By Adam Brimelow
Heath correspondent, BBC News health
Critics say NICE is a barrier to new treatments
The health service medicines watchdog is considering radical plans to encourage NHS use of new treatments in England, Wales and Northern Ireland.
It is proposed to allow the use of promising new drugs - even if they break the rules on pricing.
The National Institute for Health and Clinical Excellence (NICE) has promised a public consultation on the proposals.
Drugs companies have welcomed the plans, put forward in a review by the former head of the NHS regulator.
The government wants to encourage the development and use of new treatments in the health service.
We should consider offering an incentive to the industry
Sir Ian Kennedy
But NICE is sometimes seen as a barrier.
It has to decide which drugs offer the health service best value for money - and that means weighing the health improvements offered by new drugs against the added expense.
Earlier this year NICE asked Sir Ian Kennedy, former head of the Healthcare Commission, to examine whether it was doing enough to encourage innovation.
Sir Ian's review included submissions from the drugs industry, patients groups and health service managers.
Relax the rules
He said NICE should relax its rules on pricing for drugs that offer big improvements for patients.
"We should consider offering an incentive to the industry and to others to say OK if you're doing something which really brings cutting edge technology to patients you should have some financial incentive for a limited period of time so that you can make slightly more money which you can put back into research, so that the NHS really does get the best."
NICE calculates a drug's value for money by assessing increased life expectancy and quality of life, set against the price.
If the treatment is too expensive relative to the benefits, it won't be approved.
Sir Ian said the price ceiling should be raised for two or three years for important new drugs.
That would allow a for fuller evaluation, so that if the drug is working well it will continue to be available under the normal NICE approval process.
However, he said given the financial constraints in the NHS, any agreement to increase funding for expensive new treatments would mean there was less money for other drugs.
He said: "There is another consequence that if you do pay more money for particular kinds of drugs then you'll have less money for everything else.
Patients in the UK are missing out on modern treatments
Association of the British Pharmaceutical Industry spokesman
"You will have to drop the threshold - how much you are prepared to pay for other drugs.
"That is the quid for the quo that the industry will have to deal with."
The plan has some similarities with a proposed "innovation pass" outlined by the government last week.
This would allow innovative new medicines targeted at a small patient group to bypass the NICE appraisal process for a period while data is gathered.
Sir Ian said this approach could potentially be a "Trojan horse" which could undermine NICE - and will not be necessary if his recommendations are accepted.
Sir Ian also said NICE should give more emphasis to health-related benefits that are important to patients and doctors.
These include taking a tablet rather than an injection, a reduction in side effects or the opportunity to be treated at home rather than in hospital.
He said: "They need to be set down explicitly and then NICE needs to demonstrate that they've factored them in in determining whether they approve of this drug at this level of price and whatever flows from that."
Patients 'missing out'
The Association of the British Pharmaceutical Industry, which speaks for drugs companies, welcomed the plans.
A spokesman said: "Patients in the UK are missing out on modern treatments.
"Sir Ian Kennedy has recognised the need for NICE to change - for it to be more transparent, to foster innovation, and to take greater account of wider health benefits.
"Patients will only benefit if the recommendations he sets out are implemented, and the sooner they are implemented, the sooner patients in the UK will start to enjoy the access to the modern treatments currently being enjoyed by their counterparts in other European countries."
NICE said it will offer a formal response to the idea in September, and that will be followed by a three month public consultation.
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