The UK-US pharmaceuticals trade deal could divert up to £45bn from other NHS care to fund higher spending on new medicines, according to a new analysis published in The BMJ.
The paper, by researchers from the University of York, the University of Liverpool and New Zealand’s Christchurch Hospital, estimates preventable deaths in England could reach 229,000 by 2036 without additional NHS funding.
Including the indirect effect on adult social care, that figure rises to 291,000, a toll the authors say would exceed the 137,000 excess deaths recorded in England during the peak of the COVID-19 pandemic.
Here is an extract detailing concerns from the BMJ:
Samuel Cross, Karl Claxton, and Andrew Hill argue that diversion of billions of NHS funding to pay more for new drugs under the UK-US trade deal will harm public health and result in thousands of excess deaths
Health systems worldwide are facing growing pressure from rising pharmaceutical expenditure, ageing populations, and constrained public finances. In publicly funded systems with finite budgets, higher spending in one area inevitably takes away the opportunity to spend elsewhere. This makes decisions about medicine pricing fundamentally decisions about how healthcare resources are allocated, and who the shortfall in funding affects most. This, in health economics is what is known as opportunity cost.
On 1 December 2025, the government announced the UK-US pharmaceuticals deal as a “landmark” to “safeguard medicines access and drive vital investment for UK patients and businesses.”1 The agreement, which secures a 0% tariff on UK pharmaceutical and medical device exports to the US for the next three years, formed part of broader UK-US trade and economic negotiations focused on strengthening bilateral cooperation in strategically important sectors, including life sciences and pharmaceuticals.2
However, it also committed the NHS to substantially higher expenditure on branded medicines over the coming decade through changes to drug pricing arrangements and health technology assessment. Without a corresponding increase in available NHS resources, this will create substantial opportunity costs elsewhere, having a direct effect on population health.
Effect on UK drug pricing
The National Institute for Health and Care Excellence (NICE) evaluates whether new medicines provide sufficient health benefit relative to their cost. NICE generally assesses this using quality adjusted life years (QALYs), which combine gains in survival and quality of life into a single measure. Historically, NICE has operated with cost effectiveness thresholds of around £20 000-£30 000 per QALY gained. This means that the NHS has generally been willing to pay within this range for one additional year of life in full health, although this threshold can be – and often is – breached in exceptional circumstances, such as drugs to treat cancer.3 These thresholds exist because of opportunity cost and represent an attempt to balance the health gains garnered by new medicines against the health likely to be lost elsewhere in the system when resources are displaced.
In March 2026 ministers took powers to instruct NICE to increase the thresholds they use to judge cost effectiveness.4 From April 2026, instead of paying £20 000-£30 000 for every additional QALY gained by using a new medicine, the NHS will now pay £25 000-£35 000 for the same health benefits. The agreement also changes the way health benefits are measured, meaning NICE’s assessment of the QALY benefits offered by new medicines will be higher for the same actual benefit.5
Another mechanism by which NHS drug expenditure is controlled is the voluntary scheme for branded medicines pricing, access, and growth (VPAG). This agreement between the pharmaceutical industry and the UK government is designed to limit growth in NHS expenditure on branded medicines through industry rebate payments when spending exceeds agreed targets. The rate of increase in the prices of new medicines is linked to the amount repaid to the NHS by drug companies, discouraging price inflation. In 2025 the rebate rate was 23%; under the new agreement this has been cut to 14.5%.6
These changes, alongside the government’s commitment to increase expenditure on new medicines from 0.3% to at least 0.6% of gross domestic product (GDP) in 2036 without corresponding increases in available NHS expenditure, raise serious concerns over the population health costs.7 The impact assessment undertaken by the Department of Health and Social Care (DHSC) to assess these costs has not been made public, despite requests.8 Nonetheless, it is now possible to make an accurate but conservative assessment of the additional costs of this deal to the NHS and the population cost NHS patients will face.
Estimating the financial costs of the deal
This deal commits government to increasing expenditure on new medicines from 0.3% to at least 0.6% of GDP in 2036, with interim targets for expenditure of 0.35% of GDP in 2028 and 0.4% of GDP in 2030.7 Assuming these targets are met and using the Office for Budgetary Responsibility’s (OBRs) long term forecast of real GDP growth (1.5%), 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).9Figure 1 shows the estimated additional annual costs over the 11 years of the deal. The cumulative additional cost will be £2.6bn by the end of 2028 and £44.7bn by the end of 2036. Costs are even higher if the impact on publicly funded adult social care is also considered – modelling of English local authority data indicates that every £1bn the NHS must find to fund this deal will increase the costs of adult social care by £118m because of increases in morbidity and mortality.10
Retired, living in the Scottish Borders after living most of my life in cities in England. I can now indulge my interest in all aspects of living close to nature in a wild landscape. I live on what was once the Iapetus Ocean which took millions of years to travel from the Southern Hemisphere to here in the Northern Hemisphere. That set me thinking and questioning and seeking answers.
In 1998 I co-wrote Millennium Countdown (US)/ A Business Guide to the Year 2000 (UK) see https://www.abebooks.co.uk/products/isbn/9780749427917
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