Health secretary Wes Streeting has drawn praise for his combative approach in negotiations with pharmaceutical companies over the price of prescription medicines, but experts warn the standoff cannot last indefinitely. After walking away from talks with the Association of the British Pharmaceutical Industry (ABPI) on Friday, Streeting accused the industry of being 'shortsighted' and rejecting a 'serious and generous' offer. He insisted the government would not allow British patients and taxpayers to be 'ripped off'.
However, the government ultimately needs a deal to support its ambition of making the UK a life sciences 'superpower'. The negotiations are complicated by the 'Trump factor' – US President Donald Trump's demand that global pharma companies reduce US drug prices to European levels has put the UK under scrutiny. Companies fear the UK, which represents just 2.5% of the global market, could be used as a price reference for the more lucrative US market.
Relations between the UK and the pharma industry have been deteriorating for about a decade. Companies complain that the voluntary price scheme has led to increasing clawback payments to the NHS, reaching 23% last year, compared with single-digit levels in comparable European schemes. They also criticise the National Institute for Health and Care Excellence (Nice) for applying 'value for money' criteria unchanged since 2001, resulting in the UK spending only 9% of its healthcare budget on prescription medicines, versus 17% in Germany and Italy and 15% in France.
Streeting's offer included a net increase in spending on medicines of about £1bn over three years, with billions more promised over the next decade. The industry, however, points to projected clawback payments of £13.5bn over the same period and notes that the promise to raise UK spending from 0.3% to 0.6% of GDP is not a solid commitment. If no new deal is reached, the current voluntary agreement could run until 2028, which would be a blow to the government's life sciences strategy.
