UK-US Pharma Deal Secures Access, Boosts UK Investment

Tens of thousands of NHS patients will benefit from a landmark trade deal between the UK and the US, which will secure and expand access to vital drugs, safeguard our medicines supply chain, and drive crucial investment while supporting UK patients and industries. 

The deal - part of the UK-US Economic Prosperity Deal - sees the UK become the only country in the world to secure a zero percent tariff on pharmaceuticals to the US - protecting UK-based manufacturing and cementing our place as a world leader for life sciences investment. The deal will also secure preferential terms for the UK's med tech exports meaning no additional new tariffs on medtech to unlock further investments in UK and a further boost to growth.

The move has secured the confidence of the pharmaceutical industry that the UK is a top destination for investment and growth, with major firms like Moderna, Bristol Myers Squibb,  and BioNTech investing billions here, driving renewed confidence in the UK and supporting the government's ambition for the UK to become Europe's leading life sciences economy by 2030.

The government will also invest around 25% more in innovative, safe, and effective treatments - the first major increase in over 2 decades. It means the National Institute for Health and Care Excellence (NICE) will be able to approve medicines that deliver significant health improvements but might have previously been declined purely on cost-effectiveness grounds - this could include breakthrough cancer treatments, therapies for rare diseases, and innovative approaches to conditions that have long been difficult to treat. These changes will ensure that NICE is able to continue its world leading approach to assessing drugs and treatments and keep pace with the commercial and economic environment in which pharmaceutical companies are operating in today.

This is supported by confirmation that - thanks to strong UK support for innovation - the UK has secured mitigations under the US' 'Most Favoured Nation' drug pricing initiative so that we will continue to ensure access to the latest treatments. This will encourage pharmaceutical companies from around the world to prioritise the UK for early launches of their new medicines, meaning British patients could be among the first globally to access breakthrough treatments. 

The UK has a history of international leadership in early access to innovative drugs. It has delivered breakthrough medicines like Blenrep, a revolutionary blood cancer therapy for multiple myeloma which the NHS in England was the first health system in the world to roll-out; Kimmtrak, the first-of-a-kind eye cancer drug; and Aucatzyl, the personalised leukaemia treatment which is now benefitting NHS patients and used around the world. The reforms announced to the UK's drug pricing system could make these kind of early, innovative launches more regular for UK patients. 

Investing in medicines helps keep people healthier for longer, reducing pressure on the health service over the longer-term.   

Science and Technology Secretary, Liz Kendall said: 

This vital deal will ensure UK patients get the cutting-edge medicines they need sooner, and our world-leading UK firms keep developing the treatments that can change lives.

It will also enable and incentivise life sciences companies to continue to invest and innovate right here in the UK. 

This will support thousands of skilled jobs, boost our economy and ensure that the breakthroughs that happen in our labs turn into treatments that benefit families across the country.

The deal further strengthens US-UK relations and delivers on the commitments made in the UK-US Economic Prosperity Deal signed in May.  

As part of our ongoing discussions with the US Administration, the US has confirmed the UK will get a preferential tariff rate of 0% for all UK pharmaceutical exports for at least 3 years - the lowest rate offered to any country.   

Business and Trade Secretary Peter Kyle said:

This deal guarantees that UK pharmaceutical exports - worth at least £5 billion a year - will enter the US tariff free, protecting jobs, boosting investment and paving the way for the UK to become a global hub for life sciences.

We will continue to build on the UK-US Economic Prosperity Deal, and the record-breaking investments we secured during the US State Visit, to create jobs and raise living standards as part of our Plan for Change.

These changes build on recent Department of Health and Social Care plans to halve the time it takes to approve clinical trials from 91 to 41 days, ensuring patients can participate in potentially life-changing research several weeks sooner than before.  

The pharmaceutical sector's continued strength is vital for patients who depend on innovative medicines to treat and prevent disease.   

This deal links directly to the government's 10 Year Health Plan and forms part of its Modern Industrial Strategy and Life Sciences Sector Plan , with life sciences identified as a key growth-driving sector that will create high-quality jobs and boost the economy.

It also builds on the government's commitment to turbocharge medical research through better and faster access to NHS data for researchers via a new Health Data Research Service (HDRS) that will transform access to NHS data and slash red tape for researchers.

Science Minister Lord Vallance said: 

We are entering an era of preventions and cures, and this landmark deal will ensure British patients are among the first in the world to access them. 

This is a vital agreement that delivers 2 big benefits. It will help us get the best and most innovative treatments to patients right across the UK quickly.  

