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We're updating this page following the publication of our new methods, processes and topic selection manuals. Our previous manuals still apply to evaluations that started before 1 February 2022. The new manuals apply to evaluations that began after this date.

From 1 April 2017 we introduced a budget impact test for technologies within the Technology Appraisal and Highly Specialised Technologies programmes.

This will assess the financial impact of a technology over the first 3 years of its use in the NHS.

If the budget impact exceeds £20million, in any of the first 3 years, NHS England may engage in commercial discussions with the company. These discussions are designed to mitigate the impact that funding the technology would have on the rest of the NHS.

NHS England has indicated that it will engage in commercial discussions on behalf of clinical commissioning groups, for locally commissioned technologies that are appraised by NICE.

A commercial discussion may not lead to an agreement between NHS England and the company. In such cases, NHS England may request a variation to the statutory funding requirement.

What this means for companies

Companies can approach NHS England before an appraisal/evaluation begins to engage in commercial discussions at the earliest opportunity.

NICE will share the budget impact test information with companies during the appraisal to inform any commercial discussions.

Why are we introducing the budget impact test?

The NHS is committed to providing access to new treatments by introducing new technologies. It needs to do this in a way that is good for both UK business and the financial sustainability of the NHS.

The budget impact test is one way NICE can help the NHS achieve this goal.

We are working more closely with NHS England to help the NHS:

  • better manage access to new drugs and medical technologies by assessing the Budget Impact of technologies for the NHS
  • provide an environment that encourages the life sciences industry and the NHS to work together in the best interests of patients.

The impact of the application of the budget impact test will be reviewed by NICE and NHS England in 2020.