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The National Institute of Health and Care Excellence (NICE) recently published a review of discounting practice and theory as part of a consultation on its current methods guidelines. The review examines the case for revision or retention of current methods. The changes considered include eliminating favourable rates in certain special cases and the reduction of the base-case rate for costs and health effects from 3.5 to 1.5%. The review also notes the potential need to reduce the cost-effectiveness threshold to accommodate a discount rate reduction, explaining that an agreement between the UK government and the pharmaceutical industry proscribes changing NICE's threshold range until the end of 2023. We believe NICE should be commended for a useful overview of the existing literature and relevant issues. We firmly endorse NICE's view that favourable discount rates are not a good way to apply a preference for certain interventions. Similarly, we support the option of reducing the discount rate to 1.5%, which better accords with real government borrowing costs. We suggest further work to clarify the appropriate theoretical basis for the NICE's social discount rate and the sensitivity of the threshold to changes in discounting. The prospects of a necessary discount rate reduction appear to depend on whether a threshold reduction can be achieved within NICE's current range or if the range itself must be revised downwards. NICE has usefully informed the debate around discount rates. Ultimately, the path to a methodologically consistent and evidence-based revision of discounting depends on whether NICE needs to adjust the threshold too and if it is free to do so. [ABSTRACT FROM AUTHOR]

The UK's National Institute for Health and Care Excellence (NICE) recently launched a consultation on the methods it uses to evaluate new health technologies, and has highlighted the issue of how 'modifiers', including equity weights, should be incorporated into its processes. The practice of applying equity weights to specific population subgroups, as a means for increasing the effective cost-effectiveness threshold for some new health technologies, is well established in health technology assessment. It is also the subject of extensive discussion in the academic literature. In this paper, we demonstrate that NICE's current approach to equity weighting has the effect of reducing both population health and equity-weighted population health, a fundamental problem that appears to place NICE in contravention of its principles and obligations. We consider two potential methods for modifying NICE's current approach to address this problem. We also consider the merits of NICE abandoning its current approach to equity weighting and adopting a standard 'net benefit' approach in its place. We find that adopting a standard 'net benefit' approach is the most desirable option, as it provides for the most transparency while avoiding specific issues that arise when attempting to modify NICE's current approach. Regardless of the approach NICE uses for equity weighting, we find that protecting the health of National Health Service patients requires that some new technologies be evaluated using an effective cost-effectiveness threshold lower than the 'supply-side' cost-effectiveness threshold. This poses a particular challenge for NICE, given its obligations under the 2019 'Voluntary Scheme' between the UK pharmaceutical industry, the National Health Service, and the UK Government. We conclude by making some recommendations as to how NICE can move forward with the use of 'modifiers' in its decision making. [ABSTRACT FROM AUTHOR]