James Raftery: NICE’s proposed new QALY modifier for appraising highly specialised technologies

After a consultation on changes to its methods for appraising health technologies, the National Institute for Health and Care Excellence (NICE) has gone public with its way forward. As discussed previously, the consultation sought views on four items:

  1. Introduce a “fast track” NICE technology appraisal process for the most promising new technologies, which fall below an incremental cost effectiveness ratio of £10 000 per quality adjusted life years (QALY).
  2. Operate a “budget impact threshold” of £20 million, set by NHS England, to signal the need for a dialogue with companies to agree special arrangements to better manage the introduction of new technologies recommended by NICE.
  3. Vary the timescale for the funding requirement when the budget impact threshold is reached or exceeded, risking disruption to the funding of other services.
  4. Automatically fund, from routine commissioning budgets, treatments for very rare conditions (highly specialised technologies (HSTs)) up to £100 000 per QALY, and provide the opportunity for treatments above this range to be considered through NHS England’s process for prioritising other highly specialised technologies. 

According to the papers from NICE’s public board meeting of 15 March 2017, minimal change is proposed on items 1 to 3, but 4 is subject to change. On highly specialised technologies (usually less than one thousand patients), the consultation found considerable opposition, particularly from companies and patient/carer organisations (77% of whom said they had received payments from industry). 

NICE now proposes to introduce “a QALY modifier,” which could raise the threshold to
£300 000 for some highly specialised technologies. This modifier involves weighting lifetime QALY gains by size of gain, with a standard weight of 1 for less than or equal to 10 QALYs, 2 for 11-29 QALYs, and 3 for greater than or equal to 30 QALYs (Table 1). 

Table 1: NICE’s new weighting of QALYs in HST by incremental QALY gain

Incremental QALYs gained (per patient, using lifetime horizon) Weight versus 100k/QALY
Less than or equal to 10 1
11 – 29 Between 1 and 3 (using equal increments)
Greater than or equal to 30 3


Source: NICE and NHS England consultation of changes to the arrangements for evaluating and funding drugs and other health technologies assessed through NICE’s technology appraisal and highly specialised technologies programmes. Copied from table 1: Weighting of QALYs in HST. Para 21. Item 9.2. in Agenda and Papers. Public Board Meeting, 15 March.

Some points are worth making on highly specialised technologies and the proposed changes.

Firstly, on HSTs, NHS England’s budget covers the commissioning of both services and medicines and is not ringfenced. The budget allocated for highly specialised services (HSTs) in 2013–14 was £544 million, of which the spend on high cost drugs was £156 million. HSTs thus account for a small (around 0.5%) share of NHS spending, most of which is not (yet, at least) on drugs.

Secondly, the report notes that in its appraisals of HSTs, QALY large gains are common and that perhaps three recent HST appraisals would have received some weight. A quick check shows that NICE has appraised only four HST topics (Table 2). Of these, the guidance on eculizumab for atypical hemolytic-uremic syndrome (aHUS) cited a QALY gain of just over 10. No estimates of QALY gains were reported in the guidance on the other three topics, and the relevant figures were redacted in the reports of the evidence review groups. NICE acknowledges that the future relevance of the QALY modifier cannot be predicted. 

Table 2: Topics appraised by NICE’s HST programme

Guidance Drug Disease Cost per patient year Estimated eligible patients NICE Recommendation
HST1 Eculizumab Atypical haemolytic uraemic syndrome (aHUS) £340 200 74 (highly uncertain) Yes with PAS
HST2 Elosulfase alfa, Mucopolysaccharidosis type IVa (MPS IVa) £394 680 74-77  eligible (co est) Yes as managed access
HST3 Ataluren, Duchenne muscular dystrophy (dystrophin gene) £220 256 Not known Yes with PAS
HST4 Migalastat Treating Fabry disease in people over 16 years of age with an amenable mutation, £210 000 142 Yes with PAS


Notes: Eligible patient numbers for HST4 cited in guidance, with authors’ best estimates for others.

Source: Table derived from NICE’s published HST appraisals

Thirdly, estimating the lifetime QALY gain is difficult, requiring extrapolation from sparse data. Estimates of lifetime QALY gain seem more likely to rely on mortality rather than morbidity, in turn implying that patients must be young enough to accrue higher QALYs. QALY gain has some resemblance to previous suggestions by NICE, such as “QALY shortfall,” but differs in being linked to the health gain due to particular technologies.

Fourthly, more generally, while there may be an advantage of continuing to frame the argument within the QALY framework, no rationale has been provided for either the £100 000 or the new £300 000 thresholds. Any such justification would need to justify first, the increase by a factor of 5 for HSTs to get from the basic £20 000 threshold to £100 000, and then justify an additional increase by a factor of 3 to reach the £300 000 threshold, making a multiple of 15.

Fifthly, the QALY modifier appears to enable NICE to appraise all HSTs, thus killing off the proposal that topics that NICE could not recommend would be “migrated” to NHS England’s Clinical Priorities Advisory Group.

Finally, the proposed QALY modifier’s increasing weight with magnitude of QALY gain conflicts with what little evidence we have about what the public might prefer. In the largest study yet on the topic, commissioned to inform NICE, public views were found to favour technologies with large QALY gains but at a diminishing rate. The new QALY modifier may not only lack a rationale, but also seems to move in the opposite direction to the evidence.

James Raftery is a health economist with several decades’ experience of the NHS. He is professor of health technology assessment at Southampton University. A keen “NICE watcher,” he has provided economic input to technical assessment reports for NICE, but has never been a member of any of its committees. The opinions expressed here are his personal views.

Competing interests: The author has no further interests to declare.