Cost-effectiveness: introduction to QALY and ICER

Executive Summary

Health technology appraisal (HTA) bodies, such as the National Institute for Health and Care Excellence (NICE, the HTA body for England) are tasked with making difficult decisions on which medicines should, or shouldn’t, be available to the public healthcare systems. As budgets are limited, it is necessary to choose how to spend the available money to best effect, factoring in the views of society. Incremental cost-effectiveness ratios (ICERs) and quality-adjusted life years (QALYs) are tools used by some HTA bodies to compare vastly different treatments, adding objectivity to their processes.

QALY and ICER are defined, and their usage explained, on this page.