Memorandum by Mr Christopher Newdick (NC
1. I am the Reader in Health Law at the
University of Reading with an interest in the legal framework
surrounding the NHS, its patients, doctors and other staff. I
also serve on Berkshire Health Authority's Priorities Committee.
The Committee balances the statutory requirement of health authorities
to remain within their annual budgets with the duty to serve the
best interests of patients in the local community.
2. My concern relates the authority and
credibility of NICE. There has been a failure to clarify the principles
by which it should perform its duties and how it interacts with
PCTs and GPs in the resource allocation process. Confusion about
its authority and purpose creates greater uncertainty amongst
doctors, patients and managers as to their rights and duties in
the NHS. Therefore, I encourage the Committee to seek to clarify
(a) the authority of NICE guidance,
(b) the principles that underlie NICE guidance,
(c) the relationship between NICE and PCTs,
(d) the affect of NICE on the GP's Terms
A. THE AUTHORITY
OF NICE GUIDANCEIS
3. What is the duty of PCTs to implement
NICE guidance? Before 2002, the guidance was not binding on Health
authorities and PCTs. Of course, they had a duty to consider it
carefully and not to depart from it other than for good reasons,
but it was persuasive only. However, from 1 January 2002, NICE
guidance has the status of directions which are mandatory.
But exactly what do they mandate?
4. Before the Directions were published,
it was understood that PCTs would be duty-bound to implement all
NICE guidance. The press release which announced the policy said
heath authorities and PCTs would be expected to manage their budgets
"so that patients can be guaranteed that if a treatment recommended
by NICE is. . . the appropriate treatment for them, they will
But the wording of the Direction itself is much less clear. The
A Health Authority shall. . . apply such amounts
paid to it. . . as may be required so as to ensure that a [treatment]
recommended by the Institute. . . . is normally available. . .
5. What does this mean? A "guarantee"
of access to care would direct that treatment recommended by NICE
is always available. Why use the phrase "normally available"?
Crucially, in what abnormal circumstances can PCTs decide not
to implement NICE guidance? Would scarce resources be a good reason?
If so, how different is the duty of PCTs now by comparison to
the position before 2002?
6. Many new PCTs will commence work in circumstances
of uncertainty as to their rights and responsibilities. They need
to understand when PCTs can respond to the needs of local communities
according to their own discretion (consistent with the policy
in Shifting the Balance) and when, by contrast, they are
obliged to adhere to the directions of the Secretary of State.
This is especially important in respect of their duty to implement
NICE. PCTs are entitled to clearer guidance. Their obligations
should not be left in doubt.
B. WHICH PRINCIPLES
UNDERLIE NICE GUIDANCE?
7. NICE's approach to decision-making should
be transparent. This is part of the principle of NHS governance
and necessary to reassure patients that it is acting fairly and
consistently between different cases. NICE should do more to explain
how it translates technical appraisals into guidance and articulate
the values it uses as a framework for its decision-making.
Although its procedures are improving, the substantive
component of its decision-making process is obscure.
8. First, are QALY estimates relevant? It
appears to use a QALY threshold of around £30,000 as a cut-off
point for approval
(the estimates are notoriously difficult to calculate). If QALYs
are significant (even if only as a guideline), NICE should say
9. Secondly, where possible, clear cost-effectiveness
comparisons should also be made with other treatments offering
equivalent but less expensive care. NICE has not always done this.
10. Thirdly, especially when the cost of
its recommendation is high, proper thought must be given to the
question of disinvestment. If this function is beyond NICE's competence,
the task should be undertaken by another body. It is unacceptable
for new targets to be imposed by NICE, the Commission for Health
Improvement, National Service Frameworks and the Department of
Health without thinking about their cumulative impact on a fixed
PCT budget. Disinvestment follows inexorably from redirecting
money within a fixed income. Bear in mind that NICE is not concerned
with many "non-technological" aspects of care, for example
the number of nurses available in hospitals and the community.
These services may become the most likely target for disinvestment
unless a more sensitive approach is taken to local discretion.
