NICE's Threshold Range Questioned

September 2007 - An editorial by John Appleby, chief economist at the King's Fund, and City University researchers Nancy Devlin and David Parkin recently published in the British Medical Journal (BMJ) questions whether the threshold for cost effectiveness set by the National Institute for Health and Clinical Excellence (NICE) is too high.

NICE is an independent body established in 1999 to determine which drugs should be available on the National Health Service (NHS) in England and Wales. NICE has adopted a cost effectiveness threshold of £20 000 to £30 000 per quality adjusted life year (QALY) gained incorporating both quantitative and qualitative measures. The issue of cost effectiveness is a key factor in the current House of Commons select committee inquiry into NICE.

The BMJ editorial argues that:"the uncomfortable truth is that NICE's threshold has no basis in either theory or evidence."

The authors explain that the implications of an over-generous threshold are profound, suggesting that too many new technologies have been recommended and that primary care trusts implementing NICE guidelines may divert resources from healthcare services that provide better value for money, thereby reducing efficiency.

The authors point to evidence of a mismatch between NICE's threshold range and that operating elsewhere in the NHS. For example, the average primary care trusts 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 true threshold is closer to £45 000.

The authors recommend that the NHS is made independent from the Department of Health when setting a cost effectiveness threshold, comparing this to the Bank of England's operational independence from the Treasury in setting UK interest rates. They conclude that a situation in which NICE employs an unsubstantiated range to assess cost effectiveness and others within healthcare make no use of any such threshold is not conducive to efficiency and fairness in the NHS.