5 Varying the funding requirement to take account of net budget impact

5 Varying the funding requirement to take account of net budget impact

Policy context

5.1 As referred to in sections 1.3–1.5, the National Institute for Health and Care Excellence (Constitution and Functions) and the Health and Social Care Information Centre (Functions) Regulations 2013 (the 'Regulations'), expect NICE to:

  • 'recommend […] that relevant health bodies provide funding within a specified period to ensure that the health technology be made available for the purposes of treatment of patients' and

  • 'specify in a technology appraisal recommendation the period within which the recommendation […] should be complied with', which 'must be a period that begins on the date the recommendation is published by NICE and ends on the date 3 months from that date'.

5.2 The Regulations state that if NICE considers it appropriate, NICE must specify a longer period, when:

  • the health technology cannot be appropriately administered until:

    • training is,

    • certain health service infrastructure requirements including goods, materials or other facilities are, or

    • other appropriate health services resources, including staff, are,

      in place or

  • the health technology is not yet available in England.

5.3 The Regulations require NICE, when it is minded to specify a longer period, to consult with 'such persons with an interest in the appraisal of a health technology…about the appropriate period that may be specified in a technology appraisal recommendation', and that this consultation must include 'the Secretary of State and the [Commissioning] Board [now referred to as NHS England]'.

5.4 NHS England has indicated that it may request consideration of a longer time to implement the statutory funding requirements for technologies funded through its specialised commissioning budgets, when the potential net budget impact is expected to exceed £20 million per year in any of the first 3 financial years of its use in the NHS. NHS England has indicated that it will also do this on behalf of clinical commissioning groups, for locally commissioned technologies that NICE has appraised.

5.5 If the potential net budget impact is expected to exceed £20 million per year in any of the first 3 financial years of a technology's use in the NHS, NHS England will offer to engage in commercial discussions with companies whose technologies are being appraised by NICE before requesting a variation to the funding requirement.

5.6 A commercial discussion may not result in a budget impact of less than £20 million per year in each of the first 3 financial years of the technology's use in the NHS in England. In such cases, and when NHS England requests a variation to the funding requirement, NICE will take into account any relevant aspects of the commercial discussion in responding to the variation request.

Evidence submission

See figure 7 for an overview of the process and timelines.

5.7 After receiving the company submission, NICE will assess the potential budget impact of the technology by estimating the net annual cost to the NHS (see the assessing resource impact process manual for further details).

5.8 NICE will inform the company and NHS England of any technology which is likely to exceed a net budget impact of £20 million in each of the first 3 financial years of its use, normally within 17 calendar days after receiving the company submission.

5.9 Within 7 calendar days after receiving the net budget impact estimate, NHS England must inform NICE whether it intends to have a commercial discussion with the company. This will allow NICE to plan for potential changes to the timelines of a technology appraisal.

5.10 The budget impact commercial discussion between the company and NHS England will be carried out in parallel with the appraisal timescales. NHS England must provide a progress update to NICE at least 7 calendar days before the first appraisal committee meeting. Any budget impact commercial agreements confirmed at this point will be to specifically manage the net budget impact of the technology, and will not be reviewed by the appraisal committee.

5.11 For a rapid review or Cancer Drugs Fund review topic, the time frame for the budget impact commercial discussion between the company and NHS England will be readjusted accordingly.

Figure 7 Steps in budget impact assessment (before the first appraisal committee meeting)

Figure 7 Steps in budget impact assessment (before the first appraisal committee meeting)

First appraisal committee meeting

See figure 8 and figure 9 for an overview of the process and timelines.

5.12 If the appraisal committee recommends the technology as an option or makes a recommendation that optimises use of the technology, NICE will update its budget impact assessment of the technology.

5.13 NICE will inform the company and NHS England of the (new) estimate for budget impact, at the same time the appraisal consultation document (ACD) or final appraisal document (FAD) is published.

5.14 If NHS England and the company intend to pursue a commercial access agreement after the first appraisal committee meeting, and they anticipate that it will need more time than the next phase of the NICE process provides, NHS England must formally notify NICE 7 calendar days after receiving details of the potential budget impact of the committee's recommendations. NICE will suspend the appraisal process for a maximum of 12 weeks, to allow a second opportunity for commercial engagement and will inform consultees and commentators. NICE will decide when the appraisal will restart. The subsequent appraisal committee meeting will be rescheduled in line with the time needed for concluding the commercial engagement.

5.15 If NHS England intends to apply for a variation to the funding requirement after the first appraisal committee meeting, it must do so at the earliest opportunity, and no later than the end of the suspension period.

