6.2 Cost-effectiveness thresholds

ICERs provide an estimate of cost-effectiveness but cannot alone necessarily be used to understand whether an intervention is cost-effective.

An ICER could be compared to a cost-effectiveness threshold (CET) in order to understand whether an intervention is cost-effective. A CET is the maximum amount that a decision-maker is (or should be) willing to pay for an additional unit of health outcome. Therefore, if the estimated ICER is less the CET, then the intervention is considered cost-effective and worth implementing. If the estimated ICER is greater than the CET then the intervention is considered not cost-effective.

In principle the CET is meant to represent the opportunity cost of health spending in a country. Some countries have explicit CETs that have been endorsed by decision-makers, such as the UK and Thailand (Bertram et al., 2016). There are other countries that have implicit CETs, but they do not reveal the precise value. Many countries do not have defined CETs; however, there are researcher-generated estimates of CETs for most countries that can be used to understand whether a setting may be cost-effective in these settings (Woods et al. 2016; Ochalek, Lomas and Claxton, 2018). Using a value of 1–3 × gross domestic profit (GDP) per capita used to be a recommended threshold by the WHO and although it is no longer recommended, this threshold is still commonly used (Kazibwe et al., 2022).