It is not easy being a doctor in charge of NICE, the friendly sounding organisation that decides whether or not you die for want of a medical treatment. And decides it not on the basis of whether your life will be saved, but whether it is cost-effective to save your life.

Professor Sir Michael Rawlins grimaced slightly: “I know, it is horrid, in a way . . . ” and he tailed off. One of the best examples of Orwellian double speak may be the acronym for the National Institute for Health and Clinical Excellence. This is where bean-counting meets personal tragedy, where government accountancy says “no” to a man whose wife is dying for want of drugs that neither he nor the NHS can afford. The dilemma: with limited cash in the health service, do we spend a lot on saving a few patients or sacrifice them to help many others?

“You have got a tension between the patient in front of you, for whom you want to do the best you can, and then you have got the ones in the waiting room. You also have to think of them,” Sir Michael said.

NICE was created to take these difficult decisions away from politicians, but today it is under pressure as never before, and not only because of an ageing population, spiralling drug costs and an imminent slowdown in health funding. It is also, for the first time in its eight-year history, facing a court action from the makers of an Alzheimer’s drug that it refused to fund. The case goes to the heart of the nasty business: how does NICE put a value on human life? The pharmaceutical companies want to discover the secret equation by which NICE decides whether a drug will be cleared for NHS use. It is fiendishly complicated, but bear with us: at its heart is its attempt to put a price on one perfectly healthy year (normal people call this a blessing, health economists call this a “quality-adjusted life year”, or QALY).

How much is this worth? Priceless, many would say, but NICE puts it at £30,000. Very roughly, if the extra cost of a new treatment to give one good year of health is more than that, there have to be exceptional circumstances for NICE to approve it.

Take two drugs: Riluzol, which treats motor neuron disease, and Relenza, a flu drug. The QALY for both is £38,000 and so would normally be beyond NICE’s threshold. But Riluzol not only prolongs life by six months but staves off a tracheotomy, which many consider a trial worse than death. Relenza merely stops you feeling grotty for a day. So NICE said yes to Riluzol; no to Relenza.

This kind of calculation immediately presents more questions. Why, for instance, is a year of life costed at £30,000? The figure is, Sir Michael admitted, pretty arbitrary. Officially NICE does not take account of politicians, or the pockets of the NHS, but the figure is broadly pitched at what the country can afford and has a serious impact on the public purse. Should, for instance, the cost of a human life go up with inflation, like a pint of milk? So far it has not, but NICE is reviewing the question.

There might come a time, Sir Michael said, when the system would break down; when NICE deemed something cost-effective but the NHS could not afford it; a drug that cured lung cancer, for instance, but cost £10,000. To treat 50,000 people a year would cost half a billion pounds.

“What would have to happen then is the Secretary of State would have to say, ‘Terribly sorry, NICE, I’m going to have to countermand your advice’.”

As if. As if any minister could deny people a cure for cancer — it would be a national scandal. For much of this comes down to politics. On one end of this equation is the mother in a hospital bed who wants an expensive drug to keep her alive to see her children through to adulthood; on the other is a politician deciding how much the taxpayer will bear to support the NHS. The politician uses NICE to say “no” to the mother. “When you come to this whole area of cost-effectiveness in healthcare, politicians universally, it’s not just in Britain, America, in Europe, they just can’t do it,” Sir Michael said. ()

Patricia Hewitt, the Health Secretary, did intervene last year in a dispute over whether the breast cancer drug Herceptin should be available on the NHS, playing good cop by saying that cost should not be an obstacle in its provision before NICE had a chance to judge. Was Sir Michael annoyed? “Not annoyed, no. Surprised. Let’s leave it there.” It is a rare moment when his forthrightness fails him, because Sir Michael is otherwise stark in his warning to politicians: they cannot duck the inevitable, as Britain’s ageing population needs more treatments that are getting more expensive. “The rumours are that Mr Brown is not going to give Ms Hewitt much more money for healthcare,” he said. “Well, then I can see some difficulties emerging.”

The first response will be what NICE calls disinvestment, or sensible cost-cutting. Sir Michael rattled off a list of possibilities: the proper use of a heartburn drug, Omeprazole, would save £40 million a year. He also wants to end the practice of prescribing antibiotics for children with sore throats and earache, perhaps giving GPs a piece of paper to hand to parents, from NICE, explaining why it is a waste of money.

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