From NCE to NICE: the role of pharmacoeconomics

Abstract

Medicines now cost the NHS more than £13 billion per annum, and account for around 10% of the overall budget. An ageing population, together with technological advances, means that the year-on-year rise in the total costs of medicines is likely to continue, despite the inevitable budgetary cuts in the wake of the economic downturn. The resulting scarcity of monetary resources necessitates trade-offs, which result in an opportunity cost, that is, the benefits forgone in the choice of one expenditure over others. The notion of opportunity cost is central to the activities of organizations such as the National Institute of Health and Clinical Excellence (NICE), the Scottish Medicines Consortium (SMC) and the All Wales Medicines Strategy Group (AWMSG), which are charged with making judgements on whether medicines are to be made available to NHS patients. The establishment of evidence-based medicine in the eighties, as the basis for more effective prescribing, was followed in the nineties by a recognition of the importance of value for money considerations for more efficient (cost-effective) prescribing. Health economic evidence, pharmacoeconomic if pertaining to medicines, is now accepted as an essential component of health technology appraisal both in the UK and further afield.