Responding to reports that the NHS will pay a higher price for branded new medicines, Nuffield Trust Senior Policy Analyst Sally Gainsbury said:
“Higher prices for new branded medicines would be bad news for anyone who wants to see the NHS get the most health benefit for patients out of its spending. A big increase in the price the NHS pays by raising the NICE threshold will not bring additional benefits for the population as a whole, it will just make healthcare more expensive.
“The NHS budget is already under intense pressure and so the reported £3 billion extra cost will need to be fully funded by the Treasury. However, even if it is not to come from day-to-day NHS budgets, that will not stop this being a deal that undermines the NHS’s ability to get the most health benefits for patients out of its resources.
“Billions of extra spending directed towards improving access to primary care or a faster reduction in waiting times would provide much greater benefits to the health of the population as a whole than an agreement to pay higher prices for new medicines which might offer hope for a few patients but come at the heavy price of treatments and care foregone for a larger number.
“While this deal may be welcome news to some in the life sciences industry, we need full transparency on the government’s evidence for how any benefits to the wider economy will actually be realised.”
Notes to editors
- Note on the reported £3 billion extra cost to the NHS resulting from the UK-US pharmaceuticals deal: This figure was reported by the Financial Times and was sourced from the Office for Budget Responsibility Economic and Fiscal Outlook, published in November 2025, which stated that the Spending Review assumed that there would be a 25% rise in spending on branded medicines between 2025/26 and 2028/29 at the cost of £3.3 billion, and that a 5% increase above that would cost a further £700 million. On December 18, following queries from the Nuffield Trust, the OBR issued a correction slip to their EFO (CP 1439 – Office for Budget Responsibility – Economic and fiscal outlook – November 2025), stating that the Spending Review had assumed a 20% increase in NHS spending on new branded medicines. The original estimate that each further 5% increase in spending would equate to an additional £700 million remained unchanged. As of December 19, the government has not produced an official estimate of the cost to the NHS drug bill stemming from the proposed changes, which consist of a 17 to 25% increase to NICE’s cost-effectiveness threshold, alongside an effective reduction in the level of rebates paid by industry when sale volumes exceed agreed levels. This note was updated on December 19 to reflect the OBR’s correction, but our broader comment remains unchanged.
- Read more about the problems at the heart of the government’s dispute with the pharmaceutical industry in our long read from October: https://www.nuffieldtrust.org.uk/news-item/the-tough-choices-at-the-heart-of-the-government-s-dispute-with-big-pharma
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