Methods for the estimation of the NICE cost effectiveness threshold

Abstract: The comparison of the incremental cost effectiveness ratio (ICER) of a new technology, which is more costly than existing alternatives, with the cost-effectiveness threshold is important in assessing whether the health expected to be gained from its use exceeds the health expected to be forgone elsewhere as other NHS activities are displaced. 
Currently NICE uses a threshold range of £20,000 to £30,000 per quality adjusted life year (QALY) gained.  Explicit scientific methods are required for empirical estimation of the threshold, making best use of routinely available NHS data. 
We report on research funded by the National Institute for Health Research (NIHR) and Medical Research Council (MRC) Methodology Research Programme to develop methods to estimate the threshold.
We estimate the relationship between changes in overall NHS expenditure and changes in mortality and extend this to changes in broader health effects in the form of quality-adjusted life-years (QALYs).
The methods developed go some way to proving an empirically-based and explicit quantification of the scale of opportunity costs the NHS faces when considering whether the health benefits associated with new technologies are expected to offset the health that is likely to be forgone elsewhere in the NHS. 

Project details and downloads