11. Fourthly, it follows that the Secretary
of State should reconsider the policy of issuing "blanket"
directions for all NICE guidance. Its recommendations should be
graded in terms of priority, for example, "high" (must
do), "medium" (strongly recommended), or "low"
(desirable, but subject to other local priorities).
For example, NICE has recommended an expensive treatment for reducing
the symptoms of influenza by one day. Should this guidance command
the same access to resources as effective cancer treatment that
will save lives? A rule that obliges PCTs to fund the former,
to the total disregard of other demands upon its budget is not
credible. It creates the impression of a government entirely insensitive
to the need to balance competing demands within fixed budgets.
12. A basic question to start with is: should
NICE ration medicines that are needed on grounds of cost? NICE's
statutory powers do not provide a clear answer to this question.
Regulations require NICE to promote "clinical excellence
and. . . the effective use of available resources in the health
service" as the Secretary of State may direct.
The Health Committee has asked the Secretary of State whether
he thought NICE could ration NHS treatment. He responded:
There are two quite separate distinctions which
is about assessing clinical and cost effectiveness and a quite
separate set of decisions which are around affordability issues.
In the end you would want. . . affordability decisions to be located
with an accountable politician who has to answer to the House
of Commons and to Parliament. It just so happens that accountable
politician is me.
With respect, the distinction between "clinical
and cost-effectiveness" and "affordability issues"
is not clear. (For example, how does the distinction apply to
the drug beta interferon?) In any case, despite the boldness of
the rhetoric, accountable politicians almost never engage in "affordability
decisions". This is entirely unhelpful as a means of explaining
how NICE works.
13. Unlike PCTs, NICE is not duty bound
both to remain within a fixed budget and serve the diverse health
needs of a population of patients. It will lose credibility if
it becomes detached from the real funding constraints faced by
local health economies.
One mechanism for highlighting the reality of commissioning care
at PCT level would be to allocate a notional drugs budget to NICE.
The Institute would be expected to discuss and explain how it
manages the tension between demand and supply. Such an example
of transparent decision-making would be of great benefit in demonstrating
how it is accountable for its decisions within a consistent framework
of values and policies.
C. THE RELATIONSHIP
BETWEEN NICE AND
14. There is another reason why NICE should
be transparent about its decision-making. As we have seen, PCTs
will be under greater pressure to accommodate the cost of NICE
guidance. The cumulative cost of NICE directions over time will
be considerable. They will absorb increasing proportions of fixed
This is important for treatments not considered by NICE,
the number and cost of which will also increase. Inevitably, NICE
will impinge on the resources available to fund treatments which
are not subject to its guidance and over which PCTs retain
Inevitably, PCTs will have to develop fair and consistent frameworks
for dealing with claims of this nature. In effect, each PCT will
need a mini-NICE of its own at local level.
15. At present, different authorities perform
this task in very different ways. The process requires significant
resource commitments, massive duplications of effort and is likely
to create inconsistency between different "post-codes".
The government's intention is to reduce these differences in access
to treatment. Yet, at the same time it has increased the number
of commissioning authorities from around 100 health authorities,
to over 300 PCTs. NICE creates a danger that, with respect to
the many treatments which are not subject to its guidance, the
strains imposed on smaller residual budgets will cause even greater
disparity and confusion between PCTs; and further disillusionment
16. It is absurd that with the expertise
and experience of NICE, over 300 PCTs should have to develop their
own "priorities" policies without any guidance from
the centre, often addressing questions identical to those that
have already been considered by PCTs elsewhere. Rather, PCTs should
be offered a national framework of values. NICE is the obvious
body to perform this function. It should promote its principles
as a model on which PCTs should base decisions of their own. Of
course, the application of such a model by different PCTs would
often lead to different conclusions. But the process and values
would be similar. The Secretary of State should direct NICE to
develop such a framework within which PCTs should consider new
drugs and treatments which are not subject to NICE guidance.
