NHS May Pay 25% More for Medicines Amid US Drug Talks

Published: 09 October 2025. The English Chronicle Desk. The English Chronicle Online.

The UK government is preparing to increase the amount the NHS pays for medicines by up to 25% following weeks of intensive negotiations with pharmaceutical companies and the Donald Trump administration. The move aims to resolve a prolonged standoff over drug pricing, which has been cited as a factor in recent investment pauses by major pharma firms, including MSD (Merck in the US) and AstraZeneca.

Labour has reportedly drawn up proposals to revise the cost-effectiveness thresholds used by the National Institute for Health and Care Excellence (NICE) to assess new medicines. Currently, NICE considers treatments costing between £20,000 and £30,000 per additional year of good-quality life as good value for the NHS. Raising this threshold by 25%—unchanged since 1999—would allow more innovative and preventive treatments to be adopted.

The Association of the British Pharmaceutical Industry (ABPI) has urged urgent reform, suggesting the NICE threshold should be increased to £40,000–£50,000 and linked to inflation. Such changes would eventually require a greater share of NHS funding to be allocated to medicines.

The Department of Health and Social Care, in talks with the Treasury and Downing Street, is weighing how to finance the plan without cutting other NHS services. Health Secretary Wes Streeting proposed a deal over the summer that would save the pharmaceutical industry £1bn over three years, but the industry has argued it is set to repay £13.5bn over the same period and has requested approximately £2.5bn extra annually.

Government sources indicated that ministers are willing to spend more on medicines as treatments become increasingly innovative and preventive, citing examples such as weight-loss injections projected to save billions in obesity-related healthcare and trials for cancer-preventing vaccines.

Patient advocacy groups have voiced concerns. Just Treatment described the potential changes as “deeply troubling news for patients and the NHS,” warning that the UK risks importing the high me prices experienced in the US. Meanwhile, the NHS spent £20.6bn on medicines and medical devices in 2023-24, up from £19.2bn the previous year.

The row has also been influenced by US pressure, with Trump accusing other countries of “freeloading” on American medicine prices and threatening tariffs on pharmaceutical imports. In response, companies such as Pfizer and AstraZeneca have reduced prices in the US and started selling directly to patients to bypass intermediaries. Pfizer secured a three-year reprieve from tariffs in exchange for price cuts of up to 85%, setting a precedent for the sector.

Labour adviser Varun Chandra recently travelled to Washington, DC to negotiate with US officials and drug companies, aiming to secure an agreement that benefits the UK. A government spokesperson described the talks as part of a “landmark economic partnership” with the US, designed to support pharmaceutical exports and improve conditions for companies operating in the UK.

Opposition voices, including Liberal Democrat spokesperson Helen Morgan, criticised the government for appearing to prioritise US pressures over NHS affordability. She called on ministers to clarify costs and funding plans in Parliament, questioning the impact on patients and NHS resources.

The dispute has already had tangible consequences. Since the breakdown of the voluntary pricing scheme in late August, MSD has shelved plans for a £1bn research centre in London, while AstraZeneca and Eli Lilly have paused projects, putting nearly £2bn in UK pharma investment on hold this year alone.

The proposed increase in NHS medicine payments represents a high-stakes attempt to balance innovation, patient access, and international investment pressures, highlighting the complex interplay between domestic healthcare priorities and global pharmaceutical negotiations.