Committee publication · Correspondence · 20 July 2026
Correspondence from DHSC SoS on UK-US Phama Deal 14.07.26
Summary
Secretary of State James Murray responds to the Health and Social Care Committee's questions on the UK-US Arrangement on Pharmaceutical Pricing and Tariffs. He defends the deal as essential for patient access to innovative medicines, reports £1 billion costs over the current spending review period, rejects external analyses suggesting £9–14 billion annual costs, and highlights £1 billion in industry investment secured since announcement and nine additional medicines approved under revised NICE thresholds.
Key findings
- DHSC estimates the Arrangement will cost approximately £1 billion in England over the current Spending Review period, primarily driven by EQ-5D-5L implementation and increased NICE QALY threshold.
- Nine additional medicines have been approved by NICE under the revised cost-effectiveness threshold, including treatments for childhood brain tumours, Duchenne muscular dystrophy, and rare stomach cancer.
- UK secured commitment to 0% tariffs on pharmaceutical exports to the US for three years and MFN policy mitigations—unique among all countries negotiating with the US.
- Over £1 billion in life sciences industry investment secured since December 2025, including major commitments from AstraZeneca (£300m), UCB (£500m), and Boehringer Ingelheim (£150m).
- DHSC rejects external analyses claiming £9–14 billion annual costs, arguing they wrongly assume innovative medicine spending would remain flat without the Arrangement and fail to account for counterfactual risks of tariffs and reduced industry investment.
Government position
Accepts the Arrangement as beneficial on balance. Government defends costs (£1 billion over spending review period) against external criticism, rejects claims of £9–14 billion annual expenditure as methodologically flawed, and emphasises patient benefits (nine new medicines approved), economic gains (£1 billion industry investment, 360,000 jobs in life sciences), and the counterfactual risk of US tariffs and reduced medicine launches had negotiations failed. Commits to 0.6% of GDP spending target by 2036 and annual review with US Administration.
Tone
FactualTopics
Key actors
James Murray MP, Secretary of State for Health and Social Care, Layla Moran MP, Chair, Health and Social Care Select Committee, Minister Gill, Minister Ahmed, NICE, Life sciences sector (AstraZeneca, UCB, Boehringer Ingelheim, Accord)
Notable line
“This arrangement is fundamentally about patients, ensuring they can benefit from life-changing medicines as they are developed, rather than the UK being left behind.”
Key Quotes
“The Arrangement aims to improve patient access to innovation and ensure that UK patients get the best new medicines fast, support the life sciences sector and contribute to economic growth through additional life sciences investment in the UK.”
“Following changes to NICE's cost -effectiveness threshold in April for new medicines we have seen nine additional medicines approved for NHS patients in England and Wales that would have been unlikely to be recommended under the previous threshold.”
“… the UK is the first and only country to secure a commitment of 0% tariffs for pharmaceutical exports for three years”
“Whilst there is still uncertainty, we estimated at the time of finalisation that the Arrangement would cost approximately £1 billion in England over the current Spending Review period.”
“The external cost estimates referred to by the Committee, including figures of £9 and £14 billion a year, are not recognised by DHSC.”
“This arrangement is fundamentally about patients, ensuring they can benefit from life-changing medicines as they are developed, rather than the UK being left behind.”
“… the NHS, as a publicly funded service, benefits from the economic growth and productivity improvement that this deal has already, and will continue, to enable”
Source · parliament.uk record ↗