Yesterday, the UK government announced a major change in pharmaceutical pricing policy. NICE’s cost-effectiveness threshold will increase from £20,000-£30,000 to £25,000-£35,000 per QALY starting in April 2026.
This is the first threshold adjustment in over 15 years. For pharmaceutical companies with products close to the old upper threshold, the impact is immediate and significant.
What’s changed?
NICE estimates this threshold increase will allow 3-5 more medicine approvals each year. The organisation currently recommends 91% of the medicines it evaluates (about 70 per year), so we can expect a modest but meaningful expansion.
So, the numbers are clear, but the implications for pricing strategy are less obvious.
The questions you should be asking:
How does this affect our current pipeline?
If you have products under evaluation with ICERs in the £30,000-£35,000 range, timing is crucial. NICE has confirmed that evaluations will pause if a treatment falls outside current thresholds but could be cost-effective under the new ones. Review your submission timing and evidence packages accordingly.
Should we revisit previous negative decisions?
Products rejected due to cost-effectiveness should be reconsidered. If your ICER was near the previous upper threshold, a resubmission strategy might be worth exploring. The key question is whether enough time has passed, and new evidence has emerged to justify another review.
What’s the competitive impact?
Your competitors are analysing the same announcement and asking similar questions. Products that gain early approvals under the new threshold will set clinical pathways and prescribing patterns. The first-mover advantage in newly accessible therapeutic areas could be significant, especially in regions where multiple competitors have borderline ICERs.
How do we optimise our evidence generation strategy?
The threshold change doesn’t change the basics of NICE’s evaluation process. You still need strong clinical effectiveness data, real-world evidence, and careful attention to patient impact. However, it does influence where to invest in additional evidence generation. Products near the threshold boundaries require special focus.
What does the EQ-5D-5L value set change mean for us?
Often missed in the threshold discussion is NICE’s adoption of a new value set for the EQ-5D-5L instrument. This affects how quality of life improvements and utility scores are measured and valued. For certain therapeutic areas, this could be as important as the threshold increase itself. Understanding the implications for your disease areas is essential.
The strategic lens:
The pharmaceutical industry has pushed for threshold increases for years. Health economists have argued the opposite, with some estimates suggesting £15,000 per QALY would better reflect opportunity cost. The government has sided with industry, directly linking this decision to support for the life sciences sector and broader economic goals.
Pharmaceutical pricing as industrial policy represents a meaningful shift. It suggests a stronger desire for further market access reforms than previously believed.
What happens next?
NICE is hosting a webinar tomorrow (3rd December) to discuss implementation details. Register here – https://meetnice.zoom.us/webinar/register/WN_6XXvw4qhQ32tHD1P9xBuXg#/registration
We’ll be paying close attention to:
- How existing evaluations will transition to the new thresholds
- Whether any retrospective reviews are allowed
- The timeline for implementing the EQ-5D-5L value set changes
- How this interacts with existing modifiers for severity and end-of-life treatments
The bottom line
A 25% threshold increase sounds significant, and in policy terms, it is. In practical terms, we’re looking at 3-5 more approvals per year in a system that already recommends 91% of submissions.
The value comes not just from additional approvals. It’s in the strategic options this creates for managing your portfolio, the chance to revisit borderline decisions, and what this indicates about the UK government’s readiness to further reform market access policy.
The companies that will gain the most are those asking the right questions now, not only about their current submissions but about their entire UK market access strategy. If you’re involved in pricing, market access, or commercial strategy for the UK market, now is a great time to review those ICER calculations and explore some new scenarios.
Planning for the threshold change?
GPI combines specialist pharmaceutical pricing expertise with curated data and analytical tools. Our team can help you assess what the threshold increase means for your portfolio and where the strategic opportunities lie.
Get in touch if you’d like to discuss the implications for your pipeline. The threshold increase is important, but the companies that act quickly on the implementation details will capture the most value.
Read NICE’s full announcement here: https://www.nice.org.uk/news/articles/changes-to-nice-s-cost-effectiveness-thresholds-confirmed
