Regina (Bristol-Myers Squibb Pharmaceuticals Ltd) v National Institute for Health and Clinical Excellence; [2009] EWHC 2722 (Admin); [2009] WLR (D) 318

EUROPEAN COMMUNITY — Council Directive — Implementation — United Kingdom notifying European Commission of criteria used in single technology appraisal scheme — More detailed scheme subsequently adopted — Single technology appraisal of cost effectiveness of manufacturer’s drug carried out taking into account manufacturer’s figures and figures produced by independent review body based on modifications to manufacturer’s model on cost effectiveness — Guidance issued with negative recommendation — Whether United Kingdom obliged to notify commission of detailed scheme — Whether duty to act fairly when carrying out appraisal — Whether failure to disclose modified model breach of duty to act fairly — Council Directive 89/105/EEC, art 6 — Directions and Consolidating Directions to the National Institute for Health and Clinical Excellence 2005, para 2(1)(a)

Regina (Bristol-Myers Squibb Pharmaceuticals Ltd) v National Institute for Health and Clinical Excellence

[2009] EWHC 2722 (Admin); [2009] WLR (D) 318

QBD: Blake J: 6 November 2009

Art 6 of Council Directive 89/105/EEC relating to the transparency of measures regulating the pricing of medicinal products for human use and their inclusion in the scope of national health insurance systems (OJ L40) (“the Transparency Directive”) was engaged where the National Institute for Health and Clinical Excellence (“NICE”) published guidance making a recommendation in respect of a health care intervention for treatment of patients after making a single technology appraisal pursuant to para 2(1)(a) of the Directions and Consolidating Directions to the National Institute for Health and Clinical Excellence 2005, issued by the Secretary of State pursuant to s 7 of the National Health Service Act 2006. Where the negative criteria for a single technology appraisal leading to the publication of guidance were the antithesis of the positive criteria it was incumbent upon the United Kingdom to communicate those criteria to the Commission of the European Communities pursuant to art 6 of the Transparency Directive. NICE was under a duty to act fairly in carrying out single technology appraisals.

Blake J so held in the Administrative Court of the Queen’s Bench Division, when dismissing the claim by Bristol-Myers Squibb Pharmaceuticals Ltd, the manufacturer of the drug Abatacept, for judicial review of the decision of NICE’s appeal panel on 21 April 2008 and the associated publication of guidance on 23 April 2008 by which NICE had decided it would not recommend the drug for treatment of people with rheumatoid arthritis. The claimant sought a declaration that (1) the guidance refusing approval was a restiction on the range of medicinal products within the meaning of art 1(1) of the Transparency Directive and therefore amounted to an exclusion of an individual product, within the meaning of art 7 of the Directive, which did not comply with the terms of the Directive because the detailed criteria applied by NICE in its single technology appraisal process had not been referred to the commission by the United Kingdom, and (2) NICE had not acted fairly in carrying out its appraisal of the cost effectiveness of the drug since it had refused to disclose to the claimant the modifications made to the claimant’s model used to assess cost effectiveness of its drug, by the Evidence Review Group, an independent academic group which reviewed the manufacturer’s submissions on cost effectiveness of its drug and reported to NICE.

BLAKE J said, first, distinguishing R v Secretary of State for Health, Ex p Pfizer Ltd [1999] 3 CMLR 875 where a circular had been caught by art 7 of the Transparency Directive because it was a decision “to exclude ... medicinal products from coverage of its national health insurance system (negative lists)”, that a favourable recommendation by NICE in guidance to other health authorities in respect of a product was indistinguishable from inclusion in a positive list and art 6 of the Directive, which governed the procedure in cases of inclusion in the positive list, was therefore engaged. The criteria for positive inclusion were simply the antithesis of the negative criteria in this case and art 6 was therefore engaged. It was therefore incumbent on the United Kingdom to communicate the criteria used in the single technology appraisal leading up to the negative recommendation to the commission. There was, however, no obligation to inform the commission of non-inclusion in the list. However, applying R (Pfizer Ltd) v Secretary of State for Health [2003] 1 CMLR 19, the criterion already communicated by the United Kingdom to the commission in respect of the NICE scheme for single technology appraisals was sufficiently clear and transparent to comply with the requirements under the Directive. That was so despite the fact that NICE had developed a more sophisticated model for assessing cost-effectiveness since it had communicated its criteria to the commission. The United Kingdom was not therefore in breach of its obligations under the Directive and the claimant was not entitled to a declaration on the first ground. Secondly, although not every decision made by a public authority was subject to the requirement of fairness (R (Menai Collect Ltd) v Department for Constitutional Affairs [2006] EWHC 724 (Admin)), the present case was about the discharge by a public health authority of its statutory functions of giving guidance on cost-effectiveness to other health authorities. The context of the regulatory scheme and the process it contemplated of the manufacturer’s submissions, consultation, provisional and final decisions and appeal, all pointed very strongly to the requirement to act in accordance with a general duty of fairness. Consultation with the manufacturer was the necessary pre-condition of any effective appraisal process. Fairness was not contra-indicated merely because the end decision for the defendant was one of judgment and broad evaluation. Furthermore since the Directive was applicable in this case the duty to act fairly was required by general principles of EU law. NICE could be required pursuant to its duty of fairness towards a manufacturer to disclose a full modified model used by an Evidence Review Group but, distinguishing R (Eisai Ltd) v National Institute for Clinical Excellence(2008) 11 CCL Rep 385, fairness did not require disclosure in the present case.

Appearances: Lord Pannick QC and Tom de la Mare (instructed by Arnold & Porter LLP) for the claimant; Charles Béar QC and Daniel Stilitz (instructed by Beachfroft LLP) for the defendant.

Reported by: Jessica Giles, solicitor.