Britain is about to agree to pay 25% more for drugs after Donald Trump threatened sanctions and Big Pharma threatened to pull out of the UK
Patients will be harmed by NHS delays if Donald Trump forces Britain to pay more for medicines, leading experts have warned.
Fears are growing that a reported move to pay 25% more for drugs will leave a black hole in the NHS budget and mean patients wait longer to be treated. The President has threatened to impose huge tariffs on drug imports, including from UK firms, if the NHS did not pay higher prices and Britain is “in advanced talks” with US officials to avert them.
The collective bargaining power of the NHS means it has historically been able to negotiate much cheaper prices than private hospitals in the US.
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Now the UK government has reportedly drawn up proposals to increase the NHS “value for money” threshold by 25% – which would mean the NHS spending billions of pounds more on vital drugs.
It comes after a number of pharmaceutical giants threatened to withdraw investment from Britain – in light of Trump’s threats – if the UK government did not agree to pay more.
Politico reports that London has presented the proposal to the Trump administration but it is not known whether it has been accepted.
Ed Wilson, professor of health economics at Exeter University, said: “When we say yes to a new drug, we have to stop doing something else to pay for it, so other patients lose out.
“This typically appears in the form of delays or deferment to their own treatments. We call this the ‘opportunity cost’ – in this way ‘cost’ is someone else’s health.
“Any attempts to increase it across the board will lead to greater losses to NHS patients. All choices involve trade-offs.
“If the UK wishes to pay more for drugs to support the life-sciences industry, then it has to be clear and honest as to the cost of this to NHS patients – somewhat ironic given the objective of the industry should be to improve the lives of patients.”
Dr Dan Howdon, associate professor in health economics at Leeds University, said: “It is important to be clear that the pressures in favour of an increase to the threshold are not motivated by a concern for the health of the nation as a whole.”
AstraZeneca, Lilly and Merck have paused more than £1.3 billion of investment into Britain in the last year.
Merck’s scrapped a £900 million research and development centre it had started building in Britain. AstraZeneca then paused a £170 million investment in its Cambridge research site, which followed a January cancellation of a planned new £390 million vaccine production centre in Speke, Liverpool.
Eli Lilly now says it is waiting to finalize its investment in a Lilly Gateway Labs site in Britain as it sought “more clarity around the U.K. life sciences environment.”
An industry figure with knowledge of the proposal told Politico: “We have kicked up enough of a stink and they have given in. This is the price you have to pay post-Trump for global pharma to continue to play in the UK”
Advocacy groups including Global Justice Now have written to the UK’s Competition and Markets Authority accusing the companies of acting like a “cartel” – claims they denied.
A Government spokesperson admitted the UK is “in advanced discussions with the US administration” over a deal, adding: “The pharmaceutical sector and the innovative medicines it produces are critical to our NHS, our economy and the Plan for Change.
“Through our Life Sciences Sector Plan, we’ve committed to working with industry to accelerate growth in spending on innovative medicines compared to the previous decade.”
The National Institute for Health and Care Excellence (NICE) assesses medicines based clinical effectiveness, cost effectiveness and the overall cost to the NHS. This is done using an assessment called quality-adjusted life years (QALYs), which combines both the length of life gained from a treatment and its impact on quality of life, represented as a number.
Currently Nice considers medicines costing between £20,000 and £30,000 per additional QALY gained to represent good value for money for the NHS.
Increasing the threshold would make it easier for NHS patients to access more expensive drugs, but it would also mean that the health service pays more for medicines overall. The core element of the plan includes raising the NICE threshold by 25%.
Prof Wilson explained: “Let’s say we currently get one year of good-quality life for every £20,000 spent, and we say yes to a treatment costing £40,000 per year of good-quality life. To pay for this we have to reallocate resources away from other patients’ care.
“For every £40,000 we spend we get one year of good-quality life, but for every £40,000 we take away from those other patients we lose two years of good-quality life, a net loss of one year of good-quality life. So saying ‘yes’ to the new treatment has harmed the net health of patients.”
Dr Howdon added: “It is important to be clear that any proposed increase to the threshold cannot be backed by the weight of existing research in this area, if the aim of healthcare spending is to improve population health.
“This research strongly suggests that the cost-effectiveness threshold is already set too high, and the effect of accepting new treatments at this rate is to reduce population health.
“Any move to increase the threshold would be motivated by twin pressures that are geopolitical and from the pharmaceutical industry.”
President Trump says prices being paid in the US are subsidising drug development from which the rest of the world benefits. He has threatened to slap tariffs of up to 100% on pharmaceutical imports if countries like the UK do not pay more for drugs.
The UK government spokesperson continued: “We’ve secured a landmark economic partnership with the US that includes working together on pharmaceutical exports from the UK whilst improving conditions for pharmaceutical companies here. We’re now in advanced discussions with the US administration to secure the best outcome for the UK, reflecting our strong relationship and the opportunities from close partnership with our pharmaceutical industry.”
A NICE spokesperson said: “In a health system such as ours funded by general taxation, it is for the Government to decide how much to spend on health in the context of other spending priorities within the health system and beyond. In that context NICE is aware of on-going discussions in Government over the level of medicine spend.”
