A couple of decisions out of the U.K.'s National Institute for Health and Clinical Excellence (NICE) this week have different pharmaceutical companies smiling and frowning. Apparently, NICE, which is responsible for advising the government on which drugs it should pay for, is only nice to some drugmakers.

First, the bad news: NICE recommended against paying for Johnson & Johnson (NYSE: JNJ) and Merck's (NYSE: MRK) Simponi for treating psoriatic arthritis. Simponi is a follow-on to Johnson & Johnson's Remicade, but NICE said that it didn't work as well for psoriatic arthritis as Amgen (Nasdaq: AMGN) and Pfizer's (NYSE: PFE) Enbrel. Cost was also listed as one of the factors against recommending the drug. If Johnson & Johnson and Merck are willing to lower the cost, NICE might reconsider, as it has for other drugs.

On the flip side, NICE has reversed its stance on certain Alzheimer's drugs. Where it once limited their use to patients with moderately advanced forms of the disease, now NICE recommends allowing patients to begin use of Aricept from Eisai and Pfizer, Shire's (Nasdaq: SHPGY) Reminyl, and Novartis' (NYSE: NVS) Exelon even when the disease is still in its mildest stages. Again, efficacy and price were a factor. More data supporting earlier use, plus the realization that not taking the drugs creates health-care costs in other areas, led NICE to change its mind.

NICE only controls the payment for drugs in one country, so a yes or no decision from them, or a negotiation on the price, isn't the end of the world for drugmakers. But investors should be concerned about worldwide pricing in general, especially since it’s the top argument in favor of health-care reform stateside.

The obvious, albeit most controversial, solution for reducing prices is to discourage the use of high-priced medications when cheaper options are available, or when the drug doesn't work well enough to justify the price. Americans have grown accustomed to doctors and patients making medical decisions with little oversight, which has helped the drug industry flourish. If that process changes, drugmakers' prosperity may, too.

That certainly wouldn't be nice for share prices.

Pfizer is a Motley Fool Inside Value selection. Novartis is a Motley Fool Global Gains recommendation. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletter services free for 30 days.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool owns shares of Johnson & Johnson and has a disclosure policy.