{"id":777408,"date":"2026-09-21T03:06:13","date_gmt":"2026-09-21T03:06:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/777408\/"},"modified":"2026-09-21T03:06:13","modified_gmt":"2026-09-21T03:06:13","slug":"u-s-u-k-deal-to-raise-drug-prices-in-britain-faces-major-challenges","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/777408\/","title":{"rendered":"U.S.-U.K. Deal To Raise Drug Prices In Britain Faces Major Challenges"},"content":{"rendered":"

The United Kingdom is the only European country that has agreed to a sovereign, country-wide trade deal with the United States to raise its drug prices in exchange for a 0% tariff rate<\/a>. But this agreement faces major challenges in execution, including insufficient budgets to accommodate the higher prices.<\/p>\n

It seems that since “Liberation Day” in April 2025 when President Trump first announced sweeping tariffs on imports from nations across the globe, the purpose of the threats was to get something in return: A purportedly better deal than what was negotiated by previous administrations, for instance, but also onshoring of manufacturing by multinational companies.<\/p>\n

In the case of pharmaceuticals, the transactional package deals offered in exchange for removing the tariff threats connect to the Trump administration’s most-favored nation pricing policies<\/a>. Here, the goal is to raise the prices of pharmaceuticals among comparable wealthy nations to better align them with the U.S. In this context, the administration seeks to resolve a possible free-riding problem in which a considerable amount of R&D is expended in the U.S on drug development while insurers and patients pay the highest prices. According to this viewpoint, the U.S. is subsidizing foreign countries.<\/p>\n

For the U.K., the deal the Labour Government struck reduced the tariff rate to 0% in exchange for raising the cost-effectiveness threshold along with introducing a broader method for establishing the quality-of-life metric that better accounts for disease severity. This in turn could lead to a small increase in the number of pharmaceuticals being approved for reimbursement at higher prices.<\/p>\n

There’s been a sharp decline<\/a> in foreign direct investment in the British life sciences sector in recent years, as it fell by 58% from \u00a31.9 billion in 2021 to \u00a3795 million in 2023. According to FirstWord Pharma, to “stem the outflow of investment and to appease President Trump” the British government decided <\/a>to agree to raise the level of a cost-effectiveness threshold used as a benchmark to determine whether a healthcare intervention provides value for money for the National Health Service.<\/p>\n

The National Institute for Clinical Health and Care Excellence evaluates prescription drugs and other medical technologies and services based on clinical- and cost-effectiveness as well as the overall cost to the NHS. To do this, the agency makes use of a measurement of clinical benefit called the quality-adjusted life year, which combines length of life gained from a treatment and its impact on patients’ quality of life. Until very recently, NICE considered medications costing between \u00a320,000-30,000\/QALY as providing good value for money for the NHS. This cost-effectiveness threshold had been in place since NICE was founded in 1999.<\/p>\n

Though it technically refers to the maximum amount that the NHS is willing to pay for an additional unit of health benefit \u2014 typically measured in terms of QALYs \u2014 it is not a rigid cutoff. Rather, it’s a guide which can be adapted case by case. Despite exceeding \u00a330,000 per QALY, some medical technologies have still gotten positive NICE recommendations. And in therapeutic categories such as cancer, the threshold has de factor been drifting upwards<\/a> for quite some time.<\/p>\n

Nonetheless, the threshold is viewed as a key signal to the life sciences sector <\/a>that can shape investment, pharmaceutical pricing and even which clinical trials are carried out in the United Kingdom. Politico reported<\/a> that a 25% increase to \u00a325,000-37,500\/QALY was part of the U.S.-U.K. deal. This went into effect in April.<\/p>\n

NICE estimates the new threshold will allow 3\u20135 more medicines or indications to be recommended for NHS reimbursement each year.<\/p>\n

There’s emerging evidence that the U.S.-U.K. drug pricing agreement is opening up access. NICE recently recommended Enhertu (trastuzumab deruxtecan) for adults with HER2-low advanced or metastatic breast cancer whose disease has progressed following treatment. NICE had previously rejected the medicine for this indication two years ago because it was not considered cost-effective.<\/p>\n

The Association of the British Pharmaceutical Industry has long sought a greater change<\/a> in the level of the threshold. ABPI wants a considerably larger increase than the government appears to be willing to adopt, namely to \u00a340,000-50,000\/QALY and then index-linked to inflation thereafter. But the trade group recognizes that additional funding would be required to support this.<\/p>\n

Advocates for a threshold increase say that this should boost uptake of new medicines in Britain. But raising the threshold without a concomitant increase in pharmaceutical budgets would preclude this. In fact, it could leave a “black hole” in the NHS<\/a> budget. As a result, some patients may have to wait even longer to be treated. Consider what happens when the threshold is increased without a corresponding budgetary expansion. While this may allow patients to access an expensive new drug, somewhere else in the system cuts would have to be made. In other words, this could harm other patients’ health.<\/p>\n

The NHS hasn’t properly budgeted for the increase in spending needed to allow for reimbursement of more pharmaceuticals and keep funding levels for other services and technologies the same. Without these monies at its disposal, perhaps it will cut funding of certain healthcare services and technologies. But it’s not known which. Furthermore, it could very well be that without additional budget the price increases are too much for the NHS Trusts to absorb at the local level.<\/p>\n

And so, critics of the deal say it will have considerable opportunity costs<\/a> in that resources won’t be allocated as efficiently. One study published in the British Medical Journal estimates this could result in over 200,000 excess deaths by 2036.<\/p>\n

This article was originally published on Forbes.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The United Kingdom is the only European country that has agreed to a sovereign, country-wide trade deal with…\n","protected":false},"author":2,"featured_media":777409,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[102399,141,105211,59,57,58,12695,50,256257,25025,186,61883,25502,1708,47625,56,54,55],"class_list":["post-777408","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-cost-effectiveness","tag-donald-trump","tag-drug-prices","tag-gb","tag-great-britain","tag-greatbritain","tag-increase","tag-news","tag-pharmaceutical-giant-pfizer","tag-prescription-drugs","tag-prices","tag-reimbursement","tag-tariff-rate","tag-the-united-kingdom","tag-threshold","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/777408","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=777408"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/777408\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/777409"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=777408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=777408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=777408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}