QALY (Quality-adjusted life year)

A Quality-Adjusted Life Year (QALY) is one year of life weighted by health-related quality of life, where 1.0 represents one year in perfect health and 0 represents death (negative values for states worse than death are permissible). QALYs are computed by multiplying time spent in a health state by its utility weight, typically derived from instruments like EQ-5D or SF-6D. Originally formalised by Weinstein and colleagues, QALYs anchor cost-effectiveness analyses in health technology assessment: the UK's NICE applies a reference threshold of £25,000-£35,000 per QALY gained since April 2026 (previously £20,000-£30,000), while Germany's IQWiG uses an efficiency frontier approach rather than a fixed threshold. A treatment costing £15,000 that yields 2 QALYs (£7,500/QALY) would generally be deemed cost-effective by NICE.