NICE increased cost effectiveness threshold from £20,000-£30,000/QALY to £25,000-£35,000/QALY

The UK government announced on December 1, 2025, an increase in the National Institute for Health and Care Excellence (NICE) thresholds used to evaluate new medicines' cost-effectiveness for the National Health Service (NHS).

NICE increased cost effectiveness threshold from £20,000-£30,000/QALY to £25,000-£35,000/QALY

This adjustment raises the standard range from £20,000 - £30,000 per quality-adjusted life year (QALY) gained to £25,000 - £35,000 per QALY, aiming to foster innovation in the pharmaceutical sector and bolster the life sciences economy.

NICE expects this change to enable recommendations for 3–5 additional new medicines or indications annually, on top of the current 91% approval rate for about 70 evaluations per year.​

QALY Assessment and Implementation Timeline

NICE employs QALYs to quantify a medicine's benefits, merging gains in life expectancy with quality-of-life improvements relative to existing treatments. A medicine qualifies as cost-effective if it delivers one year of perfect health (or equivalent) for no more than the threshold cost over current care, with higher limits for ultra-rare conditions. The new thresholds take effect from April 2026 after regulatory updates, applying to new technology appraisals and ongoing ones; paused evaluations where the shift could alter outcomes will resume under the updated criteria once empowered.​

Additional Enhancements and Stakeholder Roles

NICE welcomes government backing for a revised health-related quality-of-life value set, derived from public surveys on health states and aligned with EQ-5D-5L after peer review. Independent committees will integrate these alongside patient input, clinical expertise, and real-world evidence in decisions. Industry must submit evidence promptly and price products equitably to support timely processes