Written by Miriam Belmonte, Consultant [email protected]
Cost effectiveness threshold change
The UK government has confirmed a major policy change: from April 2026, NICE’s cost-effectiveness threshold will rise for the first time in 26 years. The current £20,000–£30,000 per QALY range will increase to £25,000–£35,000 per QALY, applying across all technology appraisals.
Government modelling suggests the change could enable three to five additional medicines or indications to be recommended each year and may support a 25% increase in UK investment in innovative treatments. The approval rate for new medicines, currently around 91%, is also expected to improve.
This shift is a government-led policy decision, not a NICE methods update. Regulatory changes by the Department of Health will be completed ahead of implementation, and NICE will conduct a short consultation to determine how the new threshold should be applied, not whether the values are appropriate.
Until April 2026, all ongoing and new appraisals will continue under the existing £20,000-£30,000 range.
How NICE will manage the transition
To minimise disruption around implementation, NICE will categorise ongoing topics into three groups:
- Cost-effective under current threshold: these topics will continue as normal
- Not cost-effective now but possibly cost-effective under new thresholds: these will be paused before draft guidance and restarted once the new threshold takes effect
- Unlikely to be cost-effective even under the new threshold: these will continue toward negative guidance without delay
NICE aims to avoid bottlenecks and maintain predictable timelines during the transition. Companies will be contacted directly by NICE teams if their topic is affected.
Previously rejected treatments will not be routinely re-evaluated. Reappraisal will only occur if new, substantial evidence is presented.
The change does not affect:
- Highly Specialised Technologies (HST), which retain their £100,000–£300,000 per QALY range
- The severity modifier
- The Budget Impact Test (recently increased to £40 million).
The updated threshold will also apply to commercial negotiations, including commercial flexibility offers, managed access arrangements, and Cancer Drugs Fund reviews initiated after April 2026. NICE does not expect major changes to cost-comparison pathways, but companies will need to review pricing strategies for products close to the margins of cost-effectiveness.
EQ-5D value set update
NICE is also preparing to adopt a new EQ-5D-5L value set in 2026, representing the first update to QALY valuation in over ten years. The new value set is based on large-scale preference studies involving more than 1,000 UK members of the public, who were asked to evaluate different health states.
The aims are to:
- Provide a more patient-centred reflection of quality of life
- Modernise the basis of QALY calculations
- Align with contemporary public preferences
This update will undergo NICE’s standard methods process, including public consultation. Final timing depends on peer review and publication of the underlying research, expected in early 2026.
Implementation planning will need to consider:
- Mapping and interoperability between 3L and 5L instruments
- Model adaptations for ongoing appraisals
- Whether existing evaluations must migrate to the new value set
NICE intends to manage the transition carefully to minimise disruption and maintain predictability for developers.
Strategy and policy context
Both the threshold increase and the new EQ-5D value set form part of a broader policy agenda aimed at strengthening the UK’s competitiveness in life sciences. The changes follow commitments made under the UK–US Economic Prosperity Agreement and ongoing government efforts to support patient access to innovative treatments.
The updates apply to England and Wales. Approaches in Scotland and Northern Ireland are still to be confirmed.
References:
- “Changes to NICE’s cost-effectiveness thresholds next steps” webinar (December 3rd, 2025) – The National Institute for Health and Care Excellence
