Ministers are locked in a battle over the funding of price rises for NHS medicines under a trade deal with Donald Trump.
Keir Starmer’s government is in “advanced discussions” with Washington over a plan to increase the amount the NHS pays pharmaceutical firms for the drugs in return for avoiding tariffs imposed by Trump on the sector.
The proposals would see the limit at which a drug is deemed to be cost effective for the NHS raised, from its current range of between £20,000 to £30,000 for every additional year of good quality of life they provide, to as high as £50,000 per year of quality life.
The move would mean the National Institute for Clinical Excellence (Nice), which approves the use of medicines in the NHS, giving the green light for more drugs for seriously ill patients, while more money would go would go into the pharmaceutical industry.
But there is a Whitehall battle over how the cost, which would be billions annually, would be funded.
Reeves insisting no new money
It is understood that Chancellor Rachel Reeves has insisted that there is no new money for the plans, while Health Secretary Wes Streeting has called for the Treasury or Department for Business to fund a deal which boosts the UK pharmaceutical industry and economy.
If the extra expenditure does have to come out of the NHS budget, then cuts would likely have to be made elsewhere in the service, the Lib Dems warned.
But it would be welcomed by some health campaigners. Claire Rowney, chief executive at Breast Cancer Now, said: “This could be a game-changer that sees more people getting access to vital life-extending treatments.
“For too long cost-effectiveness thresholds have jeopardised the approval of some groundbreaking new medicines.”
Officials said the government was awaiting the full details of the latest US tariffs and their impact on UK businesses.
The Liberal Democrats urged ministers to “come clean” with parliament and the public about how much the US pharma deal would cost British taxpayers.
Lib Dem health spokesperson Helen Morgan said: “It beggars belief that the Government is bending to a bullying US president having told patients for years that life-saving new drugs are unaffordable.
“Ministers must come clean about how much this move will cost and whether it will be funded by cuts elsewhere in the NHS. They should also lay their plans before Parliament without delay so they can be properly scrutinised.”
Drug companies have shelved UK investment
Nice deems a medicine to be cost effective for the NHS by assessing its “quality adjusted life years” (QALYs), combining the length of life a person gains from the treatment and its impact on their quality of life.
Any medicines that cost less than £20,000 to £30,000 for each QALY is currently approved by the regulator.
Last month Lord Vallance, the science minister, told Parliament that more money needed to be spent on NHS drugs in order to save the UK pharmaceutical industry.
A number of major drugs firms have shelved or paused planned UK pharmaceutical industry investments this year, and industry bosses recently told MPs a “difficult” environment and pressure on pricing had made Britain a less attractive investment environment than other countries such as the US.
President Donald Trump and Prime Minister Keir Starmer have been working on a trade deal (Photo by Leon Neal/Getty Images)The government insisted that the UK was, according to a Deloitte survey earlier this year, the most attractive place to invest in the world, jointly with India.
Drug prices in the US are higher than anywhere else in the world and the US president has demanded more parity with other countries, threatening to impose tariffs of up to 100 per cent on pharmaceutical imports.
A Nice spokesperson said: “In a health system such as ours funded by general taxation, it is for the Government to decide how much to spend on health in the context of other spending priorities within the health system and beyond.
“In that context Nice is aware of on-going discussions in Government over the level of medicine spend.”
Increasing spending ‘wouldn’t help health’
But experts warned that the cost-effectiveness threshold was already set too high.
Dr Dan Howdon, associate professor in health economics at the University of Leeds, said: “I am not aware of any research, taking improving the health of the nation as the goal of healthcare spending, that suggests it is too low. Any move to increase the threshold would be motivated by twin pressures that are geopolitical and from the pharmaceutical industry.”
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The Prime Minister’s official spokesman said: “The pharmaceutical sector and the innovative medicines it produces are critical to the NHS and our economy.
“We’ve secured a landmark economic partnership with the United States that includes us working together on pharmaceutical exports from the UK, whilst also improving conditions for pharmaceutical companies here.
“We’re now in advanced discussions with the United States to ensure that the NHS and its patients have continued access to the Innovative life saving drugs that they need.”
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