Pfizer Ltd., R (on the application of) v Secretary of State for Health

Article 7 of the Transparency Directive requires Member States to publish objective and verifiable criteria governing restrictions on NHS reimbursement of medicinal products. It does not require the decision-maker, in every individual case, to undertake or explain a detailed comparative analysis of competing treatments or NHS priorities.

Affordability, understood as the allocation of finite NHS resources between competing priorities, is an essentially political judgment. Unless an agreed ethical and rational framework for comparing such priorities exists, a reviewing court should not require an artificial ranking exercise or substitute its own assessment for that of the Secretary of State.

The Secretary of State restricted NHS prescribing of sildenafil and other impotence treatments under powers conferred by the National Health Service Act 1977. Following consultation, he decided to maintain the restrictions. Pfizer sought judicial review, contending that the reasons failed to satisfy Article 7.3 of Council Directive 89/105/EEC because they did not compare impotence treatment with other non-life-threatening conditions.

Turner J dismissed the claim on the merits and for delay. Permission was later adjourned so that the delay issue could be considered by the Full Court. The Court of Appeal treated the matter as an appeal, heard the merits, and addressed whether Article 7 required the proposed comparative analysis.

1. The appeal was dismissed. The Court did not determine the separate issue of delay, having found the merits sufficient to dispose of the challenge. The appellant was ordered to pay the respondent’s costs.

2. Article 7 of Council Directive 89/105/EEC concerns the transparency of national pricing and reimbursement arrangements. Its requirements are directed principally to the publication and communication of the criteria used by Member States. It does not require every individual decision applying those criteria to contain a detailed exposition of the merits, economics, or comparative priority of the treatment concerned.

3. The United Kingdom criterion permitted restrictions where the forecast aggregate cost of wider NHS provision could not be justified having regard to all relevant circumstances, including NHS expenditure priorities. That criterion was objective and verifiable for the purposes of Article 7. Its application did not require a league table ranking every treatment for every condition.

4. Simon Brown LJ held that affordability in the context of competing NHS priorities was an essentially political decision. In the absence of an explicit ethical and rational framework capable of comparing different areas of NHS expenditure, requiring such a comparison through judicial review would be artificial and inappropriate. NICE-style cost-effectiveness or QALY analysis could not determine which diseases or conditions should receive higher priority.

5. Buxton LJ explained that the Directive’s context was the prevention of disguised restrictions on intra-Community trade. The approach in Duphar supported the conclusion that published criteria based on the legitimate aim of improving the economics of a state health system could satisfy the Directive. Carnwath LJ agreed with both judgments.

6. The Court noted, without deciding the delay issue, that R v Secretary of State for Trade and Industry (ex parte Greenpeace) would need to be reconsidered in light of R v London Borough of Hammersmith & Fulham (ex parte Burkett). Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): The Court treated the application as an appeal and dismissed it on the merits. It did not determine the delay issue. Permission to appeal to the House of Lords was refused.
• High Court of Justice, Queen’s Bench Division: Turner J refused judicial review on the merits and for delay.