5.16 When a FAD is issued for appeal after the first appraisal committee meeting (the topic has gone straight to FAD), NICE will not offer to formally suspend the process to allow the company and NHS England to re-enter a commercial engagement period. NHS England and the company will be informed of the net budget impact before the release of the FAD and will have an opportunity for commercial engagement before FAD publication.

Figure 8 Steps in budget impact assessment (after the first appraisal committee) when an ACD is released

Figure 8 Steps in budget impact assessment (after the first appraisal committee) when an ACD is released

Figure 9 Steps in budget impact assessment (after the first appraisal committee) when a FAD is released

Figure 9 Steps in budget impact assessment (after the first appraisal committee) when a FAD is released

Subsequent technology appraisal committee meeting

5.17 If the appraisal committee chooses to alter the draft recommendations, NICE will update its assessment of the budget impact of the technology, when appropriate (see NICE's assessing resource impact process manual). NICE will inform the company and NHS England of the updated budget impact when the FAD is published. No further pause will be offered to the company and NHS England to re-enter a commercial engagement period.

5.18 In the event that NHS England intends to apply for a variation to the funding requirement, it must do so at the earliest opportunity, and no later than the end of the period for consideration and lodging an appeal.

Guidance executive and applying to vary the funding requirement

5.19 NHS England can advise NICE that it may need to apply to vary the funding requirement directly after receiving the estimate of the net budget impact at the evidence submission stage or at later stages in the technology appraisal.

5.20 When requesting a variation to the funding requirement, NHS England should provide:

  • The duration of, and the justification for, the proposed variation.

  • The relevant provisions of any commercial arrangement reached with the company.

  • In the case of a technology funded from the national specialised commissioning budgets, the amount and phasing of funding that will be made available and how it is intended that this should be applied to patients eligible for treatment.

  • In the case of technologies funded by clinical commissioning groups, the direction it intends to give about the phasing of funding during the deferred funding period.

  • An assessment of the impact on patients, eligible for treatment under the guidance, but whose treatments will be delayed because of the funding variation, taking into account NHS England's and NICE's responsibilities under equalities legislation.

  • Details of the interim commissioning policy that would be applied to phase in funding and to manage access to the technology during the extended funding variation period.

5.21 The NICE appraisal project team will present the application for a variation to the funding requirement to NICE's guidance executive at the earliest opportunity.

5.22 This can be at the stage of developing the ACD (to allow for consultation on guidance executive's decision to vary the timescale for the funding requirement at the same time as consultation on draft recommendations), with a FAD, or during the FAD appeal period.

5.23 At each of these stages, guidance executive will decide whether it will vary the timescale for the funding requirement taking into account whether:

  • the budget impact test has been met

  • all reasonable opportunities for reaching a commercial arrangement have been pursued

  • the request is in proportion to the size of the budget impact

  • the request takes account of the severity and acuity of the condition to which the guidance relates

  • NHS England's and NICE's duties under equalities legislation have been considered

  • an interim commissioning policy has been developed to provide phased funding for, and access to, the technology during the extended funding period.

5.24 Regardless of the duration of the variation requested, all applications will need to contain proposals for a phased allocation of funding.

5.25 For technologies for which the budget impact test is met, guidance executive will consider applications to vary the funding requirement, normally for up to a maximum of 3 years. In exceptional circumstances, a longer period may be considered.

5.26 Applications to vary the funding requirement are specific to each appraisal. However, when considering technologies with indications for which a treatment has already been recommended and a funding variation is in place, NICE will take into account the combined budget impact for both technologies, when considering an application for a funding variation for the second (and subsequent) technologies.

5.27 When guidance executive decides to vary the timescale for the funding requirement, this decision will be shared with consultees and commentators, including NHS England and the Secretary of State for Health and Social Care, for a 21 calendar day consultation period. The provisional decision will be published for information on the NICE website 7 calendar days later (see figure 10).

5.28 Comments received during consultation from consultees and commentators will be presented to guidance executive to reach a final decision on the timescale for the funding requirement. The decision and comments received will be published on the NICE website at the next appropriate step in the process.

5.29 The final guidance will refer to the variation to the funding requirement (when appropriate).

5.30 In line with the Regulations, consultees, including NHS England, can lodge an appeal against this decision.

5.31 As the decision to vary the timescale for the funding requirement is made by guidance executive, and not the appraisal committee, a representative of guidance executive will attend any appeal hearing on behalf of NICE.

Figure 10 Steps in the assessment of the application to vary the funding requirement

Figure 10 Steps in the assessment of the application to vary the funding requirement

Tools and resources

5.32 The implementation of the budget impact assessment within the appraisal process will not affect publication of the advice and tools to support the local implementation of NICE guidance. This includes resource impact tools or statements for most technology appraisals and additional tools for some technology appraisals.