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The British government plans to increase NHS spending on medicines by 25 percent by making it easier to approve medicines in order to gain an exemption from import tariffs threatened by US President Donald Trump.
Ministers will promise on Monday to review NHS value for money rules in England in a bid to boost pharmaceutical investment and avoid a 100 per cent levy on branded drugs from Washington, government officials and industry figures said.
The measures are expected to include a 25 per cent increase in the health service’s medicines budget for branded medicines, following the first-ever increase to the threshold at which the NHS considers medicines to be value for money.
Under the zero-rate deal, which will initially last three years, NHS spending on medicines is expected to rise from around 9.5 per cent of the budget to 12 per cent.
The move will cost taxpayers around £3 billion once fully implemented, although British officials said the initial cost would be lower.
“We need to spend more money on medicine,” one official said. “Ultimately, this should save money overall.”
Since 1999, the National Institute for Health and Care Excellence has approved drugs that cost less than £20,000 to £30,000 for each year of quality life they provide – a measure known as ‘quality-adjusted life year’ (QALY).
The drug approval agency thresholds will rise to £25,000-£35,000, alongside other technical changes to assessment methods that will increase drug spending by 25 per cent.
But according to industry and government figures, drug makers have not been able to grow QALYs in line with inflation in the future. The pharmaceutical industry has argued that an inflation-related increase will raise the threshold to between £40,000 and £50,000 per year.
Ministers have been battling over funding for the changes for weeks, with Health Secretary Wes Streeting resisting pressure from Chancellor Rachel Reeves to take the money out of health budgets.
The talks between Britain and the US on a deal come after a string of drugmakers, including MSD and Eli Lilly, have cut or paused research and development investments in Britain in recent months, pushing drug prices lower than those of international competitors.
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, an industry figure said there was also likely to be an agreement on reducing the drug sales companies pay to the NHS.
The voluntary scheme for the pricing, access and growth of branded medicines, now charged at 23 percent, is higher than the 15 percent predicted by the government and pharmaceutical groups and has been the subject of bitter talk.
One official said the British government was “actively working with the industry to turn the tide [the] trend of disinvestment”.
Nice’s thresholds are based on the theory that higher drug costs could do more harm than good by diverting money from other areas that could be more cost-effective, such as medical staff or equipment.
Sam Roberts, chief executive of the independent body, last month warned against increasing the QALY in line with inflation due to budget constraints, saying there were “only so many taxpayer pounds”.
