Changes to NICE’s cost-effectiveness thresholds confirmed

2 Dec 2025 11:35 AM

The government yesterday (1 December 2025) announced that it will increase the thresholds NICE uses in evaluations of new medicines to decide which are cost-effective for use in the NHS.

This change is designed to improve the operating environment for pharmaceutical companies in the UK to maximise the government’s commitment to unlock innovation and support the sector. We are now working to introduce these changes fairly and swiftly to provide clarity for patients and industry. 

Dr Samantha Roberts, NICE chief executive, yesterday said:

“In a health service funded by general taxation it is right that government decides on the level of health spend in the UK. The newly agreed thresholds aim to support the life sciences sector and broader economy. 

“NICE’s global reputation for robust, rigorous, transparent guidance will not change as we work with independent committees to apply the new value for money thresholds in their deliberations from April 2026. “ 

We currently recommend 91% of the medicines we evaluate, around 70 a year. Our analysis suggests that increasing the standard threshold to £25,000 - £35,000 will allow us to recommend an additional 3-5 new medicines or indications per year. 

Our assessments use quality-adjusted life years (QALYs) to estimate the health benefits of new medicines. The QALY combines both the length of life gained from a treatment and its impact on quality of life compared with current treatment. We currently assess value for money for the NHS by applying a cost-effectiveness range of £20,000 to £30,000 per QALY gained. (we use a much higher threshold for medicines that treat ultra-rare conditions).  

This means that for a medicine to be considered cost effective, it should typically generate 1 additional year of perfect health (or an equivalent combination of additional life expectancy and health-related quality of life improvements) for no more than £20,000-£30,000 over the cost of current care. It has now been agreed that NICE will apply new thresholds of £25,000 to £35,000/QALY as soon as NICE has the power to do so, following a change in regulations. In addition to considering cost effectiveness our independent committees also hear from people affected and their carers’, clinical experts and examine real world evidence of how the treatment performs outside of clinical trials, before reaching final decisions on the use of medicines.  

As part of today’s announcement, we welcome the government’s support to use a new value set for valuing health-related quality of life. The value set comes from asking thousands of people from the public to judge how good or bad different health states would be. These are then used to calculate numerical values, which help healthcare decision-makers compare different treatments and understand their impact on health-related quality of life. 

We will introduce the new value set for use alongside EQ-5D-5L following peer review and publication. This change may additionally impact the cost-effectiveness of medicines. 

NICE will apply threshold changes to new technology appraisals and those currently underway. We will work to ensure our current timetable is adhered to. Where evaluations are already underway, these will continue through our normal process.  

If our independent committees decide a treatment is not cost effective using our current thresholds and applying the new thresholds may change that calculation then the topic will be paused until NICE has the power to apply the new thresholds.  

Those paused topics will then be considered against the new thresholds and proceed to publication. Companies will also need to do their part by submitting their evidence to us swiftly and pricing their products fairly. 

A NICE-hosted webinar: Changes to NICE’s cost-effectiveness thresholds next steps will take place on 3 December 2025.

You can register to attend the event here.