Critique of CHE Research Paper 81 : Methods for the Estimation of the NICE Cost Effectiveness Threshold

This report is a critique of the Centre for Health Economics Research Paper No. 81 (CHERP81), which estimates that the marginal cost of a QALY for the NHS in England in 2008/9 was £12,936. There is much to admire in the approach, detailed analysis, and reporting set out in CHERP81 and we recommend detailed reading of it. The focus of this OHE Occasional Paper is, however, on the points where we take issue with or have queries about the CHERP81 work. The magnitude of the marginal cost of a QALY in the NHS is important as it informs the cost effectiveness threshold used in health technology assessments (HTAs) by the National Institute for Health and Care Excellence (NICE). Indeed this was the motivation for the commissioning of the study by the Medical Research Council (MRC) as part of a programme of methodological research relevant to NICE. Understanding the expected QALYs displaced in the NHS by a NICE recommendation is an important part of helping NICE make optimal decisions in relation to the approval of new technologies. The CHERP81 estimate for 2008/9 is lower than NICE’s announced threshold range for approving new products of £20,000 to £30,000 per QALY