Government Confirms Changes To NICE Cost-Effectiveness Thresholds
The government has confirmed it will increase the thresholds used by the National Institute for Health and Care Excellence (NICE) when evaluating new medicines for NHS use, in a move designed to support the pharmaceutical sector and unlock innovation.
From April 2026, NICE will apply new cost-effectiveness thresholds of £25,000 to £35,000 per quality-adjusted life year (QALY), up from the current range of £20,000 to £30,000. The change follows government commitment to improve the operating environment for life sciences companies in the UK.
Dr Samantha Roberts, NICE chief executive, said:
The organisation’s reputation for robust and transparent guidance would remain unchanged as it works with independent committees to apply the new thresholds. She emphasised that in a health service funded by general taxation, it was appropriate for government to decide on health spending levels.
NICE currently recommends approximately 91% of the medicines it evaluates—around 70 per year. Analysis suggests the increased threshold could enable NICE to recommend an additional three to five new medicines or indications annually.
The assessments use QALYs to estimate health benefits, combining both length of life gained and quality of life improvements compared with existing treatments. For a medicine to be considered cost-effective under current thresholds, it should typically generate one additional year of perfect health for no more than £20,000-£30,000 over the cost of current care.
The announcement also includes government support for a new value set for assessing health-related quality of life, based on public judgements of different health states. This will be introduced alongside the EQ-5D-5L measure following peer review and publication.
NICE will apply the threshold changes to new technology appraisals and those currently underway. Evaluations already in progress where treatments are deemed not cost-effective under current thresholds will be paused if the new thresholds could alter the outcome, then reconsidered once NICE has the regulatory power to apply the changes.
