NHS drug pricing row Streeting clashes with pharmaceutical firms over costs and investment opportunities

Wes Streeting, the new health secretary, has escalated his confrontation with leading pharmaceutical firms over the soaring cost of medicines and its impact on the UK’s broader life sciences sector. After talks with the Association of the British Pharmaceutical Industry (ABPI) collapsed on Friday, Streeting accused the sector of undermining crucial partnerships by rejecting a revised government proposal to cap industry revenues over the next three years.

The dispute revolves around a voluntary scheme, designed to prevent unsustainable rises in NHS costs, which limits spending on branded medicines. Under this arrangement, pharmaceutical companies must repay any revenues exceeding the cap. Initially, the government had forecast a 15 percent rebate rate for 2025, yet unexpectedly high NHS expenditure now leaves firms facing a 23 percent rate. In response, Streeting tabled amendments that would have reduced sector liabilities by roughly one billion pounds over three years; ABPI countered that this figure paled compared to the 13.5 billion pounds in expected repayments, warning of severe consequences for research, jobs and future investment in the UK.

Streeting denounced what he labelled as “shortsightedness” from the industry and vowed to protect both patients and taxpayers from excessive pricing. He reiterated the government’s commitment to fostering collaboration and maintaining the UK’s reputation as a global life sciences leader, even as concerns mount over the risk of companies moving clinical trials and manufacturing elsewhere.

Industry representatives, including senior executives from AstraZeneca and Novartis, voiced apprehension about the UK’s appeal as a base for further R&D and innovation, citing the high rebates. They also raised questions about the approach of the National Institute for Clinical Excellence (NICE), which assesses drugs on cost-effectiveness at a threshold of £20,000 to £30,000 per quality-adjusted life year. Pharmaceutical leaders argue that recent inflation and escalating drug development expenses necessitate a rethink of these limits, noting Gilead Sciences’ decision not to submit a new breast cancer treatment for NICE evaluation due to commercial viability concerns.

Streeting maintained that NICE’s processes remain both robust and equitable, balancing innovation and value for money. The ongoing standoff now casts a shadow over the government’s plans to position the UK as a premier hub for medical technology and drive future NHS transformation, just weeks after it placed life sciences at the heart of its industrial growth priorities.