The UK government is reportedly preparing to raise NICE's cost-effectiveness threshold by 25%, as a bargaining chip to avoid US pharmaceutical tariffs. It's time for health economists to reclaim this space and defend evidence-based decision-making.
Recent media reports have suggested that the UK government is preparing to increase the NICE cost-effectiveness threshold by 25%. Many will rejoice at this news; NICE’s threshold, after all, has not changed since it was set at some difficult-to-pin-down point in the early noughties. This may well be good news for patients.
However, the decision has not come as a result of careful economic analysis or consideration of health system priorities. Instead, NICE’s cost-effectiveness threshold is being used as a bargaining chip to avoid US pharmaceutical tariffs threatened by President Trump. This development should serve as a wake-up call to health economists: our collective failure to solve the problem of threshold-setting has created a vacuum for politics to fill.
According to POLITICO, reporting last week, UK government officials have briefed the Trump administration on proposals to fiddle NHS drug pricing, with the core element being a 25% increase to NICE’s £20,000-£30,000 cost-per-QALY threshold. Also last week, The Times published commentary highlighting that the threshold has remained stuck for over 20 years, with its ‘real value’ (relative to inflation) declining by 47% since 1999. The economic case for reviewing the threshold is sound, but it is concerning that the most effective driver for change has become geopolitical pressure.
Lonely voices of health economics
Despite cost-effectiveness thresholds being fundamental to health technology assessment, and clearly rooted in economic theory, remarkably few researchers actively contribute to public discourse on their appropriate level and governance, especially in the UK. Don’t get me wrong, I get a kick out of being one of the token researchers willing to address this topic, but it gets lonely. The threshold determines which treatments NHS patients can access, yet the academic health economics community in the UK has largely ceded this space to industry advocacy and political expediency.
Sure, it’s a complicated topic, but the absence is still puzzling. Thresholds embody core economic concepts: opportunity cost, allocative efficiency, and welfare maximisation under budget constraints. They constitute one of the few areas where economic analysis directly shapes health care policy and access to care. For many years, research teams from the University of York and OHE have traded publications to further this area of research. These latest developments suggest that this party of two has not been enough to support sensible evidence-based policymaking.
The danger of politicisation
The current situation exemplifies why HTA processes must be insulated from political interference. Independence is a fundamental part of NICE’s success story. When cost-effectiveness thresholds become negotiating tools in trade discussions, we abandon the principle that health resource allocation should optimise health outcomes according to some agreed objectives. The reported government briefing to US officials represents a concerning precedent; that health care coverage and reimbursement decisions can be shaped by foreign political pressure over domestic health needs.
Political processes, particularly those involving international relations, operate on different timescales and involve different incentives to those demanded by effective health system management. Trade negotiations prioritise immediate diplomatic wins, while health systems require long-term, stable, evidence-based approaches to evaluation and investment. Without evidence-based approaches, population health can suffer. And while a 25% increase in the threshold may seem like a win for the pharmaceutical industry, the inherent uncertainty and unpredictability of a politicised cost-effectiveness threshold is not good for business. Besides, cost-effectiveness thresholds don’t determine the ceiling for company revenue in the UK; for that, we must look to the VPAG.
The case for an independent committee
Back in 2007, John Appleby, Nancy Devlin, and David Parkin floated an interesting idea in the BMJ: cost-effectiveness thresholds could be set by an operationally independent committee. The model could be similar to that of the Monetary Policy Committee, which is responsible for making decisions about the UK’s official interest rate, with independence from HM Treasury. An independent threshold committee could:
- Conduct regular, transparent reviews of empirical estimates of health opportunity costs
- Adjust thresholds systematically for inflationary effects and health system capacity changes
- Provide clear, evidence-based justification for threshold levels
Such a committee would guard against lobbying and political interference, and could maintain public trust through accountability and transparency. Now is the time to revive this idea.
In a 2022 article in Applied Health Economics and Health Policy, some colleagues and I set out recommendations for policymakers seeking to specify cost-effectiveness thresholds. This could be the starting point for defining the terms of reference for an independent committee.
A call to action
Health economists need to reclaim this space. We have the theoretical frameworks, empirical methods, and analytical tools to inform threshold-setting. But we currently lack engagement and the kind of plurality that’s necessary to develop robust approaches to evidence generation and evidence-based policymaking.
More health economists need to pursue the production of accessible research on appropriate threshold levels and the potential health system impacts. We need to participate more actively in policy consultations and public debates, and we should directly challenge political interference and over-simplified narratives. Research funders must facilitate this.
With the right foundation in research and evidence, we can advocate for institutional reform to protect NICE and other health technology assessment agencies from unjustified political interference. Recent developments show us that, without protection, cost-effectiveness thresholds can become pawns in short-term political games. This can only serve to undermine health technology assessment and, ultimately, harm population health.
The UK’s current predicament should be taken as a catalyst for change. Whether or not NICE’s threshold needs updating, such decisions must emerge from 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 this happens.
