On 1 December 2025, the United States of America and the United Kingdom announced an agreement on pharmaceuticals, with the UK promising its national health services (NHS) would accept higher prices and spending on branded medicines in exchange for zero tariffs on exports [1].
Key elements
The health technology assessment body for England and Wales, the National Institute for Health and Care Excellence (NICE) will raise its standard threshold for cost per incremental quality-adjusted life year from £20,000–£30,000 to £25,000–£35,000. Full details of this commitment are yet to emerge. NICE recommendations are often also transferred to Northern Ireland: Scotland has a separate body, the Scottish Medicines Consortium.
The agreement also commits that the primary UK-wide scheme for controlling NHS spending growth on branded medicines, the Voluntary Scheme for Branded Medicines Pricing, Access and Growth, will not require rebates greater than 15% between 2026 and its conclusion at the end of 2028 [2]. Under this scheme, participating pharmaceutical companies have to pay money back to the Department of Health and Social Care if their sales growth of eligible drugs exceeds an agreed-upon rate.
The UK’s representative body for the branded pharmaceutical industry also stated that the UK had committed to increase investment in new medicines from around 0.3% of GDP to 0.6% of GDP in stages over a decade, though this was not mentioned by either government [3].
The US has undertaken to place zero tariffs on UK-origin pharmaceuticals, pharmaceutical ingredients and medical technology exported to the USA for a three-year period.
Implications and reception
The agreement was praised by the pharmaceutical industry, which claimed that it would encourage investment in research and production [4]. Representative bodies for healthcare in the UK as well as the main academic units for health economics, both expressed concern that it represented a significant diversion of funding towards medicines with lower cost-effectiveness than most existing NHS care, shifting spending away from the most efficient use for health outcomes [5, 6].
There is no additional funding to cover spending under the agreement, and the UK government has not published any estimates of cost.