Signature
EJP_w = (w * lambda * Delta_E - Delta_C_other) / U
| Inputs | Definition | Unit |
|---|---|---|
w | QALY weight for severity: 1 where no severity modifier applies, otherwise 1.2 or 1.7 under PMG36 table 6.1 | multiplier, no unit |
lambda | Cost-effectiveness threshold before any severity weight | money per QALY |
Delta_E | Expected discounted QALYs per patient with the medicine minus those with the comparator, before weighting, above zero | QALYs per patient |
Delta_C_other | Expected discounted incremental cost per patient excluding the medicine's acquisition cost, net of savings | money per patient |
U | Discounted number of units of the medicine per patient, above zero | units per patient |
EJP_w | Economically justifiable price per unit when the QALY gain carries the severity weight w | money per unit |
|---|
Function
Economically justifiable price function solving the ICER for the unit price
Maps a cost-effectiveness threshold, the incremental QALYs per patient, the incremental cost per patient other than the new medicine's acquisition cost and the discounted number of units per patient to the highest price per unit at which the incremental cost-effectiveness ratio equals the threshold. It solves the two-option ICER of HE-FM-ICER-001 with the medicine's price as the unknown, and the same price sets the incremental net monetary benefit of HE-FM-NMB-002 to zero. The algebra matches the break-even price HE-FM-BEA-001 and, per patient, the payer's maximum price HE-FM-BARG-002; this package adds the threshold range, the NICE severity weight and the probabilistic forms used in an EJP analysis. Notation follows the Economically Justifiable Price article.
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Implementations
Excel
Severity-weighted EJP from named cells
With the weight in a cell named SeverityWeight and the other inputs in Threshold, DeltaE, DeltaCOther and Units, Excel returns the severity-weighted EJP per unit.
=(SeverityWeight*Threshold*DeltaE-DeltaCOther)/Units
Assumptions
Severity weight multiplies the QALY gain only
The weight applies to the incremental QALYs, not to the costs. It is set from the QALY shortfall of the population for which the medicine will be used, with discounting at the reference-case rate, and the shortfall measure that implies the greater severity sets the weight (PMG36 sections 6.2.16 to 6.2.18).
Worked examples
Drug X EJP with a severity weight of 1.2
With a severity weight of 1.2 Drug X's EJP at GBP 25,000 per QALY rises from GBP 740 to GBP 900 per pack, as in the article.
w = 1.2; lambda = 25000; Delta_E = 0.80; Delta_C_other = 1500; U = 25; EJP_w = 900
Drug X EJP with a severity weight of 1.7
With the higher weight of 1.7 the EJP would be GBP 1,300 per pack (computed here for illustration).
w = 1.7; lambda = 25000; Delta_E = 0.80; Delta_C_other = 1500; U = 25; EJP_w = 1300
Drug X EJP with no severity weight
A weight of 1 returns the unweighted EJP of GBP 740 per pack, a limiting case that checks the implementation.
w = 1; lambda = 25000; Delta_E = 0.80; Delta_C_other = 1500; U = 25; EJP_w = 740
Common errors
Applying the severity weight to the unweighted EJP
Multiplying Drug X's unweighted EJP of GBP 740 by 1.2 gives GBP 888 per pack instead of GBP 900, because it also scales Delta_C_other, which the weight does not touch (computed here for illustration). The weight belongs on the QALY gain.
Sources
NICE QALY weights for severity
National Institute for Health and Care Excellence. NICE technology appraisal and highly specialised technologies guidance: the manual (PMG36). London: NICE; published 31 January 2022, last updated 31 March 2026. Sections 6.2.16 to 6.2.18 and table 6.1: the committee may apply a greater weight to QALYs for conditions with a high degree of severity; weights of 1.2 and 1.7 are set by absolute and proportional QALY shortfall, whichever implies the greater severity.
Canonical Identity
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