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Scientists comment on a Government announcement on a UK-US pharmaceuticals deal and changes to NICE’s cost-effectiveness thresholds.
Francis Ruiz, Senior Policy Advisor at the London School of Hygiene & Tropical Medicine (LSHTM), said:
“The big question is where will the extra money come from? If the Government is committing extra funding to increase the pharmaceutical spend from 0.3 to 0.6% GDP this could be a good deal for the UK. But if this is coming out of existing NHS budgets it could lead to lives lost as more cost-effective treatments are crowded out to make way for expensive new drugs.
“Importantly, the rebate % firms will have to pay if sales are higher than agreed has now been capped at 15%. Under the 2024 Voluntary Scheme for Branded Medicines Pricing and Access (VPAG), participating companies pay blended ‘rates’ which depend on the characteristics of their individual portfolios. New active substances, for example, are subject to 0% rebates while other drugs will be subject to rates varying between 10-35% according to the Association of the British Pharmaceutical Industry (ABPI). So, while at present we can’t be precise about the full impact of this change, the drugs bill will inevitably go up as intended.
“The uplift to the NICE threshold does not appear to be based on any considered technical analysis, and precedent has now been set making it an overtly political negotiation. Using the threshold to support wider economic policy muddies NICE’s role as the arbiter of value for individual health technologies.”
Sheuli Porkess, President, Faculty of Pharmaceutical Medicine (FPM), said:
“This deal is a significant moment for UK patients and for the future of pharmaceutical innovation. We strongly welcome the government’s commitment to accelerating access to new treatments and creating conditions that allow cutting-edge medicines to reach patients without unnecessary delay.
“Pharmaceutical physicians – the doctors who lead and oversee innovations in medicines, vaccines, medical devices, precision therapies, diagnostics, and digital health technologies – are central to this ambition. Without robust clinical evidence, ethical oversight and scientific rigour, innovation cannot translate into real patient benefit. The reforms announced today – from faster clinical trial approvals to more flexible NICE assessments – acknowledge the need for a system that keeps pace with modern medicine.
“As always, the detail of implementation will matter. Patients will only see the promised benefits if government and industry follow through with sustained investment and a secure, expert workforce across the development and regulatory landscape. FPM will continue to champion high standards and hold the system to account so the UK can truly lead in pharmaceutical medicine.”
Dr Huseyin Naci, Associate Professor, Department of Health Policy at LSE and Director of the Pharmaceutical Policy Lab, said:
“Raising NICE’s funding threshold won’t necessarily mean more drugs become available for patients. NICE already approves over 85% of the drugs it reviews, and over 90% when they offer added therapeutic benefits. The real impact will be higher prices for the same health benefit, as companies typically price up to the threshold. That means less money for other NHS services that deliver more health for less.”
Jane Wall, Managing Director, Bioindustry Association, said:
“BIA welcomes today’s announcements, which indicate strong forward movement on improving the competitive environment for biotech and pharma in the UK, ensuring preferential access for companies to the US market, improving their growth prospects and attractiveness to investors and global partners. Crucially, The UK now has a unique differentiator for the manufacturer of high-value, innovative medicines, with zero tariff access to both European and US markets.
“In addition, the key policy changes that will impact how NICE evaluates cost-effectiveness from April 2026 are also promising and we look forward to discussing the detail around the updated value set for evaluating health-related quality of life – BIA has consistently called for wider socioeconomic benefits of medicines to be taken into account.”
David Mott, Associate Director, Office of Health Economics (OHE), said:
“We welcome NICE’s long-overdue move to adopt a value set based on EQ-5D-5L rather than continuing to use a value set derived from the public’s preferences collected in the 1990s. This shift means that current preferences and priorities around different aspects of health-related quality of life will be reflected in NICE’s decision making, rather than attitudes from three decades ago. In particular, it offers the possibility that areas of health that have become more prominent in public discourse, such as mental health, may be better recognised.
“We eagerly await the publication of the new value set and encourage further research to help end users understand how it differs from the one it replaces, as well as what implications this change may have for the funding of new technologies.”