And with a world-beating deal on US tariffs, it is a huge boost for our pharmaceutical industry - cementing the UK as the destination of choice for life sciences businesses to invest, innovate, and grow.

Health Minister Zubir Ahmed said:  

Every patient deserves access to the best possible treatment.   

This deal is fundamentally about putting patients first - patients and families facing serious illness, this represents new hope and the possibility of treatments that could transform and even save lives.  

There is a revolution taking place in life sciences, and this deal will allow NHS patients to receive innovative treatments faster, extending lives and giving families more precious time together.  

This package of changes will bring the best of pharma to the UK for the benefit of our patients, our NHS and our economy.

Bristol Myers Squibb Board Chair and CEO, Chris Boerner, said:

Based on the UK commitments and increased investment in innovative medicines underpinning this agreement, BMS anticipates being able to invest upwards of $500 million over the next 5 years. This investment will come across multiple areas of the business including research, development, and manufacturing. This agreement is a sign of progress and one that creates an environment conducive to our continued presence in the UK.

This agreement forms part of the government's Life Sciences Sector Plan, backed by over £2 billion of investment and developed to ensure the UK remains at the forefront of medical innovation.   

When patients need cutting-edge treatments, the UK's position as a global leader means those treatments are more likely to be developed, tested, and made available here first.  

Bristol Myers Squibb Board Chair and CEO, Chris Boerner, said:

Based on the UK commitments and increased investment in innovative medicines underpinning this agreement, BMS anticipates being able to invest upwards of $500 million over the next 5 years. This investment will come across multiple areas of the business including research, development, and manufacturing. This agreement is a sign of progress and one that creates an environment conducive to our continued presence in the UK.

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.

Sarah Sleet, CEO of Asthma + Lung UK, said:

People living with lung conditions will welcome progress being made to get them quicker access to innovative medicines. If we want to reduce life threatening flare ups in conditions, cut reliance on oral steroids and help people stay out of hospital, we need to make sure patients get fast access to innovative medicines consistently wherever they live.

Raising the cost effectiveness thresholds and updating NICE's methods should make it easier for proven, high value treatments to reach the people who need them most. We look forward to working with government, the NHS and industry to ensure these changes translate into real improvements in care and quality of life for patients across the UK.

Dan Knowles, CEO of Brain Tumour Research, said:

This new flexibility in the NICE cost effectiveness model will bring our patients greater hope.

An invitation to access clinical trials should be an expectation for all cancer patients and the increase in life sciences net spend sets us firmly on the route to achieving this.

Our sincere hope is that this announcement takes us further along the collaborative pathway for government, the pharmaceutical industry and patient advocacy groups to make a difference in the options and outcomes for the most important group of all - patients.

Dr Sophie Castell, Chief Executive at Myeloma UK, said:

Every day counts when you're living with the incurable blood cancer myeloma so anything that brings medicines into the hands of patients faster and allows them to live better and longer lives is a hugely positive and welcome move.

People with myeloma rely completely on innovative treatments, because surgery or radiotherapy are not options for treating myeloma, so getting access to the best new drugs as quickly as possible is a lifeline.

It is clear from today's announcement that the government recognises that access to clinical trials and innovative medicines is essential to ongoing improvement in clinical outcomes.

We are especially pleased to see the proposed changes to NICE's methodology that we hope will improve the way quality of life is assessed at NICE. Until we have a cure, it is absolutely key that people with myeloma have as many options as possible to keep their cancer under control.

Notes

Most Favoured Nation (MFN) is a US government policy to lower the cost of medicines in the US to match prices in other developed countries.

A 25% increase in medicine pricing corresponds to 2 changes to the way NICE evaluates medicines; a change to the cost effectiveness thresholds and the introduction of a new value set for judging health states.

NICE currently assesses value for money for the NHS by applying a standard cost-effectiveness range of £20,000 to £30,000 per quality adjusted life year gained over and above current treatments. This means that for a medicine to be considered cost effective, it should typically generate the equivalent of 1 additional year of perfect health taking account of additional life expectancy and health-related quality of life improvements for no more than £20,000-£30,000 over the cost of current care. It has now been agreed that NICE will apply new thresholds of £25,000 to £35,000/QALY.

As part of today's announcement, the government will support NICE's use of a new value set for valuing health-related quality of life. The value set comes from asking thousands of people from the public to judge how good or bad different health states would be. These are then used to calculate numerical values, which help healthcare decision-makers compare different treatments and understand their impact on health-related quality of life. NICE will introduce the new value set for use alongside EQ-5D-5L following consultation. This change may additionally improve the cost-effectiveness of medicines on average.