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Value-based assessment

NICE is set to modify the way it operates, but the changes shouldn’t come as a surprise
Value-based assessment

Last month I attended a NICE public board meeting where proposed changes to the technology appraisal methods guide were discussed. These changes will allow the incorporation of burden of illness and wider societal benefits into what has become known as value-based assessment.

The proposed changes follow the terms of reference provided to NICE by the Department of Health in July 2013. These terms outline that methods should “include a simple system of weighting for burden of illness that appropriately reflects the differential value of the treatment from the most serious conditions” and “include a proportionate system for taking account of wider societal benefits”. The terms of reference specifically state that the current 'end of life' approach should be encompassed into the system of burden of illness weights.

The 2014 version of the UK's Pharmaceutical Price Regulation Scheme also outlines that NICE will not negotiate, publicly set, or publicly indicate prices and that its current cost-effectiveness threshold will be retained. 

The proposed changes are therefore unsurprising, and the overall message from NICE is that the outcome of its technology appraisals and their format will not change a great deal.

The two main proposed changes to the methods guide for technology appraisals regard how to incorporate burden of illness and wider societal benefit. 

Burden of illness
It is highlighted within the proposals that quantitative techniques for applying burden of illness measures are still in their infancy and that NICE will provide discretion to the Appraisal Committees to determine appropriate QALY (quality-adjusted life year) weightings. The proposals define burden of illness as the “total amount of future health lost for people with a condition, measured in QALYs”. This “QALY shortfall” can be determined as the absolute or proportional shortfall:

  • Absolute shortfall = Total QALYs expected in those who do not have the condition – Total QALYs with the condition
  • Proportional shortfall = Total QALY shortfall / Total QALYs without the condition

The proportional shortfall incorporates end of life considerations. Therefore NICE appears to prefer this method for burden of illness.

Worked examples were outlined in the documents provided at the meeting and are available on the NICE website (

Wider societal benefit
The absolute shortfall approach described for burden of illness was considered by NICE to be a good proxy for incorporating wider societal benefit as it takes into account a person's ability to interact and contribute to wider society, given his condition. This approach was favoured over a net monetary impact on society approach which would consider the balance of resources consumed versus those produced (eg paid employment) with and without the treatment.

NICE committees could soon accept new elements for technology appraisals

In summary, it is proposed that burden of illness and wider societal benefit will be taken into account using both the absolute and proportional QALY shortfall calculations and that the appraisal committees will be able to take these elements into account when appraising technologies. 

Other proposed changes to the methods guide include removing the specific reference to a £30,000 per QALY ICER (incremental cost-effectiveness ratio) threshold and that a maximum QALY weighting of 2.5 is suggested for plausible ICERs above £20,000 per QALY.

NICE was keen to remind meeting attendees that it will be a “genuine consultation” with all comments taken into account. Consultation on the proposed methods is due to begin this month.

If you would like to know more about HTA or value based assessment please email or visit

Article by
Ruth Howells

director of health technology assessment (HTA) at Abacus International.

25th February 2014

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