TThis is gratitude, huh? Less than two weeks have passed since the government agreed raise the prices the NHS pays for new drugs and here comes the boss of GSK, Britain's second-largest pharmaceutical firm, to extol the benefits of doing business in the US.
The US “continues to be the leading market in the world in terms of new drug and vaccine launches.” said chief executive Emma Walmsley.V BBC interviewexplaining why GSK invests about three times more there than at home. Along with China, the US is also “the best market in the world for business development.”
Her comments caused a stir, but are really just a statement of reality. It would be absurd to suggest that the UK has suddenly rocketed to the top of the life sciences competitiveness table as a result of the multilateral price and tariff agreement reached earlier this month.
Yes, the UK retains excellent research capabilities, links with universities and other soft 'ecosystem' advantages – the boast of successive governments that the UK is a 'superpower' in life sciences is not such a fantasy. But the U.S. remains ahead of the curve in terms of spending on new drugs, the depth of its research and manufacturing bases, and the funding its startups and biotech ventures can attract. That's how things are.
But as Walmsley also said, this month's deal National Health Service prices and tariffs are welcome. Critics complain that the terms represent a capitulation to big pharmaceutical companies and Trump. But what else could the government do? If she is serious about the “superpower” theme, she needs to head off the tensions that existed long before the president threatened to impose eye-watering tariffs on British pharmaceutical exports to the US.
The row over NHS prices was clearly linked to the loss of investment in the UK, such as Merck ditches £1bn London research center. One problem has been the complex 'voluntary' pricing scheme, which attempts to promote innovation while protecting the NHS budget through caps. Companies' rebate payments have been unpredictable, amounting to 23% of sales last year, well above comparable rates in other major European countries. Another issue is the price the National Institute for Health and Care Excellence (Nice) allows the NHS to spend on life-extending drugs.
The deal brought all the items together. The UK received zero tariffs on exports to the US for three years. The discount was limited to 15%. And Nice increased the lower threshold of the base price by 25%.
Consider complaints that NHS budgets are being diverted away from cutting-edge equipment and hospitals. Yes, it's certainly a risk: healthcare spending on pharmaceuticals is set to rise by £3 billion a year. But the alternative was to reduce investment in the UK, which over time could create even more pressure on budgets and even less patient access to new medicines. In a world of compromise and difficult negotiating positions, the government appears to have got it about right. The deal had to happen as has been stated here many times.
Walmsley called it “a step in the right direction,” which is positive but not a five-star review. This is probably also true. The plan is for Britain to double the share of GDP spent on new drugs to 0.6% within a decade, leaving plenty of time for renewed tensions. Meanwhile, the terms of the “voluntary” scheme after 2029 are also to be discussed.
But there are other projects on the way, such as the £600 million-funded Health Data Research Service, which aims to “increase access to NHS data for researchers” by harnessing the strength of the health service as a single system. At a time when the government's industrial strategy seems moving in slow motion in several directionsThe situation in the life sciences could be worse. It's just that the pull of the US will undoubtedly remain strong.
