The UK-US pharmaceuticals deal could cost the National Health Service (NHS) around £45bn ($60bn) within a decade and divert resources away from essential services, an analysis has suggested.
The UK and US governments struck a “landmark” agreement in December 2025, which saw the former country secure zero tariffs on pharmaceutical products, along with committing to spend more on new NHS drugs. UK ministers, including science and technology secretary, Liz Kendall, lauded the deal at the time.
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However, forecasts by a doctor’s union suggest that the deal could in fact do more long-term harm than good. In a research article published in the British Medical Journal (BMJ), the government’s pledge to increase expenditure on new medicines from 0.3% to at least 0.6% of GDP in 2036 raises questions about how well resources are being spent.
According to the researchers, the cumulative additional cost will be £2.6bn by the end of 2028 and £44.7bn by the end of 2036. This, they add, has knock-on effects on population costs, which are excess deaths that could be avoided if resources are not directed to paying more for new medicines. By 2036, the paper suggests, the deal is likely to result in roughly 229,000 excess deaths. The largest estimated impacts on deaths would be across cardiovascular, respiratory and gastrointestinal disease and cancer, according to the analysis.
Ministers at the time claimed that the deal would improve access to new medicines, but the BMJ article authors suggest that the opportunity cost of new medicines at prior thresholds is already being felt.
Industry appeasement
It is likely the UK hastened to secure a deal with the US due to the threat of tariffs. However, levy rates across other countries have been slashed by the US, meaning many agreements now sit only 10% more than the UK’s zero.
“The UK remains a net importer of medicines, meaning that much of the additional expenditure is likely to accrue to multinational manufacturers rather than remain within the NHS or wider UK economy,” the authors wrote.
Overall, the UK life sciences industry is one in jeopardy. A report by the Association of the British Pharmaceutical Industry (ABPI) claims that the UK is at risk of losing its world-leading science status. Life sciences foreign direct investment into the UK fell by 58% from £1.9bn in 2021 to £795m in 2023.
AstraZeneca considered moving its listing from London to New York because of concerns about the international competitiveness of the UK life sciences sector. Meanwhile, MSD cancelled a £1bn expansion of its R&D headquarters in London last year. Combined with comments from Bristol Myers Squibb (BMS) about injecting money into the UK as a direct result of the deal, there is a belief in the industry that the agreement was struck in part to ease tensions from multinational drugmakers.
At the time of the deal, ABPI’s chief executive Richard Torbett said: “[The deal] should also put the UK in a stronger position to attract and retain global life science investment and advanced medicinal research.”
The BMJ analysis questions this prediction, however.
The authors commented: “Pharmaceutical research and development operate within a global market, of which the UK represents a relatively small share. As such, there is limited evidence that UK domestic pricing materially influences global investment decisions.”