Chris Sampson, Senior Principal Economist, Office of Health Economics (OHE), said:
“This announcement implies an interesting mix of evidence standards. The adoption of the EQ-5D-5L value set reflects long-overdue recognition of methodological improvements in the measurement and valuation of health. This should have happened years ago [1]. The “25% increase” in the cost-effectiveness threshold, however, appears to have been specified without meaningful evidence about its likely impact on the NHS, driven instead by trade negotiations.
“Both changes will reallocate NHS resources in ways we don’t yet fully understand, though they are unlikely to have dramatic consequences. NICE expects that the threshold increase will enable 3 to 5 additional medicine approvals annually. The EQ-5D-5L adoption may prove more significant, affecting all future appraisals by better aligning health technology assessments with societal values.
“The prospect of a three-year review establishes a valuable precedent. Cost-effectiveness thresholds should evolve with changing health system constraints, and not remain static for decades as has NICE’s £20,000-£30,000 threshold. This creates an opportunity to develop more systematic, evidence-based processes for future threshold-setting [2].
“The trade and investment dimensions are likely positive for the UK economy, protecting over £5 billion in annual pharmaceutical exports and supporting a vital industry. However, whether this deal ultimately results in significant benefit for patients and the NHS depends on the availability of new investment. The commitment to an increase in medicines spending from 0.3% to 0.6% of GDP should be accompanied by corresponding increases in NHS spending commitments. Without this investment, increased spending on newly-approved medicines risks displacing existing cost-effective care.”
[1] Sampson, C., 2022. NICE and the EQ-5D-5L: Ten Years Trouble. PharmacoEconomics – Open, 6(1), pp.5–8. DOI: 10.1007/s41669-021-00315-1.
[2] Sampson, C., Zamora, B., Watson, S., Cairns, J., Chalkidou, K., Cubi-Molla, P., Devlin, N., García-Lorenzo, B., Hughes, D.A., Leech, A.A. and Towse, A., 2022. Supply-Side Cost-Effectiveness Thresholds: Questions for Evidence-Based Policy. Applied Health Economics and Health Policy, 20(5), pp.651–667. DOI: 10.1007/s40258-022-00730-3.
Nicola Perrin, Chief Executive of the Association of Medical Research Charities, said:
“Our member charities repeatedly tell us that the people they represent don’t have the luxury of time. Today’s announcement is an important step to ensure that patients can access innovations as quickly as possible. It will help cement the UK as one of the best places in the world to discover, test and roll-out new treatments.
“We look forward to working with the Government and NICE to ensure that new ways to assess the value of medicines recognise the wide-ranging economic impacts of diseases on patients and their families, and the wider benefits they bring to society, the NHS and the economy.”
Prof Penelope Ward, Visiting Professor in Pharmaceutical Medicine, Kings College London, said:
“This is very good news for the UK pharma industry today with the government successfully securing a zero-tariff deal on pharmaceutical imports from the UK to the USA. It is also encouraging to note a planned uplift in government investment to enable the NHS greater access to innovative medicines than has been the case in the past. However, while this is welcome, the increased sum will still lag behind comparative per capita spend in the US and EU. UK patients deserve better still!
“Pharmaceuticals are one of this country’s major remaining manufacturing industries and a major employer of STEM graduates. Without the innovations this country has made, many of the advances in clinical care we have seen in the past would not have been achieved. Our government can be proud of this history and must find a way to work together with the industry to enable this sector to scale even greater heights in the future.”
Prof Azeem Majeed FMedSci, Professor of Primary Care and Public Health, said:
“This announcement represents an important shift in the UK’s approach to how new medicines are evaluated, priced and adopted. Faster access to innovative treatments for conditions such as cancer will be welcomed by patients and clinicians, and increased investment in medicines may help the UK attract more clinical research and early launches.
“However, the impact of these proposals will depend heavily on implementation. Raising NICE’s cost-effectiveness thresholds is likely to increase overall NHS spending on medicines. Without corresponding investment in areas such as workforce, diagnostics and primary care, there is a real risk that higher drug spending could divert resources from other essential parts of the NHS. A more flexible pricing environment may also reduce the UK’s future negotiating leverage with industry. Ensuring that NICE’s independence and methodological rigour are maintained will be crucial for sustaining both public and professional confidence.
