Accounting for inflation within NICE cost-effectiveness thresholds

Abstract

BACKGROUND The National Institute for Health and Care Excellence (NICE) makes recommendations on the reimbursement of new drugs utilising an Incremental Cost-Effectiveness Ratio (ICER) threshold range that has been in use since 2004 and has remained unchanged. RESEARCH DESIGN AND METHODS To model how the NICE cost-effectiveness thresholds would vary if inflation was accounted for and their potential effects on appraisal outcomes. All NICE single technology appraisal (STA) recommendations published in 2019 were identified and the outcome and most plausible ICERs were evaluated against thresholds, after taking inflation into account. RESULTS 41 STAs with base-case ICERs were identified. For general STAs, 46% of ICERs were ≤£20,000/QALY, 27% were £20,000-£30,000/QALY and 27% >£30,000/QALY. Cumulatively, there was a 43% decrease in the purchasing power of the pound from 2004 to 2019 due to inflation. To compensate, the NICE ICER threshold would have to increase to £28,584-£42,876/QALY. Using inflation-adjusted thresholds led to an absolute increase of 18% and 12% of STAs whose ICERs fell below the lower and upper bounds of this threshold range, respectively. CONCLUSION By not adjusting for inflation, the NICE ICER thresholds have declined in real terms. Whether ICER thresholds should be dynamic to reflect factors like inflation requires further research.