In May 2025, the President of the United States issued an Executive Order to announce that the U.S. government would address the fact that Americans spend more for medicines than patients and taxpayers in other high-income countries, including through the implementation of the Most Favoured Nation (MFN) pricing policy. In many ex-US countries, the quality-adjusted life year (QALY) is a key metric used by HTA bodies when assessing the value of new medicines and is often an important input to the pricing and reimbursement process.
Although commonly used, QALYs do not fully capture the total patient value of a medicine. In the U.S., the Social Security Act therefore bans the use of QALYs in the U.S. Medicare program. Yet, if the proposed MFN pricing policy in the U.S. is implemented, the Medicare program would rely on prices in other countries that are determined based on QALYs as benchmarks for prices of medicines in the U.S.
Against this background, this study examines pricing and reimbursement policies for innovative medicines across 19 high-income countries and determines whether and how they use QALYs.
We find that 15 of the 19 countries (79%) use QALYs as a key tool to inform reimbursement decisions.
Three countries have explicit thresholds clearly defined in HTA guidelines, namely Ireland, the Netherlands, and England in the UK. For another 12 countries, thresholds are implicit and either implied in other official documents, estimated based on cost per QALY thresholds inferred from past HTA decisions or interviews with experts, or commonly used thresholds in peer-reviewed publications. In the remaining four countries, no thresholds are available.
Many countries apply modifiers such as disease severity, disease rarity, for oncology treatments, for highly specialised treatments, and more to increase cost per QALY thresholds for certain patients or treatments. There is thus some flexibility in most countries in assessments based on QALYs. However, these are often informal and qualitative and thus lack clear rationale or transparency as to how they impact cost per QALY thresholds.
The study was commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA).
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