A 2004 retrospective study of the National Institute of Health and Care Excellence (NICE) past cost-effectiveness appraisal decision making identified a hypothetical cost-effectiveness ceiling ratio between £20,000 to £30,000 per quality adjusted life year (QALY) gained. Over a decade has passed since this article was published yet there is no evidence that this threshold has changed over time, leading to growing discussion over its static nature.

Analysis

A static range is of benefit to NICE and the NHS as it allows for cost containment over time, threatening new drugs with negative reimbursement, ensuring industry prices new drugs competitively. It also provides stability for the pharmaceutical industry who rely on knowledge of cost-effectiveness threshold ranges when researching and developing their pipeline and understanding the likelihood of future reimbursement. Static interpretation of cost-effectiveness thresholds could be seen to be inappropriate however due to growth in inflation since identification of this threshold range. According to Bank of England’s inflation rate data, inflation was 2.9% on average between 2004 and 2016, therefore a range of £20,000 to £30,000 per QALY should have expanded to £28,179 to £42,267 to account for changes in the costs of living over time. Conversely, it could be argued that dynamic NICE thresholds are inappropriate themselves as expected improvements in the industry’s productive and research efficiency could cancel out growth in inflation and therefore any changes to the ceiling ratio in sympathy. Movement towards multi-criteria decision analysis frameworks or the dynamic World Health Organisation (WHO) gross domestic product (GDP) approach to ceiling thresholds may provide the transparency in threshold setting that the current NICE approach lacks.

Conclusion

NICE should be considering augmentation of its cost-effectiveness thresholds to reflect growth in the costs of living since its original ceiling threshold was identified over a decade ago.