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The UK government is set to increase NHS spending on medicines by 25 per cent by making drug approvals easier in order to secure a carve-out from import tariffs threatened by US President Donald Trump.
Ministers will on Monday promise to overhaul NHS value-for-money rules in England in a push to boost pharmaceutical investment and avoid a 100 per cent levy on branded medicines from Washington, government officials and industry figures said.
The measures are expected to include a 25 per cent rise in the health service’s medicines budget for branded medicines on the back of the first-ever increase to the threshold at which the NHS deems medicines value for money.
Under the zero-tariff deal, which will initially last three years, NHS spending on medicines is forecast to rise from about 9.5 per cent of its budget to 12 per cent.
The move will cost taxpayers about £3bn once fully implemented, although UK officials said the initial cost would be lower.
“We need to spend more money on medicines,” one official said. “Ultimately this should save money overall.”
The National Institute for Health and Care Excellence has since 1999 approved medicines that cost less than between £20,000 and £30,000 for each year of good-quality life they provide — a metric known as “quality-adjusted life year” (QALY).
The drug approval body’s thresholds will rise to £25,000-£35,000 alongside other technical changes to assessment methods that will increase medicines spending by 25 per cent.
But industry and government figures said drugmakers had failed in an attempt to ensure the QALY rises in line with inflation in future. The pharmaceutical industry has argued that an inflation-linked increase will take the threshold to between £40,000 and £50,000 a year.
Ministers have been battling for weeks over how to fund the changes, with health secretary Wes Streeting resisting pressure from chancellor Rachel Reeves for the money to come from health service budgets.
The UK-US talks over a deal come after a string of drugmakers including MSD and Eli Lilly have scrapped or paused investments in research and development in the UK in recent months, hitting out at lower drug prices compared with international peers.
Meanwhile, the Trump administration has railed against European countries “freeloading” on American innovation while the US pays much higher drug prices.
As part of the announcement expected on Monday, one industry figure said there was also likely to be an agreement on reducing the medicine sales that companies pay to the NHS.
The voluntary scheme for branded medicines pricing, access and growth, now levied at 23 per cent, is higher than the 15 per cent forecast by the government and pharmaceutical groups and has been the subject of acrimonious talks.
One official said the UK government was “working actively with the industry to reverse [the] trend of disinvestment”.
Nice’s thresholds are based on the theory that higher drugs costs could do more harm than good by diverting funds from other areas that could be more cost-effective, such as medical staff or equipment.
Sam Roberts, chief executive of the arm’s-length body, warned last month against raising QALY in line with inflation because of budgetary constraints, saying there were “only so many taxpayer pounds”.
