The UK government has confirmed a major change to the way new medicines are assessed for NHS funding.
“In a health service funded by general taxation it is right that the government decides on the level of health spend in the UK. The newly agreed thresholds aim to support the life sciences sector and broader economy,” said Dr Samantha Roberts, Chief Executive of NICE.
From April 2026, NICE will increase its cost-effectiveness threshold from £20,000–£30,000 per quality-adjusted life year (QALY) to £25,000–£35,000/QALY.
Because the threshold is rising, companies will still need to show that their drugs are clinically effective, but NICE will now accept a higher cost per QALY when judging value for money.
This means that some drugs that were previously just above the cost-effectiveness threshold may now fall within the acceptable range and be recommended.
NICE says the updated threshold is designed to strengthen the UK’s life sciences environment, support innovation and give clearer expectations for patients, the NHS and industry.
What the change involves
NICE’s current approach assesses how many additional QALYs a treatment delivers compared to standard care and whether the cost per QALY falls within the long-standing £20,000–£30,000 range.
Under the new system, the £25,000–£35,000/QALY threshold will apply to all new technology appraisals, as well as those already underway once regulatory permissions are in place.
NICE will also introduce a refreshed health-related quality-of-life value set, based on updated public preference data, which will be used in future QALY calculations.
The Association of the British Pharmaceutical Industry (ABPI) welcomed the change, saying the higher threshold gives NICE the opportunity to approve more new medicines and allows a greater number of patients to benefit from those medicines.
“[The change] is an important step towards ensuring patients can access innovative medicines needed to improve wider NHS health outcomes,” said Richard Torbett, Chief Executive of ABPI.
Expected outcomes
NICE estimates that the revised threshold could lead to 3–5 additional medicines or indications being recommended for NHS use each year, alongside the roughly 70 technologies it approves annually.
The organisation says patients may benefit from faster access to innovative treatments, while industry gains greater clarity on how value will be measured.
Historical context
NICE’s cost-effectiveness threshold has remained unchanged since the institute was founded in 1999.
The updated threshold forms part of broader government efforts to support the UK’s life sciences sector.
Next steps
The new threshold and updated quality-of-life value set are expected to take effect in spring 2026.
Ongoing appraisals may be paused and reconsidered where applying the new threshold could change an outcome.
“Transparent guidance will not change as we work with independent committees to apply the new value for money thresholds in their deliberations from April 2026,” said Roberts.