UK-US deal is good news for NHS patients and will help to support UK life sciences competitiveness, says ABPI

Industry hopes the new trade agreement will allow more innovative medicines to reach a greater number of NHS patients and will be a positive step in supporting the UK life sciences industry, which has struggled to compete for investment and research in recent years.

The agreement between the UK and the US will ensure that UK pharmaceutical exports to the US continue to face 0% tariffs for three years. The UK exported £6.6 billion worth of medicinal and pharmaceutical products to the United States in 2024.

A key plank of the deal will be an increase to the baseline threshold used by NICE to assess if medicines can be used by the NHS. The prices of existing medicines used by the NHS will not be affected, but in the future, new medicines will be assessed under revised cost-effectiveness thresholds.

The government will ask NICE to increase its baseline threshold from £20,000-£30,000 to £25,000-£35,000, giving NICE the opportunity to approve more new medicines and allowing a greater number of patients to benefit from those medicines. This increase to the threshold, up 25% at the lower end, and 17% at the upper end.

NICE's baseline cost-effectiveness threshold has not been increased for over 20 years. If NICE baseline cost-effectiveness threshold had been adjusted for inflation since 1999, the UK's average threshold would be £49,300, almost double its current value.

The international average for similar countries to the UK that use either explicit or implicit thresholds is around £33,400, meaning the agreed change brings the UK closer to the average, although it will remain in the lower half of the table.

The deal commits the UK to addressing the country's past decade of underinvestment in medicines, which has seen the proportion of health spending on medicines fall from around 14% to 9%. Over the next 10 years, the country will increase investment in new medicines from around 0.3% of GDP to 0.6% of GDP, with key target milestones along the way.

To ensure this is delivered, the UK will reduce the level of repayments on NHS sales required from companies under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG), which currently requires companies to repay 23.5% of their NHS sales revenues.

The repayment rate for newer medicines in the VPAG scheme will be capped so that it will not exceed 15% for the next three years 2026-2028, with adjustments made to ensure companies do not need to self-fund the changes to the NICE threshold. Critically, the deal calls for rapid talks between the ABPI and the UK government to design and agree a new, more sustainable scheme model from 2029 onwards.

Richard Torbett, Chief Executive of the ABPI, said: “The deal is an important step towards ensuring patients can access innovative medicines needed to improve wider NHS health outcomes. It should also put the UK in a stronger position to attract and retain global life science investment and advanced medicinal research.

“These commitments begin to address industry concerns on NHS access to medicines, and the UK’s record-high and unpredictable payment rate. There remain a great many details to work out and further technical improvements to make, but with this strong and positive progress, I look forward to working with the government to ensure this plan delivers for the NHS, Patients and UK industry.”

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