The NICE Cost-Effectiveness Threshold
- 2.3k Downloads
The National Institute for Health and Clinical Excellence (NICE) has been using a cost-effectiveness threshold range between £20 000 and £30 000 for over 7 years. What the cost-effectiveness threshold represents, what the appropriate level is for NICE to use, and what the other factors are that NICE should consider have all been the subject of much discussion. In this article, we briefly review these questions, provide a critical assessment of NICE’s utilization of the incremental cost-effectiveness ratio (ICER) threshold to inform its guidance, and suggest ways in which NICE’s utilization of the ICER threshold could be developed to promote the efficient use of health service resources.
We conclude that it is feasible and probably desirable to operate an explicit single threshold rather than the current range; the threshold should be seen as a threshold at which ‘other’ criteria beyond the ICER itself are taken into account; interventions with a large budgetary impact may need to be subject to a lower threshold as they are likely to displace more than the marginal activities; reimbursement at the threshold transfers the full value of an innovation to the manufacturer.
Positive decisions above the threshold on the grounds of innovation reduce population health; the value of the threshold should be reconsidered regularly to ensure that it captures the impact of changes in efficiency and budget over time; the use of equity weights to sustain a positive recommendation when the ICER is above the threshold requires knowledge of the equity characteristics of those patients who bear the opportunity cost. Given the barriers to obtaining this knowledge and knowledge about the characteristics of typical beneficiaries of UK NHS care, caution is warranted before accepting claims from special pleaders; uncertainty in the evidence base should not be used to justify a positive recommendation when the ICER is above the threshold. The development of a programme of disinvestment guidance would enable NICE and the NHS to be more confident that the net health benefit of the Technology Appraisal Programme is positive.
KeywordsHealth Gain Appraisal Committee Positive Recommendation Public Sector Activity Technology Appraisal Programme
This paper was initially prepared as a briefing paper for NICE as part of the process of updating the Institute’s 2004 Guide to the Methods of Technology Appraisal. The work was funded by NICE through its Decision Support Unit (DSU), which is based at the universities of Sheffield, Leicester, York, Leeds and at the London School of Hygiene and Tropical Medicine.
C. McCabe has worked with and for many stakeholders in the NICE appraisal process, including pharmaceutical companies, patient groups and NHS organizations.
The authors thank Louise Longworth, Carole Longson, David Barnett and members of the DSU for constructive comments on earlier versions of this paper.
- 1.NICE guide to the methods of health technology appraisal. London: NICE 2004Google Scholar
- 2.The use of thresholds: discussion. In: Towse A, Pritchard C, Devlin N, editors. Cost effectiveness thresholds: economic and ethical issues. London: King’s Fund and Office of Health Economics, 2002: 38Google Scholar
- 4.Culyer AJ. Introduction. In: Towse A, Pritchard C, Devlin N, editors. Cost effectiveness thresholds: economic and ethical issues. London: King’s Fund and Office of Health Economics, 2002: 9–15Google Scholar
- 9.Loomes G. Valuing life years and QALYs: transferability and convertibility of values across the UK public sector. In: Towse A, Pritchard C, Devlin N, editors. Cost effectiveness thresholds: economic and ethical issues. London: King’s Fund and Office of Health Economics, 2002: 46–55Google Scholar
- 10.Williams A. What could be nicer than NICE? London: Office of Health Economics, 2004Google Scholar
- 12.Devlin N. An introduction to the use of cost effectiveness issues in decision making: what are the issues? In: Towse A, Pritchard C, Devlin N, editors. Cost effectiveness thresholds: economic and ethical issues. London: King’s Fund and Office of Health Economics, 2002: 16–25Google Scholar
- 18.National Institute for Health and Clinical Excellence. Framework document [online]. Available from URL: http://www.nice.org.uk/NICEmedia/pdf/appendixB_framework.pdf [Accessed 2008 Jul 18]Google Scholar
- 20.Friedman M. Lectures in price theory. Chicago (IL): Aldine, 1971Google Scholar
- 22.Appleby J, Devlin N, Parkin D, et al. Searching for local NHS cost effectiveness thresholds: a feasibility study. NICE conference; Manchester; 2007 Dec 5–6 [online]. Available from URL: http://www.nice2007.co.uk/ApplebyDevlin.pdf [Accessed 2008 Jul 17]Google Scholar
- 23.Martin S, Rice N, Smith P. Further evidence on the link between health care spending and health outcomes in England [CHE discussion paper 32]. York: University of York, 2007Google Scholar
- 24.National Institute for Health and Clinical Excellence. NICE launches commissioning guides as part of an initiative to help NHS reduce spend on ineffective treatments [online]. Available from URL: http://www.nice.org.uk/newsevents/infocus/nice_launches_cornmissioning_guides_as_part_of_an_initiat ive_to_help_nhs_reduce_spending_on_ineffective_treatments.jsp [Accessed 2008 Jul 17]Google Scholar
- 25.Association of Directors of Public Health. Letter from the President: patient charges for treatment. ADPH 2007 Jan [online]. Available from URL: http://www.adph.org.uk/press_releases/20070131.php?PHPSESSID=Ijftq9htaji5qglme2i3a01nlh5 [Accessed 2008 Jul 17]Google Scholar
- 26.House of Commons Health Committee. National Institute for Health and Clinical Excellence: first report of session 2007–08. Vol. 1. London: The Stationary Office, 2008 JanGoogle Scholar
- 27.Rawlins M. The future for NICE (National Institute for Health and Clinical Excellence). Pharm J 2007; 278 (7452): 589Google Scholar
- 28.National Institute for Health and Clinical Excellence. NICE response to the committee’s first report of the session 2007–2008 HSC 550. London: The Stationary Office, 2008 JunGoogle Scholar