NICE has implemented new measures to evaluate the cost-effectiveness of medicines, following a policy change that aims to give patients improved access to treatments.  

This follows the government’s decision to increase the thresholds that NICE can use in technology appraisals to £25,000 to £35,000 per quality-adjusted life year gained. 

Q: When will this change come into effect?   

The NICE manual has been updated, and the new thresholds are now in place. 

Q: What does this mean for those treatments already being assessed?

The threshold changes now apply to both new technology appraisals and those currently underway.

Where evaluations are underway, these will continue through our normal process with the independent evaluation committees applying the new thresholds.     

Q: Will you go back and re-appraise those you rejected on cost grounds?  

NICE does not routinely re-evaluate negative decisions and so the change to the threshold will not be applied retrospectively. The change will only apply to new medicines appraisals and those currently underway.

Companies can request a new appraisal where there is a good reason to do so, for instance if significant new evidence is available that is likely to have a material effect on the recommendations.

It is important to remember that NICE makes its recommendations based on a number of factors – and not just cost. The evidence on how well a treatment works is equally important.

Q: What about Highly Specialised Technologies (HSTs) for ultra-rare diseases?  

The changes apply to NICE’s standard cost-effectiveness thresholds used to develop Technology Appraisal (TA) guidance. We are not aware of any government proposals to change NICE’s cost-effectiveness thresholds used to evaluate HSTs for ultra-rare diseases.

Q: Are you changing the threshold for all NICE evaluations (digital, healthtech, guidelines) or just medicines? 

At this stage, the threshold change only applies to medicines and health technologies evaluated through a Technology Appraisal. We await further detail from government on whether this will be extended to cover all NICE guidance in the future.

Q: Will this increase the number of medicines NICE recommends? 

NICE already recommends 91% of the treatments it evaluates, around 70 per year. The changes should allow NICE to approve 3 to 5 additional medicines a year.  

Q: Will this lead to more expensive drugs being recommended?

We can, and do, already say yes to very expensive treatments if they work well and offer long term health benefit (for example, CRISPR gene editing medicine for sickle cell disease).

Our committees already take into account the scale of the benefits the treatment provides to people and to the health and care system, including any potential savings, which are taken into consideration alongside price.

Q: Why hasn’t the standard threshold changed before?

In a health service funded through general taxation, it is right that government decides on the level of health spend.

No government since NICE was created 26 years ago has decided to change the core cost effectiveness threshold. But they have permitted NICE to introduce significant upwards price flexibility so that for diseases that are the most severe, or those with fewest possible treatments, we can flex and adapt our methods to so that the NHS “pays” a higher price for those medicines than the base price.

• For treatments that can cure, like a treatment for neuroblastoma (an aggressive childhood cancer) we can use a different approach to valuing health costs and future health benefits, which means the NHS will pay prices that are ~10% higher on average than base.
• For diseases where there are significant health inequalities, we can reflect that in a higher price, such as with the recent gene editing technology for sickle cell.
• For ultra-rare diseases, we can pay up to 10 times higher than base – using a £100,000 to £300,000 per QALY gained threshold – to reflect the difficulty in creating medicines and generating evidence for very small patient populations.

In combination, these flexibilities mean that in the 2024 EFPIA WAIT report England ranked 6th out of 36 European countries for the availability of medicines.

FAQs about the EQ-5D-5L

What is the EQ-5D-5L? 

The EQ-5D is a short questionnaire used to understand how a person’s health affects their quality of life. It is used in health research and to help inform decisions about healthcare treatments. 

The questionnaire asks people to rate themselves across 5 areas of daily life:

• mobility (moving around),
• self-care (washing, dressing),
• usual activities (work, study, housework),
• pain or discomfort
• anxiety or depression.

For each area, people choose a response from either 3 or 5 options ranging from "no problems" to "extreme problems”. The questionnaire that uses 3 options is known as EQ-5D-3L and the one that uses 5 options is called EQ-5D-5L.

There are lots of other questionnaires that researchers can use to measure health-related quality of life, but the EQ-5D is NICE’s preferred measure.

What is a value set?

The responses from the EQ-5D-5L create a health profile that gets converted into a single number (called a ‘utility value’) using a mathematical model called a value set. The value set comes from asking the general public to judge how good or bad different health states would be.  

Utility values help healthcare decision-makers compare different treatments and understand their impact on health-related quality of life. They are combined with information about how a treatment extends length of life, which we express as quality-adjusted life years (QALYs). Utility values and QALYs are part of the information we use in cost-effectiveness models to assess whether a new treatment provides value for money to the taxpayer. In other words, whether its benefits justify its costs.

Will the new value set be introduced at the same time as the new thresholds?

No. Although the change to the value set was announced at the same time as the change to our thresholds, the timelines for adoption are different. We aim to start applying the new thresholds from April 2026 following the DHSC consultation earlier this year.

Before we can start applying the new EQ-5D-5L value set, the value set had to be published and we then need to run a consultation on changes to our methods before we publish updated manuals and implement the change. We expect this to take several months from when the value set was published.

What will the consultation include?

The consultation will include the proposed changes to our manuals and the results of two impact assessments, looking at how the EQ-5D-5L value set might affect:

• The outputs of the cost effectiveness models that NICE uses in our evaluations, including estimates of QALYs and incremental cost-effectiveness ratios.

• The number of decisions qualifying for the severity modifier, and how it changes absolute and proportional QALY shortfall estimates.

We have also considered whether the change to our methods will have any impact on health inequalities and we welcome comments on our conclusions. We will provide the necessary tools and resources to help stakeholders with their own impact assessments, including updated Technical Support Documents from the Decision Support Unit.

Have HTA organisations in other countries adopted their national EQ-5D-5L value set?

People’s perceptions of health-related quality of life vary across cultures and are affected by demographic differences, meaning that value sets are country specific.

Valuation studies for the EQ-5D-5L have been conducted in a number of countries, to provide data on how the country’s population values the different health states measured by the EQ-5D-5L. Several Health Technology Assessment (HTA) agencies have adopted their local EQ-5D-5L value set into their methodology, including Canada, France, the Netherlands, and Spain.

These agencies either accept the use of the EQ-5D-5L value set in economic evaluations or mandate that it should be used.

Sophie Cooper, senior scientific adviser at NICE, explains more about EQ-5D5-5L in her blog, 'Better data for better decisions.'