Following weeks of anticipation, NICE officially announced in December that the recently rumored increase of its standard cost effectiveness threshold will take effect beginning April 2026.

What’s changing and when?

The standard cost effectiveness threshold range that NICE committees use to judge whether a medicine is cost effective will increase by 25% from 20–30K GBP per QALY gained to 25–35K GBP per QALY gained.

NICE stated in its webinar on December 3, 2025, that the Department of Health and Social Care (DHSC) will consult on powers to direct NICE to enact this change starting April 2026, in a targeted change to regulation. This consultation opened on December 9, 2025, and will close on January 13, 2026.

NICE stressed that this targeted change will not mean any broader intervention from government ministers in its methods or decisions. It also confirmed that it is proposing to the government that the new threshold applies across all NICE guidance (Digital, HealthTech, Guidelines) and was awaiting further details. NICE also confirmed in the webinar that it was not aware of any proposals to change the thresholds used to evaluate Highly Specialized Technologies (HSTs) for ultra-rare diseases.

However, the first proposal in the DHSC consultation document refers explicitly to all NICE guidance:

“Do you agree or disagree that the power to direct NICE about the standard cost-effectiveness threshold should apply to all NICE guidance that makes recommendations on health spending? This includes technology appraisal and highly specialised technology evaluation recommendations.”

As part of the timeline announced by NICE (see figure), which is subject to consultation, NICE confirmed that in early 2026 it will consult on how this change will be implemented.

Anticipated timeline to implement the announced changes (Source: NICE webinar on December 3, 2025)

In addition to an increase of its cost effectiveness threshold, NICE also announced it will start using a new EQ-5D-5L UK value set that has been developed by asking 1,200 members of the public to judge different health states and is anticipated to be published in a peer-reviewed publication by March 2026. This change, however, will follow the standard approach to making modular updates to its methods including a public consultation on the proposed change before its full implementation.

NICE’s announcement came in parallel with an announcement from the UK government about the successful closure of a trade deal with the US that includes this change, alongside an agreement regarding the tariff that UK pharmaceutical manufacturers will pay when exporting medicines to the US.

Why these changes?

NICE’s methods changes are anticipated to reshape the market access environment in the UK and beyond. The US-UK trade deal, of which this threshold change is part, may convince pharma companies to continue their presence in the UK and to maintain the UK’s positioning in the launch sequence after previously threatening to pull out of the UK market under pressure from the newly announced US tariffs and policies such as the MFN external reference pricing policy.

According to the UK government’s press release announcing NICE threshold changes:

“This is supported by confirmation that — thanks to strong UK support for innovation — the UK has secured mitigations under the US’ ‘Most Favoured Nation’ drug pricing initiative so that we will continue to ensure access to the latest treatments. This will encourage pharmaceutical companies from around the world to prioritise the UK for early launches of their new medicines, meaning British patients could be among the first globally to access breakthrough treatments.”

The anticipated impact

These NICE methods changes will have far reaching impact on the assessment of cost effectiveness of medicines in the UK, with likely spillover effects on other countries’ practices as well.

The higher WTP threshold expands headroom for treatments near previous ICER cut-offs, improving the feasibility of charging higher prices for innovative therapies. However, the unchanged discount rate limits the full advantage of this increase. This means more flexibility on price, but continued pressure on future value. It remains to be seen whether this increased threshold will also apply to other NICE guidelines apart from its technology appraisal (TA) program. What has been confirmed is that the threshold change will not lead to any reviews of completed appraisals.

NICE’s adoption of the EQ-5D-5L UK value set will also reshape patient-reported outcomes strategy. Utilities derived from EQ-5D directly influence QALY calculations and ICERs. By reflecting more nuanced health states, EQ-5D-5L supports a more accurate calculation of QALYs. Trials that currently collect EQ-5D-3L data may need a new mapping function to align with the new set. Future trials should prioritize EQ-5D-5L and ensure high completion rates for PRO instruments, as missing data will become even more critical.

From a patient perspective, this means their lived experience is better represented in HTA decisions. For pharma companies, it means interventions that improve pain, anxiety, and functional independence can show their full value in cost-effectiveness models.

Regional impact

It is not clear how Europe will respond to these changes on both sides of the Atlantic, but what is clear is that actions will need to be taken to minimize the impact of these changes on both the favorability of European markets as launch markets and the prices to be charged by pharma companies in these markets, both of which are likely to impact patient access to innovative medicines.

Further, we could speculate that this change could bring prices in the UK closer to France and Germany. The UK has been able to achieve low prices because of the powerful negotiating position of the UK’s single centralized payer for the majority of UK healthcare (the NHS), its deeply embedded health technology appraisal processes through NICE, which acts as the gatekeeper for the reimbursement of drugs, and through long-standing price-control mechanisms that effectively cap the NHS’s spend on innovative medicines — the most recent iteration of which is the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), and a fallback Statutory Scheme. The current VPAG scheme requires UK manufacturers to pay an effective clawback rate of 23.5% to the UK Government on “newer medicines” (22.9% clawback plus a 0.6% investment program funding, excluding new active substances) — far higher than comparators such as France (5.7%), Germany (7%), and Spain (7.5%).

Have you considered these and other impacts and is your team ready for these changes?

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