Irish legislation recognises the need to consider the cost-effectiveness of health services, both for new interventions and their opportunity cost. Ireland did not have an explicit cost-effectiveness threshold until a 2012 agreement between the pharmaceutical industry and government established a €45,000/QALY threshold. It was agreed as part of a deal that provided cost savings on existing medications and only applies to pharmaceuticals: there is no official threshold for non-drug interventions. Drugs with cost-effectiveness ratios within the threshold are guaranteed reimbursement, whereas those exceeding the threshold may be approved following further negotiation. A number of drugs far exceeding the threshold have been reimbursed in Ireland in recent years. There are four reasons for concern regarding Ireland’s threshold. Firstly, as a price floor not a ceiling it offers only a weak constraint on the introduction of cost-ineffective interventions, which leaves little scope for positive net health benefit. Secondly, that the threshold only applies to drugs creates potential for inconsistencies whereby relatively cost-effective non-drug interventions may not necessarily be approved, leading to sub-optimal resource allocation. Thirdly, the current threshold has no apparent empirical basis. Finally, recent efforts to determine the appropriate cost-effectiveness threshold in the UK have estimated a threshold of approximately £13,000/QALY. Assuming Ireland’s threshold should be broadly comparable, the current Irish threshold is most probably too high. Consequently, reimbursing new interventions at and above the €45,000/QALY threshold is likely to result in net harm, as new drugs produce less health than the interventions they displace. The failure of Ireland’s threshold to be empirically determined by the cost-effectiveness of services foregone means the requirements of current legislation are not being met and reimbursement decisions cannot be considered fully evidenced-based. It is likely the current threshold is excessive and will lead to systematic damage of the health system.