LONDON — The U.K. government has drawn up proposals to increase the amount the National Health Service pays pharmaceutical firms for drugs, in a bid to steer U.S. President Donald Trump away from his threatened tariffs on the sector.
Officials briefed the Trump administration on fresh proposals to adjust how the NHS prices medicines earlier this week, two industry figures told POLITICO. The core element of the plan includes raising the National Institute for Health and Care Excellence (NICE) threshold by 25 percent.
The NICE threshold measures whether a treatment offers good value for money. Under the current rules, if a drug costs the NHS between £20,000 and £30,000 for every extra year of good-quality life it delivers to a patient, it is considered good value.
Increasing the threshold would make it easier for pricier drugs to reach patients, but would mean the NHS will pay more overall for medicines.
The government is expected to brief U.K. pharmaceutical companies on the details later this week, the same two figures cited above said.
One of the figures said the government had long been resistant to changing the NICE threshold due to the cost to the Treasury for no direct extra benefit, but “we have kicked up enough of a stink and they have given in. This is the price you have to pay post-Trump for global pharma to continue to play in the U.K.”
Trump has threatened to impose tariffs of up to 100 percent on pharmaceutical imports. The trade pact Britain and the U.S. signed in May left the door open to “preferential treatment” on tariffs — but only if the U.K. improved conditions for American pharma companies operating in Britain.
A U.K. government spokesperson said: “The pharmaceutical sector and the innovative medicines it produces are critical to our NHS, our economy and the Plan for Change. Through our Life Sciences Sector Plan, we’ve committed to working with industry to accelerate growth in spending on innovative medicines compared to the previous decade.”
The spokesperson added: “We’ve secured a landmark economic partnership with the US that includes working together on pharmaceutical exports from the UK whilst improving conditions for pharmaceutical companies here. We’re now in advanced discussions with the US Administration to secure the best outcome for the UK, reflecting our strong relationship and the opportunities from close partnership with our pharmaceutical industry.”
‘Hard negotiators’
NICE, a regulatory body within the NHS, measures the cost-effectiveness of new drugs by weighing their impact on patients’ life against its price. If a drug’s benefits don’t justify its cost, the NHS does not recommend it for use, forcing pharmaceuticals to negotiate price cuts until the drug is deemed cost-effective.
Although London has presented its proposal to Washington, it remains unclear how it’s been received across the Atlantic.
Pharmaceutical companies have long been locked in talks with the government over NHS drug spending amid fears that more investment could flee Britain. Science Minister Vallance previously hinted the NHS would need to pay more if Britain wanted to stay attractive for investment, warning that Trump’s tariffs would make things worse if London doesn’t make “offers in this direction.”
But divisions persist inside government. Business and Trade Secretary Peter Kyle has indicated pharma companies are proving “hard negotiators” amid crunch talks tied to Trump’s deadline, saying they “know how to use the media and the press.”
Starmer’s chief business adviser Varun Chandra flew to Washington earlier this month to try to head off Trump’s threatened tariffs, which were put on hold until the administration negotiates agreements with pharma giants.
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