UK drug price rises seen as necessary to sustain pharmaceutical investment, ministers say

LONDON — The price the NHS pays for medicines may need to rise to prevent a wave of pharmaceutical investment leaving the United Kingdom, science minister Patrick Vallance said at Moderna's new vaccine centre in Oxfordshire.

"Price increases are going to be a necessary part of solving that problem," Vallance told the BBC. He added that where the additional money would come from to pay higher prices is a matter for the Department of Health and the Treasury to figure out. Vallance spoke at the opening of Moderna's facility, where millions of flu and Covid-19 vaccines will be manufactured as part of a broader investment in UK research and production capacity. Health Secretary Wes Streeting, who cut the ribbon, said there was "a live conversation between government departments and the pharma industry" on drug pricing.

Moderna is investing more than £1 billion in the UK through a 10-year partnership meant to accelerate research and development, create jobs, and bolster pandemic resilience. The commitment stands in contrast to recent moves by other major firms: Merck this month scrapped a £1 billion project in Liverpool, and AstraZeneca paused a £200 million investment in Cambridge. In a separate note, Novartis said NHS patients would lose access to some cutting-edge treatments due to rising costs and said it did not plan major new UK investments in manufacturing, research, or advanced technology because of systemic barriers. Eli Lilly, meanwhile, told the Financial Times that the UK is "probably the worst country in Europe" for drug prices.

Over the last decade, UK spending on medicines fell from about 15% of the NHS budget to roughly 9%, a shift that comes as peers in the developed world spend between 14% and 20% of their healthcare budgets on medicines. The backdrop includes pressure from the United States on prices, with President Donald Trump urging lower prices and greater US investment in pharma. Last month, talks between Streeting and pharmaceutical firms over drug costs broke down, and the government said it had tabled a "generous and unprecedented offer to accelerate growth" in the sector. Streeting has described the dynamic as a balancing act between patient access and industry investment, and has signaled a more conciliatory stance, saying the talks are ongoing in both domestic and international forums, including with the United States.

The government described Moderna's UK program as a signal of the potential for growth in the sector, while street-level questions about pricing and access remain. Vallance stressed that any resolution would require collaboration across departments and the industry, adding that the economy and patients alike would benefit from a deal that sustains innovation without compromising access. Streeting emphasized that the conversation is not limited to domestic policy but includes international considerations as well as bilateral relations with the US, underscoring the intertwined goals of growth, health outcomes, and trade.