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    Incremental Cost-Effectiveness Ratio

    Cost per additional unit of health outcome (often QALY) versus comparator.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

    Definition

    ICER = (Cost_new − Cost_comparator) / (Effect_new − Effect_comparator). A foundational HTA metric. The U.S. organization ICER (Institute for Clinical and Economic Review) produces influential value assessments.
    What the regulation says
    While not directly mandated by specific MedTech regulations like the EU MDR or FDA 21 CFR, the Incremental Cost-Effectiveness Ratio (ICER) is a critical metric in Health Technology Assessments (HTA), which often influence market access and reimbursement decisions. Regulatory bodies and payers consider HTA outcomes to evaluate the value proposition of new medical devices and treatments.

    What this means in practice

    Often confused with the U.S. organization of the same name. Manufacturers must distinguish between the math and the organization in commercial conversations.

    Examples

    • A manufacturer calculating the ICER for a new surgical robot compared to traditional open surgery to demonstrate its cost-effectiveness to a national health service.
    • A MedTech company using ICER results to justify the pricing of a novel diagnostic device during negotiations with private insurers.
    • During a health economic submission, a company provides an ICER analysis to a European HTA body to support inclusion of their device on a national reimbursement list.
    Common pitfalls
    • •Confusing the mathematical concept of ICER with the Institute for Clinical and Economic Review, an organization that performs HTA using ICER.
    • •Failing to consider the specific thresholds for cost-effectiveness that vary by country and payer.
    • •Not adequately accounting for all relevant costs and effects in the ICER calculation, leading to an inaccurate representation of value.
    • •Presenting ICER without appropriate context or sensitivity analyses, which can misrepresent the robustness of the findings.

    Frequently asked questions

    ICER does not directly impact regulatory approval, but it significantly influences reimbursement and market access post-approval. A favorable ICER can strengthen a product's value proposition for payers.
    Grouped by theme

    Primary references

    3 sources
    Link health: 3 verified· last checked 2026-06-20
    ICER·1AdvaMed·1AMA·1
    1. 1
      ICER (US)
      Verified
      ICERicer.org
    2. 2
      AdvaMed - Payment & Coverage
      Verified
      AdvaMedadvamed.org
    3. 3
      AMA CPT Resources
      Verified
      AMAama-assn.org

    Inline markers like [1] jump to the matching reference above.