The National Institute for Health and Care Excellence (NICE) will increase its cost-utility thresholds – the financial limits used to approve new medicines – for the first time in 25 years. From April 2026, the standard range will rise from £20,000–£30,000 to £25,000–£35,000 per quality-adjusted life year (QALY). Observers note that this adjustment does not stem from new clinical evidence or changes in the health service's marginal productivity. Instead, the change follows intense pressure from the US Government during recent trade negotiations and significant pushback from the global pharmaceutical industry.
Manufacturers recently paused nearly £2 billion in planned UK investments, citing a restrictive commercial environment and high rebate requirements under the VPAG scheme. In response, critics claim that the government has used the NICE threshold as a lever of industrial policy to improve market attractiveness. However, this move prioritises pharmaceutical investment over the fundamental principle of 'opportunity cost' within the health service.
The theoretical basis of a cost-effectiveness threshold can be considered to reflect the marginal productivity of the health service – the cost at which the NHS generates one year of healthy life. Academic research indicates that these data currently sit at approximately £13,000 per QALY. By evaluating new treatments against a £35,000 limit, NICE will end up recommending medicines that cost considerably more than the health benefits they provide.
The implementation of these revised figures – starting in April 2026 – also raises concerns regarding the institutional independence of the National Institute for Health and Care Excellence. If geopolitical negotiation and industrial bargaining dictate the value of a healthy life, cost-effectiveness analysis risks becoming performative. Rather than informing decisions based on objective value, the process may simply justify prices already conceded in international trade agreements.
The health service expects the higher thresholds to result in the recommendation of an additional three to five medicines or indications each year. While this improves access to specific innovations, commentators noe that it places an uncosted burden on local health budgets. The shift suggests that the UK now treats pharmaceutical innovation as an economic engine first and a clinical intervention second.
Source: National Institute for Health and Care Excellence
Link: Changes to NICE's cost-effectiveness thresholds confirmed
Date: 1 December 2025
Source: Science Media Centre
Link: Expert reaction to announcement on UK-US pharmaceuticals deal and changes to NICE’s cost-effectiveness thresholds
Date: 1 December 2025
Source: Applied Health Economics and Health Policy
Link: Vallejo-Torres L, Edney LC, Espinosa O, et al. Politicised Changes to the NICE Threshold Risk Making Cost-Effectiveness Analysis Performative, Not Informative. Appl Health Econ Health Policy. 2026. doi: 10.1007/s40258-025-01026-y.
Date: 9 January 2026
