The ABPI is calling for an urgent review of NICE’s baseline cost-effectiveness threshold, arguing that 20 years of stagnation have left the UK undervaluing new medicines, deterring investment and limiting patient access to innovation.
NICE decides which medicines are worth funding on the NHS based on how much they cost to give one year of good-quality health. Currently, this is £20,000–£30,000 per Quality-Adjusted Life Year (QALY). However, this limit hasn’t been updated in over 20 years.
The real value of UK health spending
According to the ABPI, the actual value of what the UK is willing to pay for improved health outcomes has fallen by 47% between 1999 and 2025. If the upper limit had tracked inflation, it would now stand at nearly £57,000 per QALY. In contrast, the Treasury’s current recommendation for valuing a QALY in other areas of government spending, such as transport and education, is £70,000.
The association argues that a “forever frozen” threshold is indefensible amid rising costs and inflation. Medicines already face unprecedented scrutiny through access schemes, budget impact tests and mandatory rebates – far more than any other area of NHS spending.
Raising NICE’s threshold
The ABPI also highlights the wider implications for the UK’s life sciences ecosystem. The stagnation of the NICE threshold, it says, is undermining the UK’s international competitiveness, disincentivising global pharmaceutical companies from launching new products or investing in UK-based R&D and manufacturing.
To restore fairness and ensure the NHS remains a destination for medical innovation, the ABPI is calling for NICE’s baseline threshold to be increased to between £40,000 and £50,000 per QALY, after which it should be linked to inflation. This, the organisation argues, would better reflect current economic conditions and the true value that modern medicines bring to patients and the health system.
“Decisive action now will ensure the UK can continue to be a leader in life sciences,” concludes the ABPI in its release. “And, most importantly, that patients here can access the medicines they need when they need them.”
