Open consultation

Changes to NICE regulations: cost-effectiveness threshold - consultation document

Published 9 December 2025

Introduction

The National Institute for Health and Care Excellence (NICE) is the executive, non-departmental public body sponsored by the Department of Health and Social Care (DHSC) that develops authoritative, evidence-based guidance for the health and care system to support best practice and secure the best use of the health and care system’s resources.

NICE plays a critical role in ensuring that limited health and care resources deliver maximum health benefit for patients while also maintaining the UK’s position as a world-leading destination for developing and launching innovative new technologies.

In developing its guidance, NICE evaluates treatments against a cost-effectiveness threshold and its methods and decisions centre on whether a specified product is a clinically and a cost-effective use of the health budget compared to other potential uses of that budget.

This consultation seeks views on proposals to amend the National Institute for Health and Care Excellence (Constitution and Functions) and the Health and Social Care Information Centre (Functions) Regulations 2013 to grant a power to the Secretary of State for Health and Social Care to direct NICE with respect to the standard cost-effectiveness threshold that it uses in the development of its guidance and recommendations.

The proposed change would give ministers a limited power to set the relevant cost-effectiveness threshold through secondary legislation, while preserving NICE’s independence to develop the methods that it uses in developing its guidance. The proposals balance the need for democratic accountability for decisions that have significant implications for NHS resource allocation and wider government objectives with independent evidence-based decision making. NICE’s independence to develop its guidance and recommendations within the established framework remains critical and there are no plans to change the existing provisions that prohibit ministers from directing NICE as to the substance of its guidance and recommendations.

Current legislative framework

NICE was formed in 1999 and was re-established as an executive non-departmental public body under the Health and Social Care Act 2012. It provides evidence-based guidance for the NHS and social care, including technology appraisal and highly specialised technology evaluation recommendations.

Under the Health and Social Care Act 2012 and associated regulations, NICE is responsible for setting its own methods and processes. The cost-effectiveness threshold that is used in the development of NICE’s guidance and recommendations is a matter of public policy that is a reflection of the amount of the healthcare budget that should be apportioned to innovative new treatments, taking into account a range of factors. The government therefore considers that it should be treated as discrete from NICE’s methods and processes and should be set by the democratically-elected government.

Ministers currently have no power to direct NICE on the procedures that it uses in the development of its guidance, including technology appraisal and highly specialised technology evaluation recommendations. Any changes to the approach that NICE takes must be aligned with its statutory duties and consulted upon. Financial controls apply under Managing public money, requiring HM Treasury approval for decisions that are novel, contentious or repercussive.

The current legislative framework means that there is no clear mechanism for initiating an amendment to the NICE cost-effectiveness threshold to support government priorities.

The government is proposing to amend the National Institute for Health and Care Excellence (Constitution and Functions) and the Health and Social Care Information Centre (Functions) Regulations 2013 (the NICE regulations), as follows.

Proposal 1

Give ministers a limited power of direction to set the core cost-effectiveness threshold that NICE uses in the development of guidance, including technology appraisal and highly specialised technology evaluation recommendations.

Regulations 5(4), 7(9) and 8(8) of the NICE regulations provide that NICE must establish a procedure for the appraisal of technologies that it has been directed to appraise. Ministers do not have a power to direct NICE as to the threshold that it uses and there is therefore no clear mechanism for amending the threshold.

The proposed change would enable ministers to direct NICE to use a specific cost-effectiveness threshold in the development of its guidance and recommendations. The government considers that the change is necessary to enable the threshold that NICE uses to take into account a broader range of factors, such as industrial policy objectives, economic growth and investment, which are properly matters for the elected government. The change would also ensure that there is a clear route for amending the threshold. NICE would continue to be responsible for the wider methods and processes that it uses in the development of its guidance.

It will remain vitally important that NICE is able to develop its guidance and recommendations free from political interference, in accordance with the framework that it operates within. The existing provisions to safeguard NICE’s independence by prohibiting ministers to direct NICE as to the substance of its guidance and recommendations, will remain unchanged.

Proposal 2

Remove the requirement for NICE to consult on methods changes where these result from a ministerial direction.

Regulations 5(5), 7(9) and 8(8) of the NICE regulations provide that NICE must consult “such persons as it considers appropriate” in the development of the procedures that it uses in the development of its advice, guidance, information and recommendations.

