The National Institute for Health and Clinical Excellence (NICE), which is criticised regularly for being too conservative when it comes to approving new prescription drugs, is in fact too generous with its assessments, a group of economists has suggested.

The group argues that, by recommending drugs that save few lives, NICE is diverting money from other, better-value treatments.

Writing in the British Medical Journal, John Appleby, of the King’s Fund, and two professors of economics from City University in London, Nancy Devlin and David Parkin, say that NICE sets too low a threshold for the approval of new medicines.

NICE rates a drug as cost effective if there is evidence that it costs less than about £30,000 for every so-called quality-adjusted life year (QALY) saved. That means that if spending £30,000 on a drug can prolong a single life for one year of good health –or two lives forsix months, and so on – it is cost effective.

The three economists argue that this figure is randomly selected and is almost certainly too generous. The average primary care trust can gain an extra QALY in treating circulatory disease for £12,000, and in cancer for £19,000, they claim.

So if it is obliged to pay for treatments that cost £30,000 per QALY, the trust is forced to economise on those that cost less. This means that resources are poorly used and taxpayers do not get the maximum benefit.

The authors, risking the rage of patient groups that already complain of unfairness in NICE’s decision-making, say that NICE approves too many ineffective medicines and is reducing the overall efficiency of the service.

They want the health service to be given a “threshold committee” modelled on the Bank of England’s Monetary Policy Committee, to determine what a QALY is worth, given the cash available to the NHS. This would then be used throughout the NHS.

“NICE conjuring up a threshold and others not using one at all creates neither efficiency nor fairness in the NHS,” they say.

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