Dr Alistair Blair discusses proposed changes to arrangements for access to new drugs and medical technologies

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Read this article to learn more about:

  • Quality Adjusted Life Years (QALYs)
  • how NICE uses QALYs to make decisions about new medical interventions
  • proposals from NHS England and NICE on changes to the arrangements for evaluating and funding drugs and other health technologies.

Key points

It is widely acknowledged that NICE does an excellent job; its role continues to be vital in the current NHS cost-constrained environment. Its Chief Executive, Sir Andrew Dillon, considers that since its inception in 1999, NICE has generally found the balance that reflects what the NHS is expected to do;1 however, the requirement for the NHS to deliver against a backdrop of increasing need and potentially significant reconfigurations should prompt us to re-evaluate the threshold for recommending treatments, which currently lies at £20,000–£30,000 per Quality Adjusted Life Year (QALY).2 A QALY is a measure combining health-related quality of life (QA), and length of life (LY) into a single measure of health gain—so that 1 year of perfectly healthy life for one person is one QALY.3


Key within this debate are two overriding principles:

  • the NHS has a fixed annual budget
  • if the NHS spends more on one thing, it has to do less of something else (the 'opportunity cost').

Research published in 2015 by Professor Carl Claxton on the current NICE cost-effectiveness threshold suggests that at present, every £13,000 of NHS resource spent adds one QALY.2 In pure economic terms, introducing new procedures and drugs at a greater cost per QALY (e.g. £30,000) could therefore do more harm than good, as the opportunity cost of introducing these new interventions would displace current effective healthcare, which makes up the majority of what the NHS does today. This possibility is further compounded by the recent evidence that NICE often approves new technologies at a cost of around £40,000 per QALY.4

Key factors

Many primary care and public health interventions have fantastically low costs per QALY, with smoking brief intervention alone having a cost per QALY of £732, and when combined with nicotine replacement therapy, just over £2000 per QALY.5 Are services like these being squeezed as we introduce new, more costly treatments?

At the same time as new treatments or evidence become available, the NHS can be slow to stop outmoded practices, as highlighted by the recent Academy of Medical Royal Colleges 'Choosing Wisely' campaign.6 How many unnecessary cholesterol checks are performed each year on people taking statins for primary prevention?

Similarly, a purely health economic argument ignores several other factors:

  • new treatments are by their very nature more expensive initially, with the costs falling over time
  • initiating new drugs and treatments in the NHS encourages UK-based research and manufacturing
  • some clinical conditions do indeed need very specific treatments.

New developments

NICE and NHS England have recently launched a consultation (now closed as of 13 January 2017). The aim of the proposals outlined in this consultation is for NHS England and NICE to better manage access to new drugs and medical technologies.7 It sensibly includes proposals to:7

  • 'fast track' the most promising new technologies with a cost-effectiveness ratio of less than £10,000 per QALY
  • set a total 'budget impact threshold' of £20 million to highlight the need for further dialogue where cost-effective initiatives would have significant impact on the whole NHS budget.

The consultation similarly (and logically) sets a proposed cost-effective threshold for treatments for very rare diseases, something that has not been done to date.7 However, the suggested level of £100,000 per QALY7 could be controversial, prompting debate about what indeed is 'very rare'; also, ultimately this threshold could be used by lobby groups as an example of overt precedent-setting of much higher funding levels for certain conditions.

What this consultation does not seek to address, however, is the fundamental question of what the current cost per QALY threshold should be for general drug or therapeutic interventions.


Failure to address the national question of what the Government, NHS bodies, clinicians, and public feel is the appropriate cost per QALY threshold in an open and transparent manner could give rise to more opportunity cost issues as the money gets progressively tighter over the next 4 years. This could lead to a greater need for local commissioners to introduce, often very appropriately in the author's opinion, a variety of local treatment thresholds. The expansion and plurality brought about by these local thresholds could necessitate a national policy to avoid the postcode-specific access to care that NICE was so successful in harmonising.

Perhaps now is the right time to fully re-evaluate what the NHS can and cannot afford to do, and fundamental to that is the cost per QALY threshold.

Key points

  • A QALY is a measure that combines health-related quality of life and length of life into a single measure of health gain
  • The current threshold at which NICE recommends treatments is £20,000-£30,000 per QALY
  • the NHS has a fixed annual budget; if it spends more on one thing, it has to spend less on something else (the 'opportunity cost'):
    • introducing new procedures and drugs at a greater cost per QALY could therefore do more harm than good
  • Alongside extending new treatments, the NHS can also be slow to stop outmoded practices
  • Other factors besides economic ones influence decisions about expensive new treatments
  • NICE and NHS England have launched a consultation about proposed changes to the management of new drugs and medical technologies:
    • these proposals do not however address the question of the appropriate cost per QALY threshold.

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  1. NICE website. Blog. Dillon A. Carrying NICE over the threshold. 19 February 2015. Available at: www.nice.org.uk/news/blog/carrying-nice-over-the-threshold (accessed 5 December 2016).
  2. Claxton K, Martin S, Soares M et al. Methods for the estimation of the National Institute for Health and Care Excellence cost-effectiveness threshold. Health Technol Assess 2015: 19 (14): 1–503.
  3. NICE website. Glossary—QALY. Available at: www.nice.org.uk/Glossary?letter=Q#QALY (accessed 5 December 2016)
  4. Dakin H, Devlin N, Feng Y et al. The influence of cost-effectiveness and other factors on NICE decisions. Health Econ 2014: 24 (10): 1256–1271.
  5. NICE. Judging whether public health interventions offer value for money. Local Government Briefing 10. NICE, 2013. Available at: www.nice.org.uk/advice/lgb10/chapter/Introduction
  6. Academy of Medical Royal Colleges. Forty treatments that bring little or no benefit to patients. London: AoMRC, 2016. Available at: www.aomrc.org.uk/wp-content/uploads/2016/10/Choosing_wisely_PR_211016-3.pdf
  7. NICE and NHS England. Proposals for changes to the arrangements for evaluating and funding drugs and other health technologies appraised through NICE's technology appraisal and highly specialised technologies programmes. Available at: www.nice.org.uk/about/what-we-do/our-programmes/nice-guidance/nice-technology-appraisal-guidance/consultation-on-changes-to-technology-appraisals-and-highly-specialised-technologies (accessed 5 December 2016) G