We are proposing to amend the regulations to provide that there is no requirement for NICE to consult on consequential changes to its procedures where necessary to reflect a direction from the Secretary of State. Therefore, where NICE has been directed to use a set standard cost-effectiveness threshold in the development of its guidance, it would be unnecessary for NICE to consult separately on the changes that it makes to its procedures to implement the direction.

Legal duties

Equality Act 2010

The general equality duty that is set out in the Equality Act 2010 requires public authorities, in the exercise of their functions, to have due regard to the need to:

• eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the act
• advance equality of opportunity between people who share a protected characteristic and those who do not
• foster good relations between people who share a protected characteristic and those who do not

The view of DHSC is that the proposals detailed in this document will not have an adverse or differential impact on individuals with protected characteristics. The overarching aim of these proposals is to ensure that the standard cost-effectiveness threshold used in the development of NICE guidance secures consistent patient access to medicines regardless of who experiences the benefit in a way that is aligned to the government’s wider policy agenda.

The cost-effectiveness threshold is currently expressed as the cost per ‘quality adjusted life year’ (QALY) gained. QALYs are a measure of health outcome that combines 2 dimensions of benefit into a single measure:

• length of life
• health-related quality of life

This makes them suitable for comparing diverse interventions using a common ‘currency’ of health benefit. QALYs provide a transparent, evidence-based way to measure health gains and allow fair comparisons of health benefits across treatments and populations under consideration. In relation to the Equality Act 2010, these proposals:

• eliminate unlawful discrimination, harassment, victimisation and other conduct prohibited by the act, by putting in place a transparent mechanism for setting the standard cost-effectiveness threshold used in the development of NICE guidance to help support consistent patient access to treatments for all patients, regardless of their characteristics
• advance equality of opportunity between people who share a protected characteristic and those who do not by putting in place a clear mechanism for setting the NICE cost-effectiveness threshold that supports consistent patient access to NHS services on the basis of the evidence
• foster good relations between people who share a protected characteristic and those who do not, by securing fair and consistent access to NHS care for all patients

National Health Service Act 2006

The National Health Service Act 2006 also contains a number of overarching duties on the Secretary of State which apply to the exercise of functions, including in relation to the health service. These duties include the following.

Duty to continue to promote a comprehensive health service in England (section 1)

The view of DHSC is that these proposals support the duty to promote a comprehensive health service. The NICE cost-effectiveness threshold is an important tool for ensuring that the NHS budget maximises health gain for NHS patients and is aligned with wider government priorities, which may extend beyond NICE’s remit. Granting a power on the democratically elected government to set the core threshold that is used in the development of NICE guidance will ensure that the threshold can be amended as required in response to changing demands and needs of the healthcare system.

Duty as to improvement in quality of services (section 1A)

The view of DHSC is that this proposal supports the duty to improve the quality of service. Transferring the power to set the core cost-effectiveness threshold to ministers will more directly empower ministers to ensure that the threshold used by NICE is aligned with wider priorities to improve the quality of NHS services.

Duty as to reducing inequalities (section 1C)

DHSC has also considered section 1C and is of the view that this proposal supports the duty to reduce inequalities. The NHS in England will continue to be legally required to make funding available for treatments recommended in technology appraisal and highly specialised technology evaluations, which support consistent patient access to clinically and cost-effective treatments. The NHS will also continue to be expected to take full account of NICE’s other guidance and recommendations in designing services that meet the needs of their local populations.

Duties under the Family Test

In developing policy, consideration needs to be given to the effect it will have on family relationships and functioning. In particular, we are required to have regard to any negative impact on:

• family formation
• families going through key transitions
• ability of family members to play a full role in family life
• families before, during and after couple separation
• families most at risk of deterioration of relationship quality and breakdown

These proposals are designed to grant a power to the Secretary of State to direct NICE as to the cost-effectiveness threshold that NICE will use in the development of its guidance. NICE would remain responsible for the guidance and recommendations that it develops, and our view is that these proposals will not, therefore, have a direct impact on family relationships and functioning.

Environmental principles policy statement duty

On 1 November 2023, the environmental principles policy statement duty came into force in relation to England, Wales and Scotland. This places a legal duty on UK ministers to have due regard to the government’s environmental principles policy statement when developing policy.

The statement sets out 5 internationally recognised environmental principles to be considered. The 5 principles work together to help create opportunities to avoid, minimise and remedy environmental damage and improve environmental protection.

