NICE’s cost-effectiveness threshold will rise in April 2026, for the first time in 20 years. This raises important questions to consider as we approach the change and in the years that follow.
Overview
Starting in April 2026, NICE will raise its cost-effectiveness threshold for the first time in 20 years. By its own estimates, the shift from £20,000-£30,000 per quality-adjusted life year (QALY) to £25,000-£35,000 per QALY will result in three to five more medicines recommended each year.
At the heart of the matter is a structural challenge: NICE guides decisions about which medicines should be funded by the NHS, ensuring these decisions are rooted in evidence. Applying the same decision rule across interventions helps ensure consistency and predictability in these funding decisions.
Now, ministers are taking control over the decision-making threshold itself. As elected representatives, arguably, they should: the threshold ought to reflect societal priorities and preferences—not only for health gain, but also for wider public objectives such as attracting innovation and supporting economic growth.
This historic change was announced as part of a trade agreement with the United States promising 0% tariffs on UK pharmaceutical exports to the United States—but questions remain. Will the accompanying commitment to increase medicines spend from 0.3% of GDP to 0.6% of GDP crowd out other NHS spending commitments? What impact will a 25% threshold increase have on the NHS and for patients? Did any evidence underscore the £25,000-£35,000 number, and critically, if future threshold changes occur, how and when will they be calculated?
The following Insight draws on OHE’s response to the government’s proposal to give ministers power to set the relevant cost-effectiveness threshold through secondary legislation. It also raises important questions to consider as we approach the cost-effectiveness threshold increase in April and beyond.
Reviewing the threshold change: A step in the right direction, but questions remain
The cost-effectiveness threshold change was announced in the context of the US-UK trade deal negotiated in December 2025. As part of the deal, the UK will increase its NHS medicine spend in return for a preferential tariff rate of 0% for all UK pharmaceutical exports for at least 3 years.
This timeline raises the prospect of a review of the cost-effectiveness threshold in three years’ time and establishes a valuable precedent. Cost-effectiveness thresholds should evolve with changing health system constraints and not remain static as has been the case with the original NICE £20,000-£30,000 threshold that has been unchanged in the 20-year history of the appraisal body. This presents an opportunity – and arguably a need – to develop more transparent, systematic, and evidence-based processes for future threshold-setting.
OHE welcomes the introduction of a formal mechanism for changing the cost-effectiveness threshold, which is an important step in ensuring that resource allocation decision-making can adapt to changes in the wider policy, economic, and societal context. Establishing an explicit process for this and any future threshold changes has the potential to improve trust among stakeholders.
However, the ministerial consultation would benefit from greater clarity on how changes to the cost-effectiveness threshold are expected to affect NICE decision-making in practice. More detail is needed on what aspects of the threshold will be subject to change and how these changes will be operationalised within NICE’s methods.
The threshold should apply to all types of health technologies (including devices, digital technologies, etc) and not only new medicines. However, the intention is unclear with respect to the specification of thresholds other than the ‘standard cost-effectiveness threshold’ (i.e. £20,000-£30,000). For instance, it is not clear whether this proposal implies:
- A single threshold applied across all technologies and guidance (including highly specialised technologies, or HST),
- the government would set separate and potentially different thresholds for different types of NICE programmes, or
- maintaining existing relative differences between thresholds if the standard threshold changes.
Without clarity on how this proposal would interact with existing frameworks, especially for HSTs, it is difficult to assess the implications for consistency, fairness, and decision-making.
Ensuring accountability is paramount
Consultation plays an important role in maintaining transparency, accountability, and trust in decision-making processes. If changes to procedures or methods (beyond a numerical adjustment) at NICE are expected, or if the government wishes to change how a threshold is used in decision-making, then NICE stakeholders should have the opportunity to comment on those changes.
NICE helps to ensure procedural ethics around resource allocation. Removing consultation requirements where procedural changes are involved risks undermining that role, particularly where changes (e.g. to the threshold) take into consideration wider political motivations (e.g. incentivising life sciences innovation), beyond independent HTA processes.
Next steps
Safeguards to preserve NICE’s independence over its methods and procedures remain essential. NICE appraisals must continue to be based on independent, evidence-based deliberation rather than short-term political pressures.
Changing the cost-effectiveness threshold alone does not determine how it is applied in practice. NICE retains significant discretion in how the threshold is framed in its guidance and applied in appraisals, meaning the practical impact of a change will depend heavily on NICE’s methods and procedures. How this practical application aligns with ministerial intention remains to be seen.
Given this level of discretion, it is important for NICE to specify – and then consult on – its appraisal methods and procedures. Any ministerial power should be narrowly defined and not extend to influencing how the threshold is operationalised.
What’s currently missing is a robust, transparent mechanism for ministers to receive and review evidence to inform any future changes to the threshold. A structured, predictable process will help ensure that future changes are made at an appropriate frequency and are grounded in evidence.
Too frequent or ad hoc changes risk creating uncertainty for decision-makers, innovators, and the wider pharmaceutical ecosystem. Such uncertainty could undermine confidence in the appraisal process, complicate investment decisions, and ultimately hinder innovation.
Any future threshold changes should be informed by independent expert input and meaningful engagement with relevant stakeholders. This would help ensure that changes reflect real-world evidence, health system priorities, and broader societal considerations.
Further research should examine the impact of the threshold increase, as well as how its use in HTA may interact with other policy mechanisms, such as the UK’s Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG).
Finally, an explicit process to change the threshold should include clear statements about the intended outcomes for the health system and wider society, such as improving population health or incentivising life sciences research in the UK, and the evidence supporting the expectation that threshold changes will deliver these outcomes.