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Balancing cost-effe ctiveness with other values: the NICE experience. Stirling Bryan Department of Health Economics. Overview. Introduction to the National Institute for Health & Clinical Excellence (NICE) Cost-effectiveness analysis as a key driver of NICE decisions

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Balancing cost effe ctiveness with other values the nice experience

Balancing cost-effectiveness with other values: the NICE experience

Stirling Bryan

Department of Health Economics


  • Introduction to the National Institute for Health & Clinical Excellence (NICE)

  • Cost-effectiveness analysis as a key driver of NICE decisions

  • The NICE equity and social value principles

Nice programmes
NICE Programmes

  • Technology appraisals

    • Criteria include both clinical and cost effectiveness

  • Clinical guidelines

    • Criteria include both clinical and cost effectiveness

  • Public health guidance

    • Criteria include both effectiveness and cost effectiveness

  • Interventional procedures

    • Guidance on safety and efficacy

Technology coverage decisions in england
Technology ‘coverage’ decisions in England

  • Local level – main budget holders are the PCTs but wide variety of decision-making bodies

  • National level – NICE

    • coverage decisions based on explicit criteria, informed by evidence review and economic evaluation

    • submissions received from independent academic team, the sponsor of the technology, and other expert bodies






on evidence

13 weeks

4 weeks

  • 1st Committee meeting

  • preliminary


14 weeks



on preliminary


4 weeks

2st Committee meeting

 final guidance


(or not)

[14 months]

Nice appraisal committee membership n 28

Area of expertise

Number of Committee members (per branch)

Medical (e.g. GP, physician, surgeon)

12 (43%)

Other clinical (e.g. nurse, pharmacist)

4 (14%)

Methodologists (e.g. health economist, statistician)

5 (18%)


3 (11%)

Patient ‘advocate’

2 (7%)

Manufacturer ‘representative’

2 (7%)

NICE Appraisal Committee membership (n=28)

Example cea anakinra for ra
Example CEA: anakinra for RA

Guidance: “Anakinra should not normally be used as a treatment for rheumatoid arthritis. It should only be given to people who are taking part in a study on how well it works in the long term.”

The importance of cea at nice
The importance of CEA at NICE

  • Secretary of State’s Direction to NICE:

    • NICE should consider … “The broad balance of clinical benefits and costs”

  • Bryan et al (2007):

    • “I think economic evaluation was regarded as being important from day one.”

    • “It [the CEA] seems to me to be the clincher really. If it’s too high then it’s not going to get funded.”

  • NICE social value principle 2:

    • NICE “must take into account the relative costs and benefits of interventions (their 'cost effectiveness') when deciding whether or not to recommend them.”

The drug itself has no side effects …

but the number of health economists needed to prove its value may cause dizziness and nausea

The us and this debate
The US and this debate …

Britain Stirs Outcry by Weighing Benefits of Drugs Versus Price

Millions of patients around the world have taken drugs introduced over the past decade to delay the worsening of Alzheimer's disease. …

But this year, an arm of Britain's government health-care system, relying on some economists' number-crunching, said the benefit isn't worth the cost. It issued a preliminary ruling calling on doctors to stop prescribing the drugs.

THE WALL STREET JOURNAL November 22, 2005; Page A1

Committee procedures the threshold
Committee procedures: the threshold

There is a feeling when we get beyond £30,000 per QALY we’re running into trouble.

I do sometimes have reservations about the figure of £30,000 per QALY. Where does the figure come from? Who determines where the cut-off point should be?

My biggest criticism … is basically we are funding things at a level that actually the NHS cannot afford – that the [cost per] QALY figure is far too high, it should be much lower.

Bryan et al (2007)

Birch gafni 2007 economists dream or nightmare hepl
Birch & Gafni (2007) ‘Economists’ dream or nightmare?’ HEPL

“The efficiency of adopting the new intervention depends crucially on where the additional resources required to support the new intervention are to be taken from and at what opportunity cost.”

Nice and p rocedural justice
NICE and p rocedural justice

  • Framework: 'accountability for reasonableness‘ (Daniels & Sabin, 2002)

    • Publicity

    • Relevance

    • Challenge and revision

    • Regulation

Nice s social value principles
NICE’s social value principles

  • Principle 3

    • Decisions about whether to recommend interventions should not be based on evidence of their relative costs and benefits alone. NICE must consider other factors when developing its guidance, including the need to distribute health resources in the fairest way within society as a whole.

  • Principle 4

    • If NICE decides not to recommend use of an intervention with a cost per QALY gained within or below the range £20,000 to £30,000 per QALY gained, or decides it will recommend use of an intervention within or above this range, it must explain the reasons why.

Nice s social value principles1
NICE’s social value principles

  • Principle 5

    • Although NICE upholds the right of individuals to make their own decisions about their care, this should not lead NICE to recommend interventions that are not effective and cost effective for the NHS as a whole.

  • Principle 7

    • NICE can recommend that use of an intervention is restricted to a particular group (e.g. people under or over a certain age) but only in certain circumstances. There must be clear evidence about the increased effectiveness of the intervention in this subgroup, or other reasons relating to fairness for society as a whole, or a legal requirement to act in this way.

Procedural and distributive justice coming together
Procedural and distributive justice coming together

  • Principle 6

    • NICE should consider and respond to comments it receives about its draft guidance, and change it where appropriate. But NICE must always use its own judgement to ensure that what it recommends is cost effective and takes account of the need to distribute health resources in the fairest way within society as a whole.

Appraisal Committee


Roles of

Committee members


The ‘workings’ of

the Committee



Concepts & processes








Practical issues

relating to economic



Conceptual challenge qalys
Conceptual challenge: QALYs

  • The positives of QALYs:

    They really do allow us to begin to compare hearing aids to insulin pumps to MS drugs. Now there are a lot of problems with them … but without that it becomes very difficult to do anything meaningful in terms of decision making.

  • The problem, drawing on the example of MND:

    When people with MND are looking forward over that really quite dire prospect, … having a few weeks or a few months of better quality of life … might be valued much more highly than just assigning a QALY weight.

Conceptual challenge equity
Conceptual challenge: equity

  • No strong evidence currently on which to base equity weighting:

    I think there’s a sort of recognition at the moment, that we have no basis for doing the weighting.

  • Some implicit weighting is being done:

    At the end of each of these discussions people say, ‘well we have no basis for doing this so let’s just treat a QALY as a QALY regardless’. But where that isn’t true, I think, is in relation to children … although people don’t necessarily explicitly state it, I think everybody tends to give it more weight.

And to conclude
And to conclude …

“While we recognise that there are aspects of NICE’s methods that could stand building, on balance we think that UK health economists should sleep more soundly at night for its presence …

Gold & Bryan (2007)

More in
More in …

  • Bryan S, Williams I, McIver S. Seeing the NICE side of cost-effectiveness analysis: A qualitative investigation of the use of cost-effectiveness analysis in NICE technology appraisals. Health Economics 2007;16(2):179-193

  • Williams I, Bryan S, McIver S. How should cost-effectiveness analysis be used in health technology coverage decisions? Evidence from the NICE approach. Journal of Health Services Research & Policy 2007;12(2):73-79

  • Williams I, Bryan S. Cost-effectiveness analysis and formulary decision making in England. Social Science & Medicine 2007;65:2116-2129

  • Gold M, Bryan S. Some reasons to be cheerful about NICE. Health Economics, Policy and Law 2007;2(2):209-216