Amid mounting pressure on U.K. officials relating to the pharma industry, the government is reportedly preparing its defense against potential U.S. pharma tariffs by drafting plans to increase the amount the National Health Service (NHS) pays for drugs.
U.K. officials recently briefed President Donald Trump’s administration on the new proposals and plan to relay them to U.K. drugmakers later this week, Politico reported Wednesday, citing two “industry figures.” According to the report, the plan hinges on raising the National Institute for Health and Care Excellence (NICE) cost-effectiveness threshold for medicines by 25%.
The NICE threshold is used to determine whether a drug offers good value for the NHS’s money by balancing costs with the quality-adjusted life years (QALYs) a treatment offers. NICE’s current price-effectiveness range considers medicines that cost between £20,000 and £30,000 per additional QALY to provide good value.
Proposals to increase the threshold—and therefore require the NHS to pay more for drugs—have sparked debate over the years. Now, the topic has been pushed back into the spotlight as major drugmakers pull back their U.K. investments and criticize the business environment there. Last month, U.S. pharma giant Merck & Co. cited the U.K.'s “lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines" for its decision to move its R&D operations out of the country.
According to the Association of the British Pharmaceutical Industry (ABPI), NICE’s baseline threshold has been unchanged for over 20 years, despite rising inflation. The trade group, an outspoken critic of the U.K.’s drug pricing framework, called for a threshold increase “as soon as possible” in an Oct. 7 press release, criticizing a system that “undervalues medicines, deters investment, and denies some patients access to innovations.”
That perspective isn't universally shared, though. Dan Howdon, Ph.D., an associate professor of health economics at the University of Leeds, believes the threshold is already "too high" and that increasing it wouldn't “improve population health."
"Any move to increase the threshold would be motivated by twin pressures that are geopolitical and from the pharmaceutical industry," he said in a statement.
Trump has threatened 100% tariffs on imported branded medicines, offering an exception for companies that are currently building U.S.-based manufacturing plants. Meanwhile, his “most favored nation” (MFN) pricing policy looks to tie U.S. drug prices to those in other countries. In response, some companies may follow the lead of Bristol Myers Squibb, which has already pledged to offer its schizophrenia treatment Cobenfy in the U.K. for the same price it does in the U.S.