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Cost effective but unaffordable: an emerging challenge for health systems

BMJ 2017; 356 doi: (Published 22 March 2017) Cite this as: BMJ 2017;356:j1402

Re: Cost effective but unaffordable: an emerging challenge for health systems

The NHS is facing enormous pressures as demand increases and resources are tightened to unprecedented levels. NICE has always had to align its guidance with the ambitions and constraints under which the NHS operates. The introduction of a budget impact test is just the most recent example of how this alignment is maintained.

In condemning the budget impact test as inequitable, the authors have misunderstood its primary purpose. The test identifies when NHS budgets may be at risk of being destabilised by new treatments and for the risk of that happening to be managed, in whole or part, through negotiations which will begin well before, and will be completed by the time NICE publishes its guidance. By doing this, positive guidance on high budget impact treatments has the best chance of being implemented as soon as the guidance is published.

Budget impact and the application of a budget impact test, will not influence NICE’s judgements on the clinical and cost effectiveness of a technology. NICE will continue to recommend clinically and cost effective health technologies, regardless of their impact on NHS resources.

We know from looking at technology appraisals we have published over the last two years that only minority of drugs have a net budget impact in excess of £20 million, in any of the first three years of their use in the NHS. Fewer still will need a longer period (than the standard 90 days) to manage their adoption by the NHS, after the effect of commercial negotiations and the impact on patients have been taken into account. Even when a longer period is needed, funding will be phased in from the start.

There is no cap on the amount of money the NHS will spend on a new drug that NICE recommends. The £20 million net annual figure is simply the trigger for the commercial negotiation, not a maximum amount the NHS will pay in any one year.

NICE can consider extending the standard 90 day period if it considers that one or more of the criteria is satisfied. One of these criteria indicates that NICE may vary the funding requirement if it considers that: ‘the health technology cannot be appropriately administered until other appropriate health services resources, including staff are in place’. By considering applications from NHS England to phase in funding for high budget impact technologies over a longer period, we are properly interpreting ‘health services resources’, to include the immediate allocation of funds, which can be made available without putting other services at risk, and to ensure that the administration of a new technology does not unduly risk disrupting other services.

Consultees will be able to give their views on any request made by NHS England for more time to introduce a new treatment, before NICE makes a decision.

Competing interests: Director at NICE.

27 March 2017
Carole Longson
Director, Centre for Health Technology Evaluation
National Institute for Health and Care Excellence (NICE)
10 Spring Gardens, London SW1A 2BU