“These changes have the potential to benefit patients and strengthen the UK’s life sciences sector. But they will require careful monitoring to ensure that the promised improvements in access, equity and health outcomes are actually realised, while also managing the financial pressures on an already stretched NHS.”
Prof Karl Claxton, Professor of Health Economics, Centre for Health Economics, University of York, said:
“Government conceding to the pressure to increase how much the NHS pays for new drugs will have a catastrophic impact on NHS patients, the social care sector and local economic growth, which will not be compensated by any affordable new drugs or inward investment in the UK.
“The value of the harm likely to be done, whether or not The Treasury or the NHS ultimately picks up the bill, will far exceed the value of any impact on the UK pharmaceutical sector due to tariffs that might be imposed.
“It is claimed that these concessions will add an additional £3bn to the NHS drugs bill each year, although the full cost is likely to be higher. A body of published research over more than 10 years provides robust evidence of the likely impact of this ‘deal’. If the NHS ultimately picks up the bill, we can expect 15,971 additional deaths and 352,000 years of life in good health to be lost each year. If Treasury pays the bill they could have spent it on the NHS instead, and reduced mortality by 14,911 deaths and improved health by 332,000 years in good health (QALYs). Either way it will lead to £66m increase in social care costs, which if not covered by local authorities, will lead to further reduction in quality of life of users and unpaid carers of at least 24,000 QALYs. There will also be an impact on local economic growth, reducing GDP by between £18bn and £26bn.
“This is a catastrophe for all NHS patients. We would expect the greatest impact on reduced survival for patients with cancer, circulatory, respiratory, and gastro-intestinal diseases, and significant impacts on the quality of life for patients suffering from respiratory, gastro-intestinal, endocrine, neurological, muscular skeletal and mental health problems. As well as reducing health outcomes for NHS patients, we can also expect an increase in health inequality. We can also expect considerable negative impacts on the economy. A conservative estimate would be a loss of £6bn with larger long-term effects. We also know that this will have an impact on the Adult Social Care sector, increasing local authority costs by £130m each year. If local authorities are unable to cover this additional expenditure, we can expect a further increase in mortality for NHS patients, reduced quality of life and increased anxiety and depression among service users and their informal carers, and a further reduction in economic growth. The findings of this research simply reflect that fact that much of what the NHS does is extremely good value of money.
“We urgently need to see an Impact Assessment, which takes account of the full weight of robust research evidence with a comprehensive valuation of all the impacts. Only then can NHS patients and the general public understand the consequences of this decision made on their behalf and appropriate parliamentary scrutiny can then be applied to this deal to examine whether it constitutes a good use of scarce public funds.”
Prof Ed Wilson, Professor of Health Economics and Health Policy, University of Exeter, said:
“Whilst some patients will benefit from new drugs in this new deal, and industry will undoubtedly welcome it, NICE and the Government need to remember that NICE exists to think about who loses from any such decision.
“When we say yes to a new drug, we must reallocate budgets to pay for it. This means reducing spending on other services, so other patients lose out. We want to make sure that when we say yes to a new treatment, we get more health than we lose from moving budgets to pay for it.
“The best evidence we have tells us the NHS generates the equivalent of one year of perfect health for every £5,000 to £15,000 spent, suggesting NICE’s threshold was already too high. Increasing it to £25,000 means we have to cut back even more on other services to pay the higher drug prices, so perversely this decision will likely end up reducing the overall health of NHS patients, not improving it.”
Richard Torbett, Chief Executive of the ABPI, said:
“The deal is an important step towards ensuring patients can access innovative medicines needed to improve wider NHS health outcomes. It should also put the UK in a stronger position to attract and retain global life science investment and advanced medicinal research.
“These commitments begin to address industry concerns on NHS access to medicines, and the UK’s record-high and unpredictable payment rate. There remain a great many details to work out and further technical improvements to make, but with this strong and positive progress, I look forward to working with the government to ensure this plan delivers for the NHS and UK industry.”
