Around £45bn in NHS funding will be diverted from other NHS care by 2036 to pay more for new medicines under the UK-US trade deal agreed last December unless more funding is made available to cover the additional costs, suggests an analysis published by The BMJ today.
Reduced NHS spending on other health interventions would have an adverse impact on public health which could increase excess preventable deaths by 229,000 by 2036 – more than the covid-19 pandemic between March 2020 and June 2022 (137,000). If the indirect effect on adult social care is also included, excess deaths increase to 291,000, argue the authors. Most of these deaths are expected to be people with cardiovascular, respiratory, and gastrointestinal disease and cancer.
The UK-US pharmaceuticals deal was announced by the UK government on 1 December 2025 and described as a "landmark" deal that would "safeguard medicines access and drive vital investment for UK patients and businesses" through strengthening UK-US cooperation in sectors like life sciences and pharmaceuticals.
The agreement secured a 0% tariff on UK pharmaceutical and medical device exports to the US for three years, but also committed the NHS to substantially higher expenditure on new branded medicines over the next decade through changes to drug pricing arrangements and health technology assessment.
From April 2026 the government instructed the National Institute for Health and Care Excellence (NICE) to increase its cost-effectiveness threshold for new medicines from £20,000-£30,000 per quality adjusted life year (QALY) to £25,000-£35,000 per QALY for the same health benefits.
Changes in the way health benefits are measured by NICE's assessments will also give more weight to benefits offered by new medicines. QALYs combine gains in survival and quality of life into a single measure and NICE has generally required a cost-effectiveness threshold of £20,000-£30,000 per QALY to balance the health gains offered by new medicines against the detrimental impact on health if NHS resources were displaced from other services.
An agreement between the pharmaceutical industry and the UK government (the voluntary scheme for branded medicines pricing, access, and growth; VPAG) designed to limit growth in NHS expenditure on branded medicines through industry rebate payments has also been watered down. In 2025 the rebate rate was 23% but under the new agreement this has been cut to 14.5%.
Overall, under the deal, the government has committed to more than double spending on new medicines from 0.3% of gross domestic profit (GDP) to at least 0.6% by 2036, with interim targets of 0.35% of GDP in 2028 and 0.4% of GDP in 2030.
The Department of Health and Social Care has undertaken an impact assessment on the wider costs of this trade deal, but this document has not been made publicly available.
The authors are calling for the full details of the deal and its impact assessment to be made public so the deal can receive parliamentary scrutiny. They also emphasise that many of the suggested benefits of the deal, such as claims that higher UK medicine prices will stimulate pharmaceutical innovation and investment in the UK, are uncertain.
Assuming these GDP targets are met and GDP rises by 1.5% annually, as predicted by the Office for Budgetary Responsibility (OBR), the additional annual costs to the English NHS will be at least £1.3bn in 2028 (£25m per week), and £8.8bn in 2036 (£170m per week). The cumulative additional cost will be £2.6bn by the end of 2028 and £44.7bn by the end of 2036.
Modelling of English local authority data suggests that every £1bn the NHS must find to fund this deal will increase the costs of publicly funded adult social care by £118m because of increases in morbidity and mortality.
NICE estimates that increasing cost effectiveness thresholds will result in only two to five additional medicines being approved annually. NICE already approves more than 90% of medicines it evaluates, suggesting that the agreement is more likely to increase the prices paid for medicines already entering the NHS rather than substantially expand access.
While the agreement establishes zero tariffs on UK pharmaceutical and medical device exports to the US for three years, the UK remains a net importer of medicines. The economic benefits of securing zero tariffs for UK pharmaceutical exports has also been substantially diminished since a US Supreme Court ruling reduced the proposed tariffs from 100% to 10%. The projected costs of the agreement are expected to exceed the total annual value of UK medical exports to the United States (£5bn) before 2031.
The authors say, "The government's willingness to accommodate industry pressure while the NHS absorbs the resulting costs raises important questions about transparency and accountability."
They add, "More importantly, it emphasises a broader structural problem at the heart of a health system conceived with the intention of delivering equitable, patient centred care, now reduced to underwriting risk in global pharmaceutical markets."
