According to recent media reports, the UK government is preparing to increase the NICE cost-effectiveness threshold by 25%. Many people will be happy to hear this news. After all, NICE’s thresholds have not changed since they were set at a difficult-to-specify point in the early 2000s. This is good news for patients.
However, the decision was not made as a result of careful economic analysis or consideration of health system priorities. Instead, NICE’s cost-effectiveness benchmarks are being used as a bargaining chip to avoid President Trump’s threatened U.S. drug tariffs. These developments should serve as a wake-up call to health economists. In other words, our collective failure to solve the threshold-setting problem has left a vacuum that politics must fill.
According to PoliticoReports last week said UK government officials briefed the Trump administration on proposals to adjust NHS drug prices, a key element of which would be a 25% increase in NICE’s cost-per-QALY threshold of £20,000-£30,000. Last week too, times It published a commentary highlighting that the threshold has been stagnant for over 20 years and that its ‘real value’ (relative to inflation) has declined by 47% since 1999. While the economic rationale for reviewing the thresholds is sound, it is worrying that the most effective driver for change has become geopolitical pressures.
The lonely voice of health economics
Despite cost-effectiveness thresholds being fundamental to health technology assessment and clearly rooted in economic theory, there are significantly fewer researchers actively contributing to the public discourse on appropriate levels and governance, particularly in the UK. Don’t misunderstand. I’m glad to be one of the token researchers willing to tackle this topic, but I feel increasingly lonely. Thresholds determine which treatments NHS patients can access, but the UK’s academic health economics community has largely ceded this space to industry advocacy and political expediency.
Of course, it’s a complex topic, but its absence remains a mystery. Thresholds implement core economic concepts: opportunity cost, allocative efficiency, and welfare maximization under budget constraints. This is one of the few areas where economic analysis directly shapes health policy and access to care. For many years, research teams at the University of York and OHE have been exchanging publications to advance this field of research. These latest developments suggest that these two parties are not sufficient to support rational, evidence-based policy decisions.
The dangers of politicization
The current situation highlights why the HTA process must be insulated from political interference. Independence is a fundamental part of NICE’s success story. When cost-effectiveness thresholds become a negotiating tool in trade discussions, we abandon the principle that health resource allocation should optimize health outcomes according to some agreed-upon goal. Government briefings to U.S. officials represent a worrying precedent. Health coverage and reimbursement decisions may be shaped by foreign political pressures over domestic health needs.
Political processes, especially those involving international relations, involve different time scales and different incentives than those required by effective health system management. While trade negotiations prioritize immediate diplomatic wins, health systems require a long-term, stable, evidence-based approach to assessment and investment. Without an evidence-based approach, population health may deteriorate. And while a 25% increase in the threshold may seem like a win for the pharmaceutical industry, the inherent uncertainty and unpredictability of political cost-effectiveness thresholds is bad for business. Furthermore, the cost-effectiveness threshold does not determine a cap on company profits in the UK. To do that, we need to look at the following. VPAG.
The case of independent committees
In 2007, John Appleby, Nancy Devlin, and David Parkin presented an interesting idea. BMJ: Cost-effectiveness thresholds can be set by an operationally independent committee. This model could be similar to that of a Monetary Policy Committee, which would be independent from the UK Treasury and make decisions on the UK’s official interest rates. The independent threshold committee can:
- Regularly and transparently review empirical estimates of health opportunity costs.
- Systematically adjust thresholds for inflationary effects and changes in health system capacity.
- Provide clear, evidence-based justification for threshold levels.
Such a committee could prevent lobbying and political interference and maintain public trust through accountability and transparency. It’s time to revive this idea.
From a 2022 article: Applied Health Economics and Health PolicySome colleagues and I set off. Recommendations for policymakers You want to specify a cost-effectiveness threshold. This could serve as a starting point for defining the terms of reference of the independent committee.
call to action
Health economists must reclaim this space. We have a theoretical framework, heuristics, and analytical tools to inform threshold setting. However, we currently lack the participation and diversity needed to develop robust approaches to evidence generation and evidence-based policy making.
More health economists should pursue producing accessible research on appropriate threshold levels and potential health system impacts. We must engage more actively in policy consultations and public debate, and directly challenge political interference and oversimplified narratives. Research funders should facilitate this.
With the right foundation of research and evidence, we can advocate for institutional reform to protect NICE and other health technology assessment bodies from undue political interference. Recent developments show that without protection, cost-effectiveness standards can become pawns in short-term political games. This can only serve to undermine health technology assessment and ultimately harm the health of the population.
Britain’s current predicament must be seen as a catalyst for change. Regardless of whether NICE’s criteria need to be updated, such decisions should be made through careful analysis of health system constraints, population needs and the potential value of innovative technologies. Health economists have both the expertise and responsibility to ensure that this happens.
