Irish Cost-Effectiveness Threshold (45,000/20,000 EUR per QALY)

The Irish Cost-Effectiveness Threshold is a benchmark used to decide whether a health intervention, especially a drug, offers good value for money. It is currently set at €45,000 per quality-adjusted life-year (QALY), meaning treatments costing less than this per additional year of healthy life are generally considered cost-effective. A lower threshold of €20,000 may apply in some cases. The threshold is set through agreements between the government and the pharmaceutical industry, but concerns exist about its alignment with actual healthcare opportunity costs and transparency.

How it works

The Irish Cost-Effectiveness Threshold is a value set at €45,000 per QALY, used in health technology assessment to guide reimbursement decisions. A reduced threshold of €20,000 per QALY may be applied under certain conditions. The threshold is determined through periodic state-industry negotiations rather than empirical estimation of opportunity costs. Evidence suggests the current threshold may exceed the true opportunity cost, potentially leading to inefficient resource allocation and net harm to population health. Transparency in its application and adherence is limited. Alternative approaches, such as an auction mechanism for prioritizing interventions by cost per QALY, have been proposed to improve allocative efficiency.

HTA domains

Costs & Economic Evaluation

Categories

Cost-effectiveness Modelling

Assumptions

The threshold assumes that interventions below €45,000 per QALY generate positive net health benefits; however, this may not reflect the true opportunity cost of displacing existing services. It also assumes that periodic industry-state agreements are a sufficient basis for threshold setting, despite limited empirical grounding.

Strengths

Provides a clear, consistent benchmark for reimbursement decisions; facilitates negotiation between the state and pharmaceutical industry; simplifies decision-making in health technology assessment.

Limitations

Likely set too high relative to true opportunity costs, risking inefficient resource use and potential net harm to population health; lacks transparency in application; not empirically derived; may conflict with legal requirements for equitable resource allocation.

Also known as

Ireland QALY threshold, Irish CEA threshold, €45,000 per QALY threshold, State-Industry Drug Pricing Threshold (Ireland)

Beta record. Based on the original catalogue summary; primary-source enrichment pending.