Proposals to extend the work of the National Institute for Health and Clinical Excellence would cost just £1m extra a year, or 3.5 per cent of its budget, its chief executive Andrew Dillon has estimated.

Mr Dillon said he welcomed the Commons health select committee's recommendations that NICE evaluate all newly licensed drugs for their cost-effectiveness (for more background, click here).

At present NICE assesses around 30-40 per cent of newly licensed drugs. Mr Dillon said those were the most complicated and controversial and evaluating the rest would be a relatively small extension of the institute's work.

Mr Dillon said he was pleased that MPs had recommended that the Department of Health be more active in pushing the implementation of NICE guidance.

"I don't have the power to go and beat primary care trust chief executives up about this. But the DH does, it just chooses not to do so," Mr Dillon said at a meeting with health journalists last week.

"The committee said that the government should give clear directions for implementing NICE guidance over a given period of time. Otherwise it's almost inevitable that some will be pushed to the back," he said. "If the NHS implemented NICE guidance uniformly across the system it would without a doubt be the best healthcare system in the world."

The committee also recommended that the cost threshold used by NICE of£30,000 for each additional year of full health be reviewed by an independent body and possibly set in relation to the overall NHS budget. Mr Dillon told HSJ that would be feasible in theory. The threshold could be set and periodically reviewed by a committee of academics, he said, such as the body that reviews the formula for allocating resources to PCTs.

For more analysis, see Michael White's latest opinion piece