Reimbursement
Quality-Adjusted Life Year(QALY)
In one line
Outcome metric combining length and quality of life used in HTA.
Definition
A QALY equals one year of life in perfect health. HTA bodies use cost-per-QALY thresholds (NICE: £20–30K) to judge cost-effectiveness. The U.S. ICER applies similar methodology informally.
QALYs combine length and quality of life using utility weights between 0 (death) and 1 (full health), often measured with the EQ-5D questionnaire. NICE updated its thresholds and methods in recent years, including a severity modifier. In the US, the Inflation Reduction Act bars Medicare from using QALYs in drug price negotiation, and critics argue they undervalue people with disabilities.
Why it matters
Widely used outside the U.S. The U.S. has restricted use of QALYs in Medicare coverage decisions for certain age and disability populations.
Common pitfalls
- •A common pitfall is misunderstanding that QALYs are a direct measure of MedTech quality or safety, rather than an economic metric for cost-effectiveness.
- •Failing to consider regional differences in QALY thresholds and their impact on market access strategies can lead to significant commercial challenges.
- •Misinterpreting the U.S. restrictions on QALY use for certain populations in Medicare decisions can result in ineffective reimbursement strategies.
- •Assuming that a product with clinical benefits will automatically achieve positive QALY assessment without considering its cost implications is a frequent mistake.
Sources