Willingness to pay for new medicines: a step towards narrowing the gap between NICE and IQWiG

The question of how to set the cost-effectiveness threshold for new, innovative medicines is a matter of ongoing controversy. One prominent proposal suggests that the cost-effectiveness threshold adopted by the U.K. National Institute for Health and Care Excellence (NICE) should represent the opportunity cost for the U.K. National Health Service resulting from the adoption of new medicines. The purpose of this article is to compare this proposal for the U.K. with the approach chosen by the Institute for Quality and Efficiency in Health Care (IQWiG) in Germany, which relies on indication-specific cost-effectiveness thresholds.

The ‘ideal’ NICE and IQWiG surprisingly share the fundamental principle of inferring the willingness to pay from existing care. For this and other reasons, indication-specific thresholds based on IQWiG’s methodology do not lead to more inefficiency at the health system’s level than a generic threshold based on the ‘ideal’ NICE (keeping other conditions the same). Also, applying either decision rule to one country will yield a similar long-term growth in population spending. Assuming that everything else is equal, both decision rules are predicted to decrease long-term expenditure growth. Convergence of the two decision rules would require, among others, ruling out waste in the ‘ideal’ NICE’s approach and, for IQWiG’s approach, using the same relative weights for life expectancy and health-related quality of life as the quality-adjusted-life-year model.

This article shows that both decision rules have notable commonalities in terms of inferring the willingness to pay from existing care and the projected impact on long-term growth in population spending.