Two months after a report urged the UK's National Institute of Clinical Excellent to consider a drug's wider benefits and provide more transparency into its decision making, the watchdog is offering some measures that may make its procedures clearer and the agency more accountable.

The proposals by the cost-effectiveness watchdog will be made at its regular public board meeting on Sept. 16 and comes after an earlier report on the state of the U.K. biosciences industry underscored a widespread perception that NICE stifles innovation and, consequently, biomedical investment in the U.K.

In response, NICE commissioned Sir Ian Kennedy, a professor of health law, ethics and policy at University College London, to determine how broadly it should define a medicine's value and how to assess innovation when deciding whether a particular drug or technology should be reimbursed by the U.K.' s National Health Service.

His report, which was released in July, came amid growing hostilities between the agency and the pharmaceutical industry over NICE's basic measured used to assess cost effectiveness - the QALY, or quality-adjusted life year (Also see "NICE Enough? Watchdog's Basic Approach Is Sound, But More Transparency Is Urged" - Pink Sheet, 23 July, 2009.).

The QALY represents the estimated additional cost of one year of healthy life for one person, when comparing a new drug with current standard treatment. Drug makers argue the measurement is too narrow and overly quantitative, and fails to consider wider societal benefits that a product may offer.

In his report, Kennedy concluded that the QALY benchmark is fundamentally sound, but also determined the cost-effectiveness watchdog should consider broader benefits and health-related factors that a drug may offer, although he stopped short of including societal benefits.

And he also offered suggestions on how NICE should take into account the innovative nature of medicines, including criteria indicating that a drug should "substantially and significantly improve the way that a current need is met."

For its part, NICE argues that it already "has flexibility in supporting the use of technologies" whose cost-per-QALY exceeds the £30,000 threshold (the cut-off point used to decide whether a drug will be reimbursed or not), including "where the intervention is an innovation that adds substantial, distinct and demonstrable benefits that may not have been adequately captured in the measurement of health gain."

The agency also points to recently introduced guidance, which allows it to raise the threshold for treatments that extend life at the end of life (from which several drugs have already benefited) and the even-newer 'Innovation Pass,' which the UK government announced last July in a bid to kick start the biosciences sector. The initiative allows certain novel drugs for treating small patient populations to bypass NICE until sufficient data has been collected to warrant a regular review.

Still, recognizing its role in supporting innovation (and, in particular, the UK government's fresh call for it to do so), NICE is proposing two measures that, if not exactly radical, certainly try to make the process clearer and, thus, make the agency more accountable.

First, if a company claims its product is 'innovative' and that this confers specific benefits upon it, scoping workshop meetings (which are held prior to assessment) will be used to explore those 'unique characteristics (of the drug or technology) which support this proposition, and the data sources through which the Appraisal Committee will be able to validate it." In other words, NICE is saying, we'll explicitly lay out upfront the company's claim to innovation and how we can validate it.

However, NICE must still establish whether a supposedly 'innovative' product, in fact, has a substantial impact on health-related benefits and improves the way a current need is met (above and beyond best supportive care). Innovation for its own sake isn't much help.

Therefore, in its second measure, the agency states that where its Appraisal Committee is satisfied that a product represents a 'step change' - noting that it's up to the committee to decide what 'step change' means - it will have to demonstrate that these innovative characteristics have been taken into account (and, one presumes, how they've been taken into account) in the QALY calculation of health-related quality of life. If they haven't directly been factored into that calculation, the committee will have to describe how it has evaluated their impact (if at all) on its overall judgment of the drug's cost-effectiveness.

Basically, then, NICE's committees must still do a better job of explaining themselves and their evaluation processes, and of pinpointing how and where they factor in innovative value, rather than just claiming that they do.

"We're going to be more systematic in cataloguing those (innovative) features and in tracking our assessments of those features through the appraisal process, all the way through to the final guidance," explains NICE's CEO Andrew Dillon.

At the end of the day, though, the exercise isn't going to get any easier. "We have to convert a proposition that a drug or technology is innovative into a measurable assessment of patient benefit," Dillon continues. "We have to unpick the proposition and find out in what way a product's innovativeness can benefit patients. Then we factor that into the value of a drug."

As for drug makers, it won't be enough to walk through the door and declare that a drug is innovative.

- Melanie Senior (m.senior@elsevier.com)

Defining Innovation: UK's NICE Responds To Recent Criticism Over Its Methods

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