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NICE cost-effectiveness threshold is too high, say economists

24 August 2007

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Leading economists have suggested that the National Institute for Health and Clinical Excellence (NICE) should be set a less generous cost-effectiveness threshold, in this week’s British Medical Journal (BMJ).

Since its inception in 1999, NICE has adopted a cost-effectiveness threshold range of £20,000 to £30,000 per quality adjusted life year (QALY) gained.

But John Appleby, Chief Economist at the King’s Fund, and Nancy Devlin and David Parkin at City University in London say this threshold has no basis in either theory or evidence.

Cost-effectiveness is emerging as a key factor in an ongoing House of Commons Select Committee inquiry into NICE, which has received evidence that the threshold may be too high.

If this suggestion is correct, the implications for the NHS are profound, suggest the authors, who say that when primary care trusts implement NICE’s guidance, resources may be diverted from other healthcare services that are better value for money.

By setting the hurdle too low, NICE might reduce the efficiency of the NHS, they warn.

According to the authors, the average primary care trust spends £12,000 to gain an extra QALY in circulatory disease and £19,000 in cancer. In contrast, an analysis of NICE’s decisions suggests that its threshold is, in practice, even more generous than NICE admits, being closer to £45,000.

The authors recommend that the NHS be given independence from the Department of Health on the specific matter of setting a cost-effectiveness threshold.

NICE’s cost effectiveness threshold BMJ Volume 335 pp. 358-9

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