Updated/posted: October 2008
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Description of Health Care System

The United Kingdom (UK)’s healthcare system is primarily public, with 80% of funding coming from taxation, 12% from national insurance, 4% from charges and miscellaneous, 3% from Trust interest receipts and 1% from capital receipts (European Observatory on Health Care Systems 2002).

Although the UK has relatively low private insurance coverage compared with countries such as the US, there is now an increasing role for private healthcare in the UK, in the form of healthcare financing and delivery.

The UK public healthcare system is relatively complex, with a range of different trusts and authorities delivering and impacting on healthcare provision.

Approximately three-quarters of the UK National Health Service (NHS) budget goes to the Primary Care Trusts (PCTs), who are responsible for delivering health care and health improvements within a local area. PCTs are grouped into regional Strategic Health Authorities (SHAs); these groups help develop local NHS strategy and provide a link between PCTs and the national Department of Health.

PCTs have their own budgets and set their own priorities, within the overriding priorities and budgets set by the relevant Strategic Health Authority and ultimately the national Department of Health. PCTs provide a range of community health services, including: funding for general practitioners, medical prescriptions, and commissioning of hospital and mental health services, as such they are considered key stakeholders in healthcare decision making. For example, drug formularies are developed locally by PCTs and NHS Trusts. PCTs adapt these formularies to contain costs and remain in budget.

In the UK there are few direct drug pricing controls, and the reimbursement mechanism is different to many other European countries. The branded drug price is set using the Pharmaceutical Price Regulation Scheme (PPRS) and the drug is then reimbursed by the NHS according to the manufacturer’s list price.

Government drug spending is affected by patient co-payment (in the form of prescription charges), a claw back system operated by the government for community pharmacies and discounting to hospital pharmacies. However, these are not key pricing and reimbursement tools as exist in other countries.

Once a drug is on the market, generic competition and parallel importation are the greatest factors affecting price, however, there are a large number of additional strategies designed to ensure value for money and efficiencies in health care provision. These exist at all levels throughout the NHS.

National Service Frameworks (NSFs) set evidence-based national standards for a number of therapy areas and, as a result, impact on prescribing practice, PCT budgets and overall NHS expenditure. For example, the cost of drugs for diabetes has risen sharply following publication of the NSF for diabetes.

In the primary care setting, GP practices are becoming increasingly autonomous in the purchase of pharmaceuticals. There are a range of incentives in place in this setting that are increasingly influencing prescribing practice.

Value for money at the national level is commonly assessed through a process of Health Technology Assessment (HTA).

Health Technology Assessment (HTA) in the UK

The UK is made up of England, Scotland, Wales and Northern Ireland.  Each of these countries has its own approach to HTA.  A separate description of the process in Scotland and the Scottish Medicines Consortium (SMC) is provided as part of this roadmap.  Here we describe the methods of the National Institute for Health and Clinical Excellence (NICE) and All Wales Medicines Strategy Group (AWMSG).  NICE and the National Coordinating Centre for Health Technology Assessment (NCCHTA) are the key national HTA organizations for England, Wales and Northern Ireland.

NICE conducts appraisals and develops guidelines (http://www.nice.org.uk/)

NCCHTA manages, and develops the NHS HTA program. (http://www.hta.nhsweb.nhs.uk/).

NICE is an independent organization that was established as a Special Health Authority in 1999 and is responsible for providing national guidance on the promotion of good health and the prevention and treatment of ill health.

NICE was established to produce national guidance on specific health technologies including both medicines and medical devices (through its Technology Appraisal process) and clinical practice (through its Guidelines development process). It has subsequently assumed additional responsibilities for public health.

Since January 2002, it has been a mandatory requirement for NHS organizations in England and Wales to provide funding for medicines and treatment recommended by NICE in its Technology Appraisal guidance. Furthermore, NHS organizations must review clinical management following publication of NICE clinical guidelines.

There is evidence that NICE guidance is also referred to by other countries, often because of the perceived robust methodology of their review process and also because their guidance can be available before a drug has gained approval in another country.

NICE can influence the growth of drugs already on the market. The NICE appraisal of statins for the prevention of cardiovascular events is estimated to have increased prescription volume of these agents by 2.5% (PPA Update, 2006)

A number of issues have been identified that occur before and after the publication of NICE guidance, which can affect patient access to medicines.

NICE blight refers to when prescribers defer prescribing or the inclusion of an intervention on their formulary until after NICE guidance is published.

Postcode prescribing refers to how location differences can affect adaptation of NICE recommendations.

Reimbursement and Pricing Approval Process


In contrast to the methods of healthcare evaluation in other countries, NICE does not evaluate all interventions as they reach the market. NICE has published guidelines on how it will select interventions for review; this includes:

  • Is the technology likely to result in a significant health benefit, taken across the NHS as a whole, if given to all patients for whom it is indicated?
  • Is the technology likely to result in a significant impact on other health related government policies (e.g. reduction in health inequalities)?
  • Is the technology likely to have a significant impact on NHS resources (financial or other) if given to all patients for whom it is indicated?
  • Is the Institute likely to be able to add value by issuing national guidance? For instance, in the absence of such guidance is there likely to be significant controversy over the interpretation or significance of the available evidence on clinical and cost effectiveness?
Health technologies can be appraised by NICE via two routes:
  1. Multiple Technology Appraisal (MTA): MTAs examine a disease area or class of drugs and contain either new evidence gathered after the launch of a drug or include new economic modelling. The MTA process is based on input from a broad range of stakeholders, with emphasis on the Assessment Group who critically reviews the available evidence and produces an Assessment Report. The Assessment Group comprises a panel of independent, academic experts from one of a number of academic centres that is commissioned by the NCCHTA.
  2. Single Technology Appraisal (STA): STAs have been developed to provide early guidance for new drugs targeting a single indication, as well as for new indications for drugs already on the market. This process has been developed to reduce the effect of NICE blight and drugs thought to improve life expectancy are likely to be prioritised. This process is more streamlined that the MTA process, with greater emphasis on the submission of evidence from the manufacturer. An Evidence Review Group is commissioned to evaluate manufacturer’s submissions and inform the Appraisal Committee.

Both the MTA and STA processes consider evidence on the health effects, costs and cost-effectiveness of a health technology.  The MTA process is based on evidence from any number of registered consultees, including manufacturers, healthcare professionals and patient/carer representatives.  NICE provides clear guidance on their expectations of what should be included in an MTA submission, which is available on the website.  In contrast, the principal source of evidence for the STA is the manufacturer’s submission and its content is primarily dictated by a prescriptive template supplied by NICE.  For both MTA and STA processes the major sections of information required include: Background, Clinical evidence, Cost-effectiveness and Impact on the NHS.  NICE has published on its website a series of guides on the Technology Appraisal process, including details of: timelines, stakeholders and the preparation of submissions for both the MTA and STA processes.

All Wales Medicines Strategy Group (AWMSG):

The AWMSG has been established to advise the Welsh Assembly of future developments in healthcare to assist in its strategic planning; develop timely, independent and authoritative advice on new drugs and on the cost implications of making these drugs routinely available on the NHS; advise the Assembly on the development of a prescribing strategy for Wales and advise the Assembly on the implementation of a range of strategic Prescribing Task and Finish Group recommendations.

Initially the AWMSG appraisal process focused on high-cost medicines (i.e. those costing >£2000 per patient per annum), but has now increased its capacity to conduct up to a total of 32 appraisals per year.  These comprise appraisals of not only high-cost medicines, but also new cardiac and cancer medicines.  

Manufacturers must submit a Form A as an ‘intention to submit’.  The AWMSG Steering Committee uses this information to decide whether the product requires full appraisal.  The timing of submission of Form A is the decision of the manufacturer.  The AWMSG aims to make a recommendation as soon as possible after the launch of the product.  Form A should be completed regardless of whether a submission has been forwarded to SMC or NICE.
If AWMSG Steering Committee decides a full appraisal is required the manufacturer must submit Form B.  Form B provides comprehensive information and is used by the AWMSG, together with additional relevant information, in the preparation of their assessment report. In contrast to the NICE process, the AWMSG appraisal meeting is held in public.

Full details of the process, timelines and templates for Form A and B are available on the AWMSG website at www.wales.nhs.uk/awmsg/.
AWMSG aims is to make a recommendation soon after the launch of a product and the timescales involved require the submission to be made ahead of product launch.

AWMSG acknowledges the NICE future work program, including the STA process, when considering whether a product will be appraised. AWMSG will not normally consider appraising a product if NICE intend to publish their final appraisal of the same product within an 18 month period from receipt of AWMSG Form A. AWMSG guidance is interim to NICE guidance should this be subsequently published.


A separate description of the process in Scotland and the SMC is provided as part of this roadmap.


  • ADTC: Area Drug and Therapeutic Committees
  • AWMSG: All Wales Medicines Strategy Group
  • HTA: Health Technology Assessment
  • MTA: Multiple Technology Appraisal
  • NCCHTA: National Coordinating Centre for Health Technology Assessment
  • NHS: National Health Service
  • NHS: QIS NHS Quality Improvement Scotland
  • NICE: National Institute for Health and Clinical Excellence
  • NSF: National Service Framework
  • PCT: Primary Care Trust
  • PPRS: Pharmaceutical Price Regulation Scheme
  • SHA: Strategic Health Authority
  • SMC: Scottish Medicines Consortium
  • STA: Single Technology Appraisal


  1. European Observatory on Health Care Systems, Health care systems in eight countries: trends and challenges, April 2002 p 108.
  2. PPA Update (2006). Update on growth in prescription volume and cost year to March 2006.

Reimbursement Organizations/HTA Organizations

NICE conducts appraisals and develops guidelines (http://www.nice.org.uk/)

NCCHTA manages, and develops the NHS HTA program. (http://www.hta.nhsweb.nhs.uk/).

Suggested Reading

  1. ÖBIG (2006). Surveying, Assessing and Analysing the Pharmaceutical Sector in the 25 EU Member States. Available at: http://ec.europa.eu/comm/competition/mergers/studies_reports/oebig.pdf
  2. Robinson R, Dixon A. . Health care systems in transition: United Kingdom. Copenhagen, WHO Regional Office for Europe on behalf of the European Observatory on Health Systems and Policies, 1999. Available at: http://www.euro.who.int/document/e68283.pdf
  3. Macarthur. Pharmaceutical Pricing and Reimbursement in the United Kingdom. HEPAC Health Economics in Prevention and Care 2000; 1(1):47–50.

Useful Links

Global Health Care Systems Main Page