17. This is important for another reason.
Expectations of the NHS have been raised and patients (and their
pressure groups) are prepared to challenge adverse decisions in
judicial review. A number of successful cases have insisted on
fair, consistent and transparent priorities policies.
Clearly, this requirement would be assisted by a consistent "NHS
approach" to the issue. Of course, generic guidance of this
nature would be flexible and imprecise. This is inevitable in
the absence of a generally accepted and practicable definition
of health "need". Such a framework of values would leave
considerable margin for discretion. Nevertheless, it would provide
greater reassurance to patients and PCTs that decisions had been
made fairly and responsibly.
D. NICE AND THE
18. How does NICE guidance apply to GPs?
NICE does not force doctors to use treatment they consider inappropriate
because "even the best clinical guideline is unlikely to
be able to accommodate more than around 80 per cent of patients
for whom it has been developed."
But the question arises in the other direction. Can doctors prescribe
treatment which has NICE disapproval? Of course, such differences
of opinion will not be common. But cases will arise in which a
patient can show, or the doctor believes, that such a treatment
should be used.
19. This is important because PCTs will
be tempted to penalise GPs who prescribe treatment which has NICE
disapproval. This is most difficult when NICE disapproves a treatment
on cost-effectiveness reasons rather than for its clinical effectiveness
(the drug beta interferon may be an example). Unless the position
is made clear, PCTs may threaten GPs with penalties for adhering
to their Hippocratic commitment to their patient's best
20. The only case to have tested the law
on the GP's duty to prescribe concerned the drug "Viagra".
The case suggests that any interference with the GP's responsible
clinical discretion would be unlawful by reason of the statutory
duties imposed by the GP's Terms of Service. Recall that in R
v Secretary of State, ex p Pfizer, the Secretary of State
told GPs not to prescribe "Viagra" pending the inclusion
of the drug on the statutory "grey list" of drugs (which
may be prescribed in limited circumstances only). The restriction
was challenged by way of judicial review and held to be unlawful.
The court held that the Terms of Service imposed on GPs a duty
to prescribe based on the reasonable exercise of professional
The doctor must give such treatment as he, exercising
the professional judgment to be expected from an average GP considers
necessary and appropriate. . . . If a GP decides that a particular
treatment is necessary, it must inevitably be appropriate. . .
The guidance in question trespassed upon the
proper statutory responsibilities imposed on GPs by the GMS regulations.
The Secretary of State is entitled to advise doctors to be cautious
in using drugs, "but [he] must make it clear that the GP's
clinical judgment is supreme." This suggests that an unfavourable
review of a treatment from NICE cannot place a blanket ban on
its use by GPs.
21. The NHSE appears to have taken exactly
the same view. While encouraging GPs to live within budgetary
constraints, it says:
The new system will continue to allow individual
GPs to decide what is best for the patient, whether for example,
to prescribe drugs or refer patients to hospital on the basis
of their clinical judgement. The freedom to refer and prescribe
remains unchanged. Patients will continue to be guaranteed the
drugs, investigations and treatments they need. There will be
no question of anyone being denied the drugs they need because
the GP or Primary Care Group have run out of cash. GPs' participation
in a primary care group will not affect their ability to fulfil
their terms of service obligation always to prescribe and refer
in the best interest of their patients.
22. The Terms of Service emphasise the GP's
duty to individual patients. This makes it difficult for GPs to
engage themselves in issues of "cost-effectiveness"
and "affordability". There is a serious danger of conflict
between the GP's duty to his, or her patients and PCTs duties
to remain within their annual budgets. NICE should remove any
confusion by clarifying how it considers the Terms of Service
may inhibit the take up of NICE guidance in primary care. This
is essential for the relationship between GPs and PCTs.
23. The Terms of Service are presently being
reformed and new regulations are expected by April 2002. This
potential for conflict should be clearly addressed in the new
terms of service.
24. Learning from Bristol
highlights how governments make promises on behalf of the NHS
which are impossible to achieve within current funding constrains,
and to leave NHS staff to take the blame for disappointed expectations.
