The NICE threshold stands at the core of UK healthcare decisions, setting the cost limit for new medicines in the NHS at £20,000 to £30,000 per Quality-Adjusted Life Year gained, a figure that has not changed since 1999 and now harms patient outcomes and investment through such stagnation. This article reviews the need to raise the NICE threshold, covering economic impacts, global comparisons, and policy steps for decision-makers.

Context and Background

NICE assesses medicines to ensure value for NHS funds, where the threshold measures if a drug’s cost justifies health benefits, but over 25 years, inflation has cut its real value by 47%, meaning that in 2025 terms, £30,000 from 1999 equals about £15,847. While the NHS budget grew since 2014, the NICE threshold stayed fixed, and if linked to that growth, it would reach £59,150 now.

Many nations lack fixed thresholds, and those that use them often set higher limits—for instance, Australia’s range hits £35,000 to £40,000 in UK pounds—yet the UK’s low bar delays drug launches, with recent US tariff threats adding pressure as companies like AstraZeneca paused UK investments worth billions. Ministers now eye a 25% rise in the NICE threshold to ease tensions.

Key Analysis and Insights

The frozen NICE threshold creates clear problems, first by undervaluing life-saving treatments since medicines face strict reviews while other NHS areas do not, and HM Treasury values a QALY at £70,000, leading to uneven spending even as transport and education adjust for inflation but medicines do not.

Second, scrutiny on drugs is intense, as NICE evaluations check costs and benefits while deals add rebates, with the sector facing £13.5 billion in repayments over three years, whereas standard procedures often skip such tests, and a 2024 analysis shows many would fail if appraised like drugs. Real value has dropped 47% since 1999, per ABPI data; the UK’s £20,000–£30,000 is globally low compared to higher thresholds in Canada and France; and medicines take just 9% of NHS funds, below Europe’s 12–15%.

Third, investment suffers, as the ABPI report from 2025 lists the NICE threshold as a barrier, with firms canceling £2 billion in projects this year, and weight-loss drugs like semaglutide show the issue since they promise NHS savings on obesity but threshold limits slow their use, while Sweden adopted them faster with flexible rules.

Geopolitical factors worsen matters, as US leaders push for higher prices abroad and UK talks seek £1 billion in relief for industry, so a higher NICE threshold could secure deals and avert tariffs, even as patient groups worry about costs.

Implications and Recommendations

Raising the NICE threshold to £40,000–£50,000 would shift NHS dynamics by matching inflation and budget growth, improving health economics as more drugs gain approval and potentially raising medicines’ share to 11–12%, with extra funds of about £2.5 billion yearly to support it.

System effects include less launch delay, as the UK lags the EU by 6–12 months on new drugs, and policy gains come from fairer global roles where the UK aids R&D without freeloading claims.

For leaders, consider these steps: set a phased rise to £40,000–£50,000 by 2026 and link it to inflation; fund it via NHS boosts, not cuts elsewhere; engage NICE and industry for models that aid equity; and review it yearly to measure impacts on access and funds. Such changes ensure timely treatments and keep the UK strong in life sciences.

Conclusion

The NICE threshold needs an urgent update, as its freeze undervalues health gains, deters investment, and widens gaps, but a rise to inflation levels fixes this by giving patients better access and keeping the NHS a leader.