The UK National Institute for Clinical Excellence (NICE) was set up in 1999 to advise the National Health Service (NHS) on the use of new technologies largely, but not exclusively, on the basis of their clinical and cost effectiveness. There have been problems with this, as with any developing system, most of which have arisen from issues not directly under the control of NICE. Despite this, NICE has already achieved a pivotal role in determining the uptake of new therapies into the NHS.In the area of neuropsychiatric therapies, NICE has examined a number of topics and has generally facilitated the increased use of the agents examined, approving the use, within limitations, of such drugs as riluzole, atypical antipsychotics and cholinesterase inhibitors. Although the use of some of these therapies had been growing, it had previously been restricted by funding in the NHS. As a result of NICE guidance, these funding restrictions have generally been lifted.NICE has rejected one area of neurological therapy so far – that of interferon-β products and glatiramer acetate for multiple sclerosis – on the grounds of clinical uncertainty about long-term benefits and poor cost effectiveness. However, the UK Government has created a novel risk-sharing scheme in collaboration with the sponsoring companies to make these drugs available at a level of cost effectiveness acceptable to the NHS. The feasibility of this scheme is as yet unclear. This might be seen as either a triumph for NICE or as an undermining of it for political ends.One interesting aspect that is more prominent in neuropsychiatric disorders than in other areas of NICE activity has been the power of patient advocacy in encouraging acceptance of therapies where the evidence base was weak or the incremental cost-effectiveness ratio was unfavourable.The principles behind the activities of NICE attract wide support within the NHS, but the details of its decisions have often not been popular within NHS management who have to deliver them. Some of this relates more to the context and political environment within which NICE operates than to a failing within NICE itself. NICE will continue to become increasingly important in determining the use of new drugs within the UK NHS.