Science minister Lord Patrick Vallance has warned that the NHS will likely have to pay more for medicines to ensure the UK remains an attractive place for pharmaceutical investment. The former chief scientific adviser, who became a familiar face on TV during Government Covid briefings, said talks were going on to resolve a row with drugmakers. So what’s the row about and why should the NHS pay more?
Pharmaceutical leaders have warned that the UK is becoming a less attractive destination to launch clinical trials due to low spending on medicines. US-based firm Merck recently announced its UK operation would scrap plans for a £1billion site in London’s Kings Cross. AstraZeneca has also paused plans to invest £200million at a Cambridge research site.
The National Institute for Health and Care Excellence (NICE) assesses new medicines and decides whether they are cost-effective for NHS use. It typically considers medicines costing up to £30,000 per year of good health gained to be effective. But pharma bosses have suggested the thresholds have not changed since 1999.
This means the UK pays less for some medicines that comparable countries like the US and Germany. Drugmakers say this makes them less likely to invest in development and innovation here, where the NHS may not roll out their drugs to patients.
Companies are also unhappy about the clawback tax, which sees them pay a percentage of their income on sales to the NHS back to the taxpayer. Ministers have undertaken a review of the tax in recent months, after it rose unexpectedly to 23% this year — far more than the 15% predicted.
Discussions between Health Secretary Wes Streeting and the pharmaceutical sector broke down after they failed to agree changes to the scheme.
Lord Patrick told the BBC’s Today programme: “There’s absolutely, day by day discussions going on, including with industry, including with the US, to try to come to a solution here that’s right for innovation, right for getting companies into the UK, and right for patients in the NHS.
“I’ve got no doubt we’ll come to some arrangement which gets to the right position on this, because we have to — I think price increases are going to be a necessary part of what we need to do to get to a solution which will benefit patients.”
Asked if the UK may have to reassess how the NHS decides if medicines are good value for money, Lord Vallance told the Financial Times: “We’re looking right away across all of the options, with an aim to ensure that patients get the best medicines quickly.”
He also said the “Trump factor” was a large driver in the prospective need to increase the prices the UK pays for medicines. The US president has said he wants greater parity on pricing between nations.
“A lot of” companies’ profits come from the US and “the UK is something like 2% or less of the profit of companies globally”, Lord Vallance added.
Pressed on the likelihood of a deal being struck, the minister said: “I think it’s inevitable. We must end up with a deal of some sort and we have to, because it’s in the interest of the economy, it’s in the interest of patients, and we need to get that right to make sure that patients here get rapid access to the best medicines, and to do that in a way that’s fair and equitable across the country.”
