The UK Government is intensifying efforts to repair its fractured relationship with major pharmaceutical companies, with officials working day and night to resolve a deepening row over NHS drug pricing, science minister Patrick Vallance has said.
Addressing global investors and industry leaders at London Life Sciences Week, Vallance acknowledged the severity of the standoff that has seen several pharmaceutical giants halt or withdraw investment plans in the UK.
“We are clear-eyed about the challenges,” he said. “Recent headlines have not always been favourable, and we are acutely aware of the pressures companies face in the current commercial environment.
“Many of us across government are working day and night to make progress. We are laser focused on getting this resolved.”
The government is preparing proposals to increase the cost-effectiveness thresholds used by the NHS to evaluate new medicines a move that could raise the bar by as much as 25%.
The UK currently spends a smaller share of its GDP on new drugs compared with other major European economies.
Relations with the pharmaceutical sector deteriorated sharply in late August when negotiations collapsed after Health Secretary Wes Streeting issued an ultimatum over pricing.
In the aftermath, MSD, AstraZeneca and Eli Lilly froze or scrapped planned UK investments. Eli Lilly’s chief executive, Dave Ricks, went as far as calling the UK “probably the worst country in Europe” for drug prices.
The dispute has been further complicated by pressure from Donald Trump, who has urged pharmaceutical companies to cut prices in the US while raising them elsewhere and shifting more investment stateside under threat of 100% import tariffs.
Keir Starmer’s business adviser, Varun Chandra, has been involved in ongoing negotiations.
Despite tensions, Vallance highlighted reasons for optimism, citing Moderna’s £150m vaccine plant in Oxfordshire, BioNTech’s 10-year £1bn commitment, and Convatec’s £500m research hub in Manchester. His broader goal is for the UK to become Europe’s leading life sciences powerhouse by 2030 and rank among the world’s top three by 2035.
London mayor Sadiq Khan also announced that the capital has drawn £1.6bn in life sciences venture capital investment this year,more than Paris, Stockholm and Berlin combined crediting London’s historical and scientific strengths.
Dame Anne Glover, co-founder of Amadeus Capital, urged UK pension funds to increase investment in science startups, arguing that allocating just half a percent of pension assets to venture capital “would transform our market.”
