Question to the Department of Health and Social Care:

To ask His Majesty's Government, in regard to the UK–US pharmaceuticals deal, by what percentage of GDP the UK will increase spending on medicines; when that increase will be in place; and whether that increase applies to both private and public sources of spending.

The United Kingdom and United States’ pharmaceutical deal included a commitment to raise spending on innovative medicines, as a proportion of gross domestic product, from approximately 0.3% to 0.35% by the end of 2028 and to 0.6% over a 10-year period. This represents approximate rises of 0.05% by 2028 and 0.3% over a 10-year period respectively, versus the starting position estimated. Further detail, including data sources, will be confirmed in due course.

As part of the US and UK trade agreement, NHS England and the National Institute for Health and Care Excellence (NICE) produced joint analysis to estimate the cost impact of implementing two potential measures into the pricing environment, specifically an increase of NICE’s standard threshold range to £25,000 to £35,000 per Quality Adjusted Life Year (QALYs), and the introduction of the EQ5D-5L value set for estimating QALYs.

NICE’s analysis estimated the expected price impacts for new medicine launches based on a retrospective analysis of previous recommendations, including assumptions around the potential for an increase in the number of positive recommendations. NHS England applied these assumptions to a generalised projection of spend on new medicines and new indications over the next three years. The analysis assumes that the profile of spend associated with medicines expected to launch in future will follow the same average growth profile as has been observed historically.

The analysis suggests that the majority of the price increase will result from the change to the cost effectiveness thresholds, but the exact contribution of each will depend on which medicines NICE recommends for National Health Service use. This is not something that we can predict at this time as it depends on which drugs come to market and which are assessed as approved for use on the NHS accordingly.