UK drug prices necessary to stop feud with companies, says science minister
The price the NHS pays for medicines will need to rise to end the feud with pharmaceutical companies and stop the exodus of investment in the UK, science minister Patrick Vallance has said.
Lord Vallance told the Financial Times that “all options” were on the table in terms of UK drug pricing, after several large pharmaceutical companies had pulled or scrapped investments in recent weeks, citing the UK as uncompetitive.
Critics of the sector credit low prices for new drugs, a lack of government investment and ongoing tariff pressure from Donald Trump to firms turning away from the UK.
Vallance said: “We need to fix the commercial environment so that it’s good enough to get those companies back again and benefits patients in the NHS.”
He added that this “means probably for medicines, we need to pay a bit more for some of them.”
Drug price talks collapse
The science minister’s comments follow the collapse of negotiations between the government and pharma companies over a clawback tax on drug sales to the NHS last month.
The UK government said it had put forward a generous offer to accelerate growth, with health minister Wes Streeting insisting he would not allow pharma companies to “rip off” taxpayers.
The industry has also felt the increasing pressure of Trump’s bid to reduce costs for patients in the US, with the president using lower prices outside America as leverage against pharmaceutical companies.
He has also promised tariff relief to those who increase their manufacturing footprint in the US, while threatening higher tariffs on drugs imported into the US.
However, Vallance said the battle over UK drug prices could not be solved without negotiations with the US, adding the government had “constructive talks” with US counterparts last week to find an answer that considered concerns, including tariffs.
New Moderna vaccine factory
Vallance was speaking at the opening of US vaccine giant Moderna’s new centre in Oxfordshire on Wednesday.
The plant could produce up to 250m vaccine doses a year in a future pandemic, and will manufacture seasonal flu and COVID-19 jabs.
According to the government, Moderna is investing more than £1bn into UK research and development as part of a 10-year partnership to create new treatment jobs and boost pandemic resilience.
The company’s UK commitment is positive news for the sector, following heavyweight Merck’s decision to scrap a £1bn research centre in London, and AstraZeneca’s pausing of a £200m investment in Cambridge earlier this month.
Stephane Bancel, chief executive of Moderna, said he never considered pulling its Oxford investment and stressed drugmakers were open to doing a deal with the UK.
He added: “The industry is extremely willing and wanting to find a way with the government.”
“As always it takes two to tango.”
However, Dave Ricks, chief executive of Eli Lilly, one of the world’s biggest drug companies, criticised the competitiveness of Britain’s business backdrop, telling the Financial Times that the UK was “probably the worst country in Europe” for drug prices, intensifying the industry’s lobbying of the government to improve a contentious NHS supply agreement.
The UK government also launched a new £50m fund to lure life science companies to invest in the country, pledging to support large-scale capital-intensive projects worth at least £100m.