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Original research

Accounting for inflation within NICE cost-effectiveness thresholds

Pages 131-137 | Received 11 Jan 2021, Accepted 11 May 2021, Published online: 18 Jun 2021
 

ABSTRACT

Background

The National Institute for Health and Care Excellence (NICE) makes recommendations on the reimbursement of new drugs utilizing 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 single technology appraisal (STA) recommendations published in 2019 were identified. The outcome and most plausible ICERs were then 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.

Acknowledgments

We would like to thank Mike Drummond for his insightful comments during the review process and Alan Soo with his assistance on modeling and compounding inflation.

Declaration of interest

VL is an independent consultant and RM works for a consultancy, both of whom work in the pharmaceutical industry. The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

Reviewers disclosure

Peer reviewers on this manuscript have no relevant financial relationships or otherwise to disclose.

Authors’ contributions

Both VL and RM contributed equally to all aspects of this manuscript and approved the final submitted version.

Data availability

All information used for this study has been extracted from publicly available sources and can be obtained from the Office for National Statistics and NICE websites.

Additional information

Funding

This paper was not funded.

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