October 8, 2025

expert reaction to reports from Politico that the UK government has drawn up proposals to increase the amount the NHS pays pharmaceutical firms for drugs

Scientists comment on reports from Politico that the Government are proposing to increase the price the NHS pays pharmaceutical firms for drugs. 

Professor Mark Sculpher, Professor and Head of Department, Centre for Health Economics, University of York, said:

“NICE’s approach to how it appraises new drugs which determines the price the NHS pays has been a source of complaint from the pharma industry for many years.  NICE has flexed the system several times to accommodate these complaints – for example, NICE increases its cost-effectiveness threshold to £50,000 for treatments for severe disease (usually £30,000). There are suggestions that the Government may agree to spend more on new branded pharmaceuticals by increasing the NICE cost-effectiveness threshold more generally.  This threshold should be based on the benchmark of how much it costs to improve health elsewhere in the NHS.  Extensive evidence by the University of York, from publicly funded research, indicates that the wider NHS can improve health for less than half the cost of the basic NHS threshold of £30,000 per healthy additional year of life.   So current practice can result in an overall reduction in the health of the population when NICE approves a new product as it takes money away from more efficient services. 

“The industry position suggests that, unless new drug prices increase, life sciences in the UK will take a hit.  But the factors that attract investment to life sciences are things like taxation, grants and a skilled workforce. There is no reason why the prices the NHS pays for new products should influence this investment. 

“The geopolitical position is, however, complex and may force a trade-off between the health of the population and UK trade. If so, the Government should be transparent about how any changes will be funded and the likely impact on the health of patients.”

Prof Azeem Majeed FMedSci, Professor of Primary Care and Public Health, Imperial College London, said:

“Elevating the cost-effectiveness threshold applied by the National Institute for Health and Care Excellence (NICE) by 25 percent from its established range of £20,000 to £30,000 per quality-adjusted life year (QALY) would increase access for NHS patients to innovative treatments that were previously excluded on grounds of excessive cost relative to their clinical benefits.

“However, this change would also put increased pressure on the NHS budget. It is difficult to quantify the extra spending that might result from a wider range of drugs becoming available for use in the NHS through this change but any extra spending on these treatments would have to be matched by reductions in spending on other health services. The government would also need to consider any benefits that might occur from increased investment in research and development in the UK by global pharmaceutical companies.

“Hence, it is not a straightforward issue and the Department of Health and Social Care, the Department for Business and Trade, and the Treasury may all have differing views about the relative costs and benefits of the change. Ultimately, the decision will depend on the government’s political and economic priorities and its assessment of the relative importance of the competing costs and benefits.”

Prof Ed Wilson, Professor of Health Economics and Health Policy, University of Exeter, said:

“NICE’s threshold of £20,000 to £30,000 per every extra year of good-quality life represents how much NICE thinks it costs to generate one year of good-quality life in the NHS.  Because resources are finite, 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 foregone.

“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.

“The best evidence we have as to how much it costs the NHS to generate one year of good-quality life comes from data covering 2003 to 2012, and varies between £5,000 and £15,000 (Lomas et al. 2019).  Crudely extrapolating this to 2025 prices gives a figure of £22,300, possibly a little higher given the relatively high inflation in recent years, bang on NICE’s current threshold, implying that it was set implausibly high to begin with (in 2004).  A recent article in the Lancet put the accumulated loss to NHS patients due to this at 1.25 million since 2000 (Naci et al. 2025). 

“NICE has introduced a number of modifications to its process over recent years that have de facto raised the threshold, for example the severity modifier (which allows NICE to increase the weight it places on the health gain for treatments for more severe diseases, which effectively increases the threshold) and the highly specialised technologies route (the HST committee looks at treatments for very rare diseases which tend to be very expensive due to low volume and so would never meet the standard threshold), although these have clear equity justifications.  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, University of Leeds, said:

“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. I am not aware of any research, taking improving the health of the nation as the goal of healthcare spending, that suggests it is too low. Any move to increase the threshold would be motivated by twin pressures that are geopolitical and from the pharmaceutical industry.

“The best-available estimates of the cost-effectiveness of relevant NHS activity in England have, for nearly a decade, implied that the acceptance of new health technologies at prices implied by the NICE cost-effectiveness threshold is already highly likely to substantially reduce population health due to this threshold being set too high. Despite comment articles, sometimes authored with explicit acknowledgement of pharmaceutical industry funding, seeking to call these estimates into question, no better estimates have to my knowledge been produced.

“A recent paper in the Lancet (https://www.thelancet.com/pdfs/journals/lancet/PIIS0140-6736(24)02352-3.pdf) quantified the estimated net health loss in England arising from this too-high setting of the threshold, and its implications for decision-making from 2000 to 2020, has been to harm population health by 1,250,000 years of good quality life (estimated in quality-adjusted years, QALYs).

“As a point of comparison to the 1.25m extra years of good-quality life estimated to have been lost over the time period considered by the authors, a paper considered by SAGE (https://assets.publishing.service.gov.uk/media/61436e14e90e070446ce51f5/S1366_Direct_and_indirect_health_impacts_of_C19_-_Short_Paper.pdf) in September 2021 estimated that around 800,000 per every extra years of good-quality life – approximately one third less than that implied in total, albeit over a much longer time period, by this paper – had been lost as a direct result of COVID-19 in the first year of the pandemic. These numbers are huge, and any move to increase the threshold would, on the basis of this research, increase the loss to population health still further than would otherwise be the case.

“While it may seem counterintuitive that the provision of a new clinically effective treatment may damage population health, the health gain arising from such a new clinically effective treatment must be seen set against the health loss arising from the denied alternative use of the funds used to provide it – alternative uses that may have provided health in a more cost-effective way. Where the health loss arising from not providing these alternative services exceeds the health gain from the allocation of funds to a new treatment, this causes a net loss to population health.

“Those who benefit from a newly-provided expensive treatment are identifiable – and are understandably given high prominence in reporting on these decisions. Those whose health does not benefit from alternative services – services that are not provided due to the use of funds to provide this new treatment – are however no less real for their lack of identifiability, and it would seem ethically problematic to consider their health to be less important for this lack of identifiability. Unfortunately, however, their relative lack of identifiability can make their suffering less salient and less visible in popular discourse.

“Just as medical professionals are mandated to do no harm to the patient in the room in front of them, we might see one valid ethical and practical mandate on policy-makers and decision-makers of this type to do no harm to population health. There are substantial pressures against this – both geopolitically and from the pharmaceutical industry – and 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.”

https://www.politico.eu/article/britain-eyes-nhs-drug-spending-hike-to-stave-off-trump-tariffs/

Declared interests

Prof Ed Wilson: EW is director of PenTAG, one of NICE’s independent academic external assessment group that appraises industry submissions to NICE.  He sits on NICE’s Highly Specialised Technologies Appraisal Committee.  The views expressed are those of the author and not of PenTAG, NICE or his employer.

Dr Dan Howdon: No COIs.

Professor Mark Sculpher: I have received research funding (through the University of York) to provide evidence on NICE cost-effectiveness threshold and other aspects of drug pricing. I do some consultancy for pharma companies.

Prof Azeem Majeed: No COI.

For all other experts, no response to our request for DOIs was received.