the application of those technologies that are commonly used. Now, in terms of the criteria that are used for whether a procedure is covered or not, one thing is rarity. That is, is this a big enough population or is it too small? Is there any sort of alternative treatment that's comparable benefit that's available through the British National Health Service? Life expectancy, this is kind of a sad one, actually. So the idea is that if something, someone is going to have a relatively short life expectancy, that might be a major concern about whether it's appropriate to extend, and then survival benefit. Is there sufficient evidence to indicate that the treatment offers an extension of life, normally at least three additional months compared to the current NHS treatment? So here are some NICE decisions under what was used as the end of life criteria developed there. And so the threshold for these different drugs that are being looked at here, was the $50,000 per quality threshold. The thought being that if things are falling at the end of life, it might be too expensive to cover, and so these drugs here might not necessarily make the cut. Whereas these would be, potentially, okay to extend someone's life and actually enhance their quality. So the current approach that actually gets used when figuring out that the stakes are covering between 20,000 and 50,000, but generally anything between 20 and 30 is covered. The thought is that there's the innovative nature of the technology that's looked at, whether or not there are any non-health objectives of the NHS that you've considered. HRQoL's known measure of actually looking at health status to see if that's improved. And then beyond this $30,000 threshold, the question is whether or not you're actually extending treatment at the end of life and if you're doing it in a way that is meaningful, then that might be considered per payment up to $50,000 per quality. More challenging, now there's a new approach that's actually been developed per NICE for these criteria as well, that actually spans the whole continuum. This considers burden of illness, the wider social impact, the technology again, looking at health status, how innovative the technology is, and then the non-health objectives. If you notice, the end of life criteria is not in play. An interesting study that came out just recently in the Journal of Health Economics, 2013, actually looked at societal views on NICE and cancer drugs. And found some pretty interesting criteria about what, essentially, a population of adults in Great Britain said about what they consider to be the priorities. Because on the one hand, these priorities are being set by, basically, an organization like NICE. And they're smart people, they're relatively informed. The thought is, what does the population think? And so the interesting thing, using a survey in methodology, was that they found the population supported using the following criteria for payment. Where there's a severe disease, it's unmet need, it's innovative, which was covered before, and there could be wider social benefits. But there was not support for priority for end of life, for children, for disadvantaged groups or for cancer, which is surprising, because these are the things that are frequently cited as, you need to have access to services. But, they really weren't the core, and again, NICE is a political process, and when we'll see how these results will go into resetting the criteria for NICE in the future, particularly as it pertains to cancer medications. This concludes this module on cancer medications as an illustration of the pharmaceutical market.
