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Relations between Big Pharma and the UK government are under growing strain. Just last week, Eli Lilly CEO Dave Ricks labelled Britain as \u201cprobably the worst country in Europe\u201d for drug pricing. The remarks, made to the FT, followed a series of investment pullbacks by major pharmaceutical firms, who claim the UK remains an uncompetitive place to sell medicines.\u00a0<\/p>\n
Earlier this month, drugmaker AstraZeneca said it was pausing a planned \u00a3200 million expansion of its Cambridge research site, after axing a vaccine project in Liverpool this year. Also in September, Merck \u2014 known as MSD in Europe \u2014 said it was scrapping research operations in London to relocate the work to existing sites, primarily in the US. Following suit, Eli Lilly has placed its planned London Gateway Lab on hold. The firm said the project, part of a \u00a3279mn investment, has been paused while it \u201cawaits more clarity around the UK life sciences environment\u201d.<\/p>\n
\u201cWe have a long and proud history of researching and manufacturing medicines in this country,\u201d said Richard Torbett, CEO of ABPI, the trade body that represents large pharmaceutical firms in the UK. \u201cThis is why we urge the government \u2026 to improve how this country values and attracts future life sciences manufacturing,\u201d he continued.<\/p>\n
As a share of its overall health budget, the UK spends less than most developed nations on medicines. Over the last decade, the nation\u2019s spending on pharmaceuticals has fallen from 15% of the NHS budget to 9%, while the rest of the developed world contributes between 14% and 20% of their own health budgets. One reason for this disparity is that the NHS relies heavily on so-called generic drugs, non-branded copies created after patents expire, which keeps costs down.<\/p>\n
When setting prices, the government also refers to a body called NICE (the National Institute of Health and Care Excellence), which evaluates a product\u2019s clinical and cost effectiveness. Even if a medicine is more effective than alternatives, it may not be recommended for NHS use if it is too expensive \u2014 a factor pharma companies consider when pricing products.<\/p>\n
Another mechanism, the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), caps the growth of NHS expenditure on branded medicines. To prevent overspending, pharma companies pay back a portion of revenues to the NHS, although companies say the current rebate level is unsustainable.<\/p>\n
Pressure from overseas<\/p>\n
When unpacking the recent investment pullbacks, \u201cit\u2019s difficult to know the specific reasons for different companies\u201d, said Huseyin Naci, director of the Pharmaceutical Policy Lab at the London School of Economics.<\/p>\n
He nonetheless told Euronews that \u201cthe timing of the latest round of decisions seems to indicate that pressure from the Trump administration in the US\u2026is a very important factor in what’s happening.\u201d<\/p>\n
Naci spoke to Euronews before the US announced 100% tariffs on branded or patented drug imports last week. The levy, set to kick in on 1 October, will be valid unless the drugmaker is building a manufacturing plant in the US, meaning it’s set to mainly hit medium and smaller firms.<\/p>\n
Trump had, however, already threatened duties on medicines, as well as ordering companies to comply with his so-called \u201cmost favoured nation policy\u201d (MFN). This requires firms to peg their prices to the lowest charged in other rich countries, a policy that could have significant secondary effects in Europe. The US pays more for prescription drugs than any other country, often nearly three times as much as other developed nations. Accounting for half of global sales, the US market offers up roughly 70% of pharmaceutical profits.<\/p>\n
If firms fail to comply with MFN pricing, Trump has threatened: \u201cWe will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.\u201d<\/p>\n
Competing spending priorities<\/p>\n
In pricing negotiations with pharmaceutical firms, the UK government also needs to consider wider budgetary concerns, said Irene Papanicolas, director of the Center for Health System Sustainability at the Brown University School of Public Health.<\/p>\n
\u201cIt’s important in all of this rhetoric to think about pharma as a component of the health system,\u201d she said. \u201cIf the pharma budget grows, that means you have less money to spend elsewhere, and (resources) are already very constrained.\u201d<\/p>\n
Years of underfunding and growing demands on the NHS mean that the system is in urgent need of extra investment. While some pharma firms warn that treatment access will be restricted if the state doesn\u2019t increase drug prices, Papanicolas argued that the primary impact will be an economic one.<\/p>\n
\u201cIf pharma pulls out of manufacturing (in the UK), it doesn’t mean that they won’t launch their products in the UK,\u201d she said. \u201cThe bigger impact it has is on the economy and jobs.\u201d<\/p>\n
Beth Woods, senior research fellow at the University of York, also told Euronews that increasing drug prices isn\u2019t the most efficient use of the health budget \u2014 according to analysis from her and her colleagues.<\/p>\n
\u201cWe’re getting less value from our medicines expenditure than we are from other forms of NHS expenditure,\u201d she said. \u201cSo even when we take into account potential effects on innovation (when limiting prices), our research still supports more stringent price regulation in the UK.\u201d<\/p>\n
\u201cMore investment could fund all kinds of things,\u201d she added. \u201cScreening programmes, hip replacements, general staffing increases.\u201d<\/p>\n
Incentivising firms to stay in the UK<\/p>\n
While drugmakers stress that competitive pricing is a key means to keep investment in the UK, experts also stress that there are other tools at the government\u2019s disposal.<\/p>\n
\u201cPricing is not the way to incentivise companies to invest in a particular country,\u201d said Huseyin Naci. \u201cFactors responsible for attracting private investment … tend to be around the favourability of the country in terms of the tax incentives \u2026the strength of the public funding landscape, so government funding of early research, as well as the skilled workforce, infrastructure, public-private partnerships, and a strong academic sector.\u201d<\/p>\n
But, whether it is through drug pricing or other means, many would argue that the UK must do more to bolster its competitiveness, particularly as pressure mounts from across the Atlantic.<\/p>\n","protected":false},"excerpt":{"rendered":"ADVERTISEMENT Relations between Big Pharma and the UK government are under growing strain. Just last week, Eli Lilly…\n","protected":false},"author":2,"featured_media":96482,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[275],"tags":[57015,13513,61937,18,135,475,474,19,17,96,2900,393],"class_list":{"0":"post-96481","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-astrazeneca","9":"tag-drug-companies","10":"tag-drug-industry","11":"tag-eire","12":"tag-health","13":"tag-health-care","14":"tag-healthcare","15":"tag-ie","16":"tag-ireland","17":"tag-medicine","18":"tag-pharmaceuticals","19":"tag-united-kingdom"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/96481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=96481"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/96481\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/96482"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=96481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=96481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=96481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}