Governments of the day have made claims for the
NHS which were not capable of being met on the resources available.
The public has been led to believe that the NHS could meet their
legitimate needs, whereas it is patently clear that it could not.
Healthcare professionals, doctors, nurses, managers, and others,
have been caught between the growing disillusion of the public
on the one hand and the tendency of governments to point to them
as scapegoats for a failing service on the other. . . The NHS
was represented as a comprehensive service which met all the needs
of the public. Patently it did not do so. . . 
Indeed, even allowing for the additional funding
promised to the Service, it urges caution as to the expectations
we can realistically have of the NHS:
The currently announced injection of funding
will do much to enable the NHS to catch up: to train and recruit
the needed healthcare professionals; to refurbish the hospitals
and clinics; to obtain the necessary equipment; to reconfigure
the service. But it will not be enough to do more than this. It
will not. . . allow the NHS to develop in the way contemplated
by the NHS Plan.
25. In these circumstances, health authorities
have been left to muddle through with inconsistent and piecemeal
policiesand to stretch scarce resources to breaking point.
The challenge for NICE is to detach itself from the politics of
the NHS. Learning from Bristol recommends that NICE should
be given greater autonomy and independence from government.
This is welcome, but any such independence must depend on greater
candour as to the limitations inherent in the NHS and the values
by which cost-effectiveness and affordability decisions should
be made. Otherwise NICE becomes unreviewable and unaccountable,
and cynics will say it is no more than a device for deflecting
attention away from governmentfor "shifting the blame".
26. Patients probably accept that the NHS
has to make difficult decisions around "opportunity costs".
If so, limited rationing based on clear, compassionate and consistent
values may also be acceptable. This must be a central objective
of NICE, both for itself, and for the benefit of PCTs in general.
With enhanced transparency, at arm's length from government, NICE
has the capacity to give patients well informed and realistic
expectations of the treatments they can expect from NHS.
2 Press release 2001/599, New Statutory Obligations
for NHS to fund treatments recommended by NICE. Back
Directions made 11 December 2001. Back
Z Kmietowicz, "Reform of NICE needed to boost its credibility",
(2001) 323 BMJ 1324. Back
J Raftery, "NICE: faster access to modern treatments? Analysis
of guidance on health technologies" (2001) 323 BMJ
See P Elton, "NICE should make cost-effective comparisons"
(BMJ electronic letters, 3 May 2001). Back
See R Cookson, D McDaid and A Maynard, "Wrong SIGN, NICE
mess: is national guidance distorting allocation of resources?",
(2001) 323 BMJ 743. Back
National Institute for Clinical Excellence (Establishment and
Constitution) Order, S.I. 1999 No 220, as amended by S.I. 1999
No 2219. Back
Mr Alan Milburn, Secretary of State. Evidence to HC Health Ctte,
8 November 2000, para 336. Back
See N Freemantle, N Barbour et al, "The use of statins:
a case of misleading priorities? (1997) 315 BMJ 826. Back
Section 97, National Health Service Act 1977. Back
M Sculpher and M Drummond, "Effectiveness, efficiency and
NICE", (2001) 322 BMJ 943 and S Ahmed and J Appleby,
"Is NICE guidance affordable?" (BMJ electronic
letters, 11 December 2001). Back
See eg R v North Derbyshire HA, ex p Fisher  8 Medical
Law Reports 327 and R v North West Lancashire HA, ex p A,D
& G (2000) 53 Buterworths Medico-Legal Reports 148. Back
At present, NICE approvals have concerned medicines available
in secondary care. However, over time, those treatments will become
familiar to GPs. Also, as the number of approvals increase, more
will affect GPs. Back
Response to the Report of the Bristol Royal Infirmary Inquiry
(NICE, 2001) p 8. Back
R v Secretary of State for Health, ex p Pfizer 
Lloyd's Reports Medical 289, 295. Back
HSC 1998/139, paras 52-53. Back
Cm 5207, 2001. Back
At p 57. Back
Above, at 315, para 36. Back