The National Institute for Health and Care Excellence (NICE) has called on pharmaceutical companies to question the development costs of new medicines.

In a letter to The Times, Sir Andrew Dillon, chief executive of NICE, acknowledged the expense of bringing new drugs to market, but said health services had to be confident that the extra benefits for patients justified the price.

Dillon was responding to a comment piece by the business editor at The Times, Ian King, who argued the NICE's decisions could influence the decisions of drug companies to locate in the U.K.

Sir Andrew's letter reads:

Sir,

Ian King (Business Commentary, 30 August) says that unless NICE stops restricting access to drugs because they are too expensive or they have too many harmful side effects for patients, the pharmaceutical industry will stop developing drugs in the U.K.

I suspect that the research and clinical environment here holds too many advantages for companies to do that, though it is certainly the case that there is a global market for life sciences R&D and the U.K. has to compete hard to win its share.

Mr. King quotes Jonathan Emms, the managing director of Pfizer in the U.K., who says that it costs £1.2 billion ($1.58 billion) to bring a new medicine to patients. Although this is a number that seems to go up each time it's estimated, it clearly is expensive to develop new drugs.

Companies are entitled to expect a return on their investment, but health services have to be confident that the extra benefit to patients justifies the price. It mostly does so, though sometimes at a stretch. If we are not sure, we have to say so, in the interests of all those of us who expect the NHS to apply its resources equitably across all of the demands we make of it.

NICE is, quite properly, scrutinized closely on its decisions and the methods we use to arrive at them. We have changed and improved over the decade and more that we have been advising the NHS. We are not perfect, but we are respected throughout the world for the quality of our work.

If it really does cost £1.2 billion ($1.58 billion) to develop a new drug, the question the pharmaceutical industry must be able to answer is this: are you absolutely confident that it needs to?

Andrew Dillon

Chief Executive

National Institute for Health and Care Excellence