NICE’s Selective Application of Differential Discounting: Ambiguous, Inconsistent, and Unjustified

Abstract

The National Institute for Health and Clinical Excellence (NICE) recently recommended differential discounting of costs and health effects in the economic appraisal of health care interventions in certain circumstances. The recommendation was published in an amendment to NICE’s Guide to the Methods of Technology Appraisal. The amendment states that differential discounting should be applied where “treatment effects are both substantial in restoring health and sustained over a very long period (normally at least 30 years).” Renewed interest in differential discounting from NICE is welcome; however, the recommendation’s selective application of differential discounting raises a number of concerns. The stated criteria for applying differential discounting are ambiguous. The rationale for the selective application of differential discounting has not been articulated by NICE and is questionable. The selective application of differential discounting leads to several inconsistencies, the most concerning of which is the lower valuation of health gains for those with less than 30 years remaining life expectancy, which can be interpreted as age discrimination. Furthermore, the discount rates chosen by NICE do not appear to be informed by recent advances in the theoretical understanding of differential discounting. NICE’s apparent motivation for recommending differential discounting was to ensure a favorable cost-effectiveness ratio for a pediatric oncology drug. While flexibility may be appropriate to allow some interventions that exceed conventional cost-effectiveness thresholds to be adopted, the selective adjustment of appraisal methods is problematic and without justification