The calculations are complicated, but imagine that a cancer treatment costs $100,000 and that it extends the life of the average patient by four years. That means the cost of the treatment per year gained is $25,000.
Now imagine that for part of those four years the patient will be in pain and bedridden. NICE might figure the quality of that life at 50 percent of perfect health. Under NICE's formula, that would make the drug half as cost-effective. In other words, the result would be $50,000 per quality-adjusted year gained.
NICE has set a maximum that it will spend on a treatment: about $47,000 per quality-adjusted year gained.
NICE tends to assume, without always performing calculations, that most common treatments are cost effective -- including insulin for diabetes, cholesterol-lowering drugs for heart disease, and kidney transplants.
Instead, NICE analyzes only selected therapies, such as expensive new drugs that may extend life at the end of life. It has calculated that some of the more expensive drugs meant to slow the progression of Alzheimer's Disease and some cancers fall below the cost-effectiveness threshold. In such cases, NICE says, the NHS shouldn't pay for the drugs.
NICE chairman Michael Rawlins acknowledged that his agency's decisions deprive some patients of drugs that may extend their lives by several months or more.
"We do recognize that the end of life is a very special time," Rawlins said. "[It] allows people to attend weddings, see a grandchild born, seek forgivenesses."
But he argued that if Britain spends a lot of money at the end of life, "we're going to have to deprive other people of cost-effective care." Rawlins said that might mean spending less money at the beginning of life -- and might result in a higher infant mortality rate.