The UK government is engaged in intensive efforts to resolve a damaging standoff with major pharmaceutical companies, with ministers developing proposals to significantly increase the financial thresholds for assessing new medicines.
Night and Day Negotiations
Science Minister Patrick Vallance has revealed that officials are working day and night to mend the fractured relationship with drug manufacturers following collapsed pricing negotiations. The former GSK executive told industry leaders at London Life Sciences Week that the government remains clear eyed about the challenges facing companies operating in Britain's current commercial environment.
Ministers are crafting plans to raise cost-effectiveness thresholds used to evaluate new medications for NHS use by approximately 25% overall. This substantial adjustment comes as analysis shows the UK spends less than other European nations on new drugs as a percentage of GDP.
Investment Exodus and International Pressure
The urgency follows several high-profile investment withdrawals after Health Secretary Wes Streeting issued an ultimatum in late August that caused negotiations to break down. Multiple pharmaceutical giants including MSD, AstraZeneca and Eli Lilly subsequently abandoned or paused planned UK investments.
The situation escalated when Eli Lilly's chief executive Dave Ricks described the UK as probably the worst country in Europe for drug pricing. Complicating matters further, former US President Donald Trump has pressured pharmaceutical firms to lower American drug prices while increasing them elsewhere, threatening 100% import tariffs for non-compliance.
Rebuilding Britain's Life Sciences Ambition
Despite current tensions, Vallance outlined an ambitious vision to establish Britain as Europe's leading life sciences power by 2030, ranking among the top three globally alongside the US and China by 2035. He pointed to recent significant investments as evidence of underlying strength, including:
- Moderna's £150 million vaccine facility in Oxfordshire
- BioNTech's £1 billion ten-year investment commitment
- Convatec's £500 million research centre in Manchester
London Mayor Sadiq Khan highlighted that the capital's life sciences sector has already attracted £1.6 billion in venture capital investment this year - more than Paris, Stockholm and Berlin combined. He noted London's historic role in medical breakthroughs from penicillin discovery to cholera cause identification.
Meanwhile, Dame Anne Glover of Amadeus Capital emphasised that UK pension funds must increase venture capital allocations to support science startups, stating that a mere half percent of pension fund assets going into venture capital would transform our market.
