The government is to hold talks with the pharmaceutical industry on the role of the National Institute for Heath and Clinical Excellence, in a bid to reach agreement on new pricing arrangements.

Negotiations on the introduction of the government’s flagship value-based pricing policy began last November but proposals for how it could work are still to emerge.

The Department of Health and the Association of the British Pharmaceutical Industry have agreed to hold parallel talks on issues that could have an impact on the policy, including the role of NICE.

Parts of the pharmaceutical industry have long criticised the way in which NICE operates.

The DH said it would share details of the scope of the discussions in “due course”.

ABPI chief executive Stephen Whitehead described the talks as a “win for all those concerned about medicines access”.

In an interview with HSJ, Mr Whitehead said the industry would like to see greater transparency from NICE about how it makes decisions, more patient involvement and power for the chief executive to overrule decisions made by its committees.

He said although he had lobbied against the introduction of the drugs guidance body in 1998 in his former role as European director of corporate affairs for Eli Lilly, he was now of the view it was necessary as it helped to champion innovation in the NHS.

“The ABPI has never had influence over any part of the NICE assessment process… We will now have influence over how that is shaped,” he said.

Value-based pricing was proposed in the 2010 white paper Liberating the NHS and was intended to end high-profile rows over NICE’s refusal to approve some drugs for use in the NHS and remove the need for the cancer drugs fund. This fund was set up by the government in 2011 to allow the use of drugs not approved by NICE.

The principle behind value-based pricing is that decisions on cost effectiveness will be based on a broader definition of value, taking into account wider benefits to society, such as whether a person can remain in work, and whether a drug is treating a previously unmet need.

An agreement must be reached by December when the 2009 pharmaceutical price regulation scheme, which caps the profits the industry can make from the NHS, expires. The government’s original plan was to replace the scheme with value-based pricing. HSJ understands the most likely options now are a renewed price regulation scheme with a value-based scheme running alongside it for new drugs, or some sort of hybrid of the two approaches.

Mr Whitehead said: “I don’t get hung up on names - what I want is a negotiated voluntary scheme which ensures we have the capacity to work within new requirements as we go forward.

“[Value-based pricing] was always positioned wrongly as the next big thing when the reality is pharmaceutical discovery doesn’t work like that and neither does pharmaceutical pricing.”

Mr Whitehead said the cancer drugs fund should continue “until an appropriate, other mechanism is proven to work”.

He added: “[Cancer] is not an area you would want to play with in a new system.”

A NICE spokeswoman said: “The potential introduction of value-based pricing will have a considerable impact on the way drugs are evaluated in the UK, therefore it is unsurprising that the DH would want to engage with the industry through the ABPI.”