The UK has agreed to pay 25% more for new medicines by 2035 as part of a US-UK drug pricing deal that could cost the NHS an estimated additional £3 billion a year, according to industry sources. The transatlantic agreement will see the health service in England double the percentage of GDP it allocates to innovative therapies from 0.3% to 0.6% over the next decade, up from the current £14.4 billion annual spend.
Ministers have been accused of caving in to US demands after pressure from Donald Trump. The Liberal Democrats branded the deal “a Trump shakedown of the NHS”. Helen Morgan, the party’s health spokesperson, said: “Trump demanded these pay rises to put Americans first and our government rolled over. Patients stuck on crammed hospital corridors or unable to get an ambulance won’t forget it.”
NHS leaders backed the government’s assessment that the “landmark” agreement will prove worthwhile by delivering groundbreaking new drugs to tens of thousands of patients. However, they warned that the NHS receives too little funding to absorb the costs involved. Daniel Elkeles, chief executive of NHS Providers, said: “It is not yet clear how it will be paid for. There is absolutely no slack in current published NHS spending plans for this major commitment.”
Dr Andrew Hill, an expert on the drugs industry at the University of Liverpool, said the deal would see the NHS paying more for the same treatments. “Wes Streeting, the health secretary, has agreed to give drug companies 25% more for the same drugs we were already buying. NHS funding is limited, so if we have to pay higher drug prices, this means less money for doctors, nurses, ambulances, and simple procedures which can save lives cheaply,” he said.
Ministers said the “milestone” deal would boost the UK pharmaceutical industry, which has recently paused or scrapped major investments in protest at the government’s approach to drug pricing. They also highlighted that £6.6 billion a year of UK-made drugs exported to the US will now escape, for at least three years, the 100% tariffs Trump had threatened. The deal will also see Nice increase the amount it is happy for the NHS to spend on life-extending drugs from £20,000–£30,000 per quality-adjusted life year to £25,000–£35,000, the first increase since 1999.
Whitehall sources disputed claims that ministers had rolled over to US pressure. An aide to Health Secretary Wes Streeting said: “Unlike when the Lib Dems rolled over to Andrew Lansley, we have protected the NHS. This will not be paid for out of budgets for NHS services.” Sources claimed the NHS received hundreds of millions in the spending review to cover early costs, but conceded that future costs would need to be settled in the next spending review.
