NICE emerged in the late 1990s to tackle three interlinked problems facing the NHS: regional variation in care (‘health postcode lottery’), inconsistent clinical standards, and opaque rationing. Its founding aims were simple and uncompromising:

• Equity and consistency — end regional rationing so patients across England and Wales face the same standards.
• Clinical effectiveness — turn the best available evidence into clear guidance.
• Cost effectiveness — introduce a consistent way to judge value for money when public funds are at stake.

These goals made NICE the steward of clinical standards and the arbiter of value in the NHS.

Initially a vehicle for clinical standards, NICE’s remit expanded rapidly. It moved into technology appraisals and clinical guidelines, absorbed other health development functions, and eventually integrated social care guidance. Its recommendations became the de facto gold standard in UK clinical practice and a globally respected benchmark.

The reception to NICE by the life sciences industry was mixed. It was  It was seen as an unnecessary hurdle by the life sciences industry that on the whole was seen as extending the path to commercialisation and also reshaping eligible patient populations. All drugs that are assessed by NICE need appropriate regulatory approval. This approval in itself is an expensive and resource intensive process.

Crucially though, the regulatory process assesses a medicine’s  efficacy and safety for the intended use population. NICE assesses how best to clinically use the medicine in the UK population and importantly compares the new medicine against established standards of care and the extra value gained per pound spent, something that regulatory bodies do not.

In seeking to justify its recommendations to the NHS about which technologies to fund, NICE claims to adopt two complementary ethical frameworks, one procedural—accountability for reasonableness (AfR)—and one substantive—an ‘ethics of opportunity costs’ (EOC) that rests primarily on the notion of allocative efficiency.

Peer reviewed research from 2020 indicated that looking at submissions to NICE from 1999 to 2018 found that the increasing formalisation of NICE’s approach, over the years and a weakening of the burden of proof laid on technologies undergoing HTA have together undermined its commitment to EOC.

This implies that over time there has been a loss of allocative efficiency and a shift in the balance of how the interests of different NHS users are served, in favour of those who benefit directly from NICE’s recommendations. These changes also may have weakened NICE’s commitment to AfR by diminishing the publicity of its decision-making and by encouraging the adoption of rationales that cannot easily be shown to meet the relevance condition.

At the core of NICE’s decision making is a blunt instrument: the cost-effectiveness threshold, expressed as the maximum the NHS should pay for one additional quality-adjusted life year. By the early 2000s a pragmatic range took hold: £20,000–£30,000 per QALY. Special cases opened exceptions: end-of-life treatments have higher ceilings and highly specialised technologies for rare diseases operate with much higher effective thresholds. These thresholds have been a subject of sustained scrutiny, academic analysis, and policy debate, particularly regarding their methodology, historical evolution, and whether they should be linked to inflation or other economic indicators to maintain their relevance.

Throughout its history, external pressures (industrial, political, academic) have pushed for both upward and downward movement in the threshold. However, as of late 2025, the range remains unchanged in nominal terms for over two decades, with the most recent government-industry Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) explicitly “fixing” thresholds until the end of 2028 to ensure stability and certainty for industry and the NHS. An often-quoted figure is that the threshold’s real value has dropped by nearly half since its introduction. In 2025 terms, £30,000 from 1999 equates to less than £16,000 in today’s pounds

The recent breakdown of the  VPAG negotiations has brought the CE thresholds back into the spotlight. The Association of the British Pharmaceutical Industry (ABPI) and some policy commentators have called for an immediate doubling of the threshold (to £40,000–£60,000 per QALY) to match cumulative inflation, or at minimum, a catch-up uplift and an explicit annual indexing going forward and thus restoring  the UK’s attractiveness for ‘innovation and preserve patient access’.

But the cost effectiveness threshold should not be regarded merely a static political or purchasing-power benchmark (a price tag), but a measure of the NHS’s “marginal productivity”, the health gain provided by the last pound of NHS spending. As the NHS budget, structure, and clinical effectiveness change over time, the cost per QALY actually generated by the NHS may (in theory) rise more slowly than inflation or may even fall, meaning that automatic inflation-uplifts could be inappropriate. Automatically linking the threshold to inflation risks two harmful consequences:

• Decoupling price and outcomes |indexation can allow more expensive interventions to displace routine care that delivers greater health per pound, reducing total population health.

• Overstating opportunity cost | without empirical re-estimation, inflation indexing can misrepresent what the NHS truly gives up when it adopts a new treatment.

Raising the ceiling without fresh evidence risks adopting interventions that are pricier but not proportionally more effective, and undermines NICE’s comparative role against current standard care.

The debate must move beyond industry framing. NICE’s thresholds need more frequent, empirical re-estimation based on measures of marginal productivity, not simple indexation. That requires transparent, methodologically robust work to estimate what health the NHS actually secures per pound today.

At the same time, stakeholders beyond pharma; clinicians, commissioners, patients, and health economists must be put at the centre of this debate. Decisions about thresholds are decisions about priorities, and about how a publicly funded health system apportions scarce resources.

The question before us is not whether we should simply preserve the nominal value of a number set decades ago. It is whether the system that decides who gets treatment is still calibrated to deliver the most health for the public pound.

NICE must remain both principled and practical: principled in safeguarding evidence-based clinical standards; practical in ensuring its thresholds reflect current NHS realities and the social values that should guide collective health choices.