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The U.K.’s National Institute for Health and Care Excellence may raise the cost-effectiveness threshold for the first time in 26 years. This threshold represents the maximum amount that a healthcare system is willing to pay for an additional unit of health benefit, typically measured in terms of quality-adjusted life years. It is not a rigid cutoff, though. Rather, it serves as a signal as to what the government is willing to pay.<\/p>\n
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There\u2019s been a sharp decline<\/a> in foreign direct investment in the British life sciences sector in recent years, as it fell by 58% from \u00a31.9 ($2.5) billion in 2021 to \u00a3795 million ($1.04 billion) in 2023. According to FirstWord Pharma, to \u201cstem the outflow of investment and to appease President Trump\u201d the British government is considering <\/a>raising the level of a cost-effectiveness threshold used as a benchmark to determine whether a healthcare intervention provides value for money for the National Health Service.<\/p>\n The National Institute for Health and Care Excellence assesses medicines and other medical technologies based on clinical- and cost-effectiveness as well as the overall cost to the NHS. To do this, the agency makes use of a measurement of clinical benefit called the quality-adjusted life year, which combines length of life gained from a treatment and its impact on patients\u2019 quality of life. Currently NICE considers medicines costing between \u00a320,000 ($26,032) and \u00a330,000 ($39,048) per additional QALY gained to represent good value for money for the NHS.<\/p>\n Though it technically refers to the maximum amount that the NHS is willing to pay for an additional unit of health benefit\u2014typically measured in terms of QALYs\u2014it is not a rigid cutoff. Rather, it\u2019s a guide which can be adapted case by case. Despite exceeding \u00a330,000 per QALY, some medical technologies may still get positive NICE recommendations.<\/p>\n Nonetheless, the threshold is viewed as a key signal to the life sciences sector <\/a>that can shape investment, pharmaceutical pricing and even which clinical trials are carried out in the United Kingdom.<\/p>\n The current \u00a320-30k\/QALY range has been in place since 1999, the year NICE was founded. Politico reported<\/a> last month that a 25% increase to \u00a325-37.5k\/QALY could be in the offing. This change is reportedly a fundamental component included in the plans senior British officials presented to the Trump administration to adjust drug prices and spending in an effort to stave off United States tariffs on imported pharmaceuticals. Britain is evidently \u201cin advanced talks\u201d with U.S. officials to avert such duties.<\/p>\n It remains uncertain, however, whether the U.K. government will confirm a 25% increase in the cost-effectiveness threshold and how the Trump administration and British pharmaceutical industry will react.<\/p>\n The Association of the British Pharmaceutical Industry has long sought a change<\/a> in the level of the threshold. ABPI wants a considerably larger increase than the government appears to be willing to adopt, namely to \u00a340,000-\u00a350,000 and then index-linked to inflation thereafter. The trade group recognizes that additional funding would be needed to support this.<\/p>\n Advocates for a threshold increase say that there should concurrently be better uptake of new medicines in Britain. Accordingly, a NICE positive recommendation ought to imply rapid and equitable access across the nation. But raising the threshold without a concomitant increase in pharmaceutical budgets would preclude this. In fact, it could leave a \u201cblack hole\u201d in the NHS<\/a> budget. As a result, some patients may have to wait even longer to be treated. Consider what happens when the threshold is increased without a corresponding budgetary expansion. While this could allow for an expensive new drug to gain access to the NHS, somewhere else in the system cuts would have to be made. In turn, this could harm other patients\u2019 health.<\/p>\n To address this problem, Health Secretary Wes Streeting is pushing for a \u201ctop-up\u201d fund for increased pharmaceutical spending rather than expecting the money to come from existing NHS budgets, according to The Times of London.<\/p>\n