The 5 principles are:

• integration - environmental protection should be integrated into the making of policy
• prevention - damage to the environment should be prevented before it has occurred and/or existing damage should be contained
• rectification at source - damage to the environment should be tackled at its origin
• polluter pays - the costs of pollution should be borne by those causing it, wherever possible
• precautionary - policymakers need to make a reasonable assessment of the environmental risk, particularly where there is a lack of scientific certainty

DHSC’s view is that there will be no change to environmental impacts as a result of this policy. NICE itself will remain responsible for considering any environmental impacts in the development of its guidance and recommendations.

Northern Ireland considerations

In Northern Ireland new policies must be screened under section 75 of the Northern Ireland Act 1998, which places a statutory duty on public authorities, to mainstream equality in all its functions.

In addition, new or revised policies must be rural proofed in line with the Rural Needs Act (Northern Ireland) 2016, which requires public authorities to have due regard to rural needs.

Northern Ireland normally adopts NICE guidance and recommendations, and we do not consider that our proposals risk impacting different people differently with reference to their protected characteristics nor geography (that is, rural need).

How to respond

Please respond using the online survey.

Do not provide personal data when responding to free-text survey questions. Any personal data included will be removed prior to analysis of these responses and will therefore not be considered in the consultation outcome.

The consultation is open for 5 weeks and will close at 11:59pm on 13 January 2026. If you respond after this date, your response will not be considered.

If you have any queries on this consultation, contact mbnicesponsorteam@dhsc.gov.uk. Do not send your consultation answers or any personal information to this email address.

Consultation questions

You must live or work in the UK to take part in this survey. If you are responding on behalf of an organisation, it must operate or provide relevant services in the UK.

About you

In what capacity are you responding to this survey?

• On behalf of an organisation
• An individual sharing my professional views
• An individual sharing my personal views and experiences

Questions for individuals sharing their personal or professional views

Where do you live in the UK? (Optional)

• England
• Scotland
• Wales
• Northern Ireland
• I live outside the UK

If you live in England, which area of England do you live in? (Optional)

• North East England
• North West England
• Yorkshire and the Humber
• East of England
• East Midlands
• West Midlands
• South East England
• South West England
• London

Questions for individuals sharing professional views

What sector do you work in?

• Public sector
• Private sector
• Not for profit
• Other, please specify

Do you work for the NHS? (Optional)

• Yes
• No

What is the main area of focus of your work?

• Academic
• Advocacy
• Education
• Emergency services
• Finance
• Life sciences
• Local government
• National government
• NHS or health service delivery
• Social care
• Other, please specify

Are you responding as a healthcare professional? (Optional)

• Yes
• No

Questions for those responding on behalf of an organisation

What is the name of your organisation? (Optional)

Where does your organisation operate or provide services? (Select all that apply)

• England
• Wales
• Scotland
• Northern Ireland
• The whole of the UK
• Outside of the UK

What type of organisation are you responding on behalf of? (Optional)

• Business
• Not for profit organisation
• Academic institution
• Public sector body
• Other, please specify

Proposed amendments to the NICE regulations

Proposal 1

Do you agree or disagree that a ministerial power of direction, as outlined under proposal 1 above, should be limited to the NICE standard cost-effectiveness threshold?

• Agree
• Neither agree nor disagree
• Disagree
• Don’t know

Please explain your answer. (Optional, maximum 200 words)

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.

• Agree
• Neither agree nor disagree
• Disagree
• Don’t know

Please explain your answer. (Optional, maximum 200 words)

Proposal 2

Do you agree or disagree that NICE should not be required to consult on any proposed changes to its procedures that are necessary as a result of a ministerial direction on cost-effectiveness thresholds?

• Agree
• Neither agree nor disagree
• Disagree
• Don’t know

Please explain your answer. (Optional, maximum 200 words)

Additional comments

If there are any further comments you would like to make in relation to the proposed regulatory changes set out within this consultation, please include them here. (Optional, maximum 300 words)

Privacy notice 

We manage the information you provide in response to this consultation in accordance with DHSC’s personal information charter and privacy notice, which explain your rights under the Data Protection Act 2018 (DPA) and the United Kingdom General Data Protection Regulation.

The information we receive may be published or disclosed in accordance with the access to information regimes (primarily the Freedom of Information Act 2000 (FOIA), the DPA and the Environmental Information Regulations 2004). Under FOIA, personal data is not disclosed. The only data that would be disclosed of the people that have filled out this questionnaire is fully anonymised and/or aggregated data.

DHSC will process your personal data in accordance with the DPA, and in most circumstances your personal data will not be disclosed to third parties.