NHS drug prices look set to rise as Sir Keir Starmer is close to bowing to Donald Trump’s demands to pay pharmaceutical companies more money.
It comes as officials briefed the Trump administration on new proposals to adjust how the NHS prices medicines earlier this week, including raising the National Institute for Health and Care Excellence (NICE) threshold by 25 per cent.
The revelation, first reported by Politico, is the government’s attempt to avoid a wave of new tariffs threatened by President Trump over what he believes to be anticompetitive practices by the UK.
Under the current rules, the NICE threshold measures whether a treatment offers good value for money. This means that if a drug costs the NHS between £20,000 and £30,000 for every extra year of good-quality life it delivers to a patient, it is considered good value.
But, under new proposals being put to the White House, this threshold would be raised, meaning that the UK will pay more for drugs overall.
While the Treasury has resisted any changes because they will not bring in any extra benefits, a source told Politico, “This is the price you have to pay post-Trump for global pharma to continue to play in the UK.”
It comes as the prime minister is trying to make positive headlines on trade during a trip to India after securing a trade deal with the country.
But the price hike is a sour note in what had been a positive relationship with Trump’s White House, where Sir Keir had managed to secure the first trade deal to unpick the president’s sweeping tariff regime launched earlier this year.
There is also a continuing headache over hopes for the UK to slash steel tariffs from 25 per cent to zero, with talks apparently stalling months after Downing Street had hoped it had secured an agreement.
Trump has threatened to impose tariffs as high as 100 per cent on pharmaceutical imports. This is despite the UK securing “preferential treatment” on tariffs, which were conditional on improved pricing for American pharma companies operating in Britain.
A UK government spokesperson said: “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 spokesperson added: “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.”