Professor Andrew Morris CBE FRSE PMedSci, President of the Academy of Medical Sciences, said:
“A thriving UK life sciences sector is vital for patients – delivering both the drugs that keep us well and the research that helps us live healthier lives. Holding medicines to a higher standard than other health interventions has fundamentally undervalued their contribution to patient care. We welcome the Government’s intention to increase investment in medicines. This move better reflects the true value and benefit that medical science brings to patient care by supporting faster, fairer access to innovative treatments. Without competitive pricing and assessment frameworks, the UK risks losing cutting-edge research and clinical trials to other countries – ultimately lowering standards of care. This represents an important step towards better patient outcomes and maintaining the infrastructure where today’s research becomes tomorrow’s care.”
DHSC Press Release: https://www.gov.uk/government/news/landmark-uk-us-pharmaceuticals-deal-to-safeguard-medicines-access-and-drive-vital-investmentfor-uk-patients-and-businesses
NICE Press Release: https://www.nice.org.uk/news/articles/changes-to-nice-s-cost-effectiveness-thresholds-confirmed
Declared interest
Francis Ruiz: I was an employee of NICE from 2003 to 2016.
Sheuli Porkess:
Other appointments, voluntary or otherwise, e.g. trusteeships, directorships, positions of office:
Chief Medical Officer & Director of Reinventing Health Director PM Life Sciences Consulting Ltd Member of UKRI Multiple Long-Term Conditions Clusters Programme Steering Group Member of Royal Society of Medicine Digital Health Council.
Membership of any professional bodies, special interest groups or mutual support organisations:
Member of BMA Fellow of Royal College of Physicians Global Fellow in Medicine Development with IFAPP Fellow of Royal Society of Medicine.
Shareholdings / investments (5% or more of issued capital):
Shareholder of Actaros Consultancy Limited Shareholder of Reinventing Health Shareholder of PM Life Sciences Consulting
Gifts or hospitality offered (accepted or not) in connection with your FPM role in last 12 months:
July 2024 RC Anaesthetists President’s Dinner October
2024 FSEM Reception November
2024 RCPSG Annual Conference & President’s Dinner December
2025 AoMRC Presidents Dinner December
2024 RCOG Annual Dinner December 2024, FSRH Annual Conference Dinner December
2025, box of Christmas chocolates from PharmaMedic Consultancy Ltd 1 March
2025 RCOphth Dinner March
2025 RCP Council Dinner March 2025 MHRA Celebration drinks
April 2025 Ticket to ABPI Conference
April 2025 AMS Leaving drinks reception
May 2025 Society of Apothecaries Galen Awards and Dinner
June 2025 RCPath Annual Dinner July
2025 RCoA President’s Dinner
July 2025 Faculty of Public Health President’s Leaving Dinner
Any other conflicts that are not covered by the above:
Sister – Veronica Porkess – employee at UCB
Brother-in-law – Fraser Murray – CEO Pheno Therapeutics, Head Scientific Evaluation Advent Life Sciences, co-founder Pandeia Therapeutics, advisor Chronos Therapeutics, Director Woodyett Consulting
Husband – Mark Ferguson – co-Director of Actaros Consultancy Limited
Dr Huseyin Naci: I have no conflicts of interest to declare.
Chris Sampson: Chris Sampson is an employee of the Office of Health Economics (OHE), an independent research organisation, which has received research funding from the Association of the British Pharmaceutical Industry and various companies that are likely to have an interest in this story. He is also a member of the EuroQol Group, which develops and maintains the EQ-5D-5L. The views expressed here do not represent those of the EuroQol Group, OHE, or any of OHE’s funders.
Prof Penelope Ward: Owner and Director of a private consulting company assisting pharma and biotech companies with drug and device development strategy.
Prof Azeem Majeed: No conflicts of interest.
Prof Karl Claxton: No conflicts of interest.
Prof Ed Wilson: EW is director of PenTAG at the University of Exeter, one of 11 academic evidence assessment groups (EAGs) whose role is to review and critique industry submissions to NICE.
For all experts, no reply to our request for DOIs was received.