NHS may have to pay more for medicines to curb drugmakers' UK retreat, Vallance says

The NHS will need to pay more for medicines to stop drugmakers pulling investment from Britain, science minister Lord Patrick Vallance has admitted. Big pharmaceutical companies have ditched or paused nearly £2 billion in planned UK investments so far this year, including Merck scrapping plans for a £1 billion London research centre and AstraZeneca pausing a £200 million investment in Cambridge. AstraZeneca previously ditched a £450 million vaccine plant expansion in Liverpool, while Eli Lilly has paused plans for a London lab, part of a £279 million investment. Dave Ricks, Lilly’s chief executive, said the UK is “probably the worst country in Europe” for drug prices amid a row between the industry and Government. He warned the stance was halting investment and could see Britain miss out on the rollout of new medicines.

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Lord Vallance, the Labour peer who previously worked for GSK, admitted that “price increases are going to be a necessary part” of resolving the row. He also said that Donald Trump was a “big factor” as the U.S. president pressures pharmaceutical companies to lower prices and invest more in the United States. The science minister said price increases are part of the solution to ensure innovation and patient access, adding that “a lot of” companies’ profits come from the U.S. and the UK accounts for roughly 2 percent or less of global corporate profits. When asked if that means prices in the UK will rise if they fall in the U.S., Vallance replied that it is not necessarily the equation, but that President Trump has called for greater parity on pricing.

Vallance said the likelihood of striking a deal with drugmakers is high: “inevitable – we must end up with a deal of some sort and we have to.” He argued such an agreement would benefit patients and the economy while ensuring rapid access to top medicines in a fair and equitable way across the country. Eli Lilly last month announced the UK price rise for its weight-loss drug Mounjaro by about 170 percent, aligning prices more closely with other European markets amid political pressure from Washington. The NHS is not set to pay the higher price in order to maintain access for obesity and type 2 diabetes treatments through the health service.

Health Secretary Wes Streeting said there was a live conversation between government departments and the pharma industry on drug pricing. Britain pays less for drugs than many developed countries due to a strict pricing regime, and the government faces pressure to reconsider a rebate scheme that requires companies to contribute a portion of their UK drug revenue to the NHS. Streeting, who attended the opening of a new £150 million Moderna vaccine facility in Oxfordshire on Wednesday, told the BBC there was ongoing engagement with the industry. In an interview on BBC Radio 4’s Today programme, Vallance repeated that discussions with industry and the United States are ongoing to reach a “right” arrangement for innovation, investment, and patient access, and that price changes will be part of the solution.

The Trump factor remains a central element of the debate, Vallance said, describing it as a large driver of the prospective need to increase prices in the UK. He argued that the U.S. market’s higher prices influence global profits and that the UK’s share is relatively small. Asked about a deal with manufacturers, he said discussions are productive and that a resolution is essential for ensuring patients in the NHS get rapid access to the best medicines on fair terms. Lilly’s price adjustments, and broader industry moves, underscore the complexity of aligning UK drug pricing with both innovation and public access. The government has not yet indicated the funding mechanism for any potential price increases, noting that the question of “where the extra money comes from” lies with the Health Secretary and the Chancellor, Rachel Reeves.