Britain’s plan to raise NHS drug prices won’t bring back Lilly’s investment

LONDON — The American drugmaker Eli Lilly wants to see more changes to Britain’s medicine market before it pivots on its abandoned £279 million investment in a biotech incubator project.

The U.K. government has drawn up proposals to increase the amount the state-funded National Health Service is allowed to pay pharmaceutical firms for drugs after intense discussions with officials from Donald Trump’s administration.

The U.S. president has demanded lower drug prices for Americans, and suggested other developed countries should pay more. The British plans under consideration could increase the threshold at which the NHS pays firms for medicines by up to 25 percent.

But for the U.S. pharmaceutical company — which shelved its planned facility meant to support early-stage life sciences businesses with lab space, mentorship and potential financial backing — the proposal alone is not enough.

“I don’t think we have heard enough to say that we are willing to get the Lilly Gateway Lab started,” Patrik Jonsson, president of Lilly’s international business, which covers all markets outside the U.S., told POLITICO.

“I think once we see the right signs from the U.K. government, we’re more than happy to restart those discussions, and we could move quite quickly,” Jonsson said. However, “we need to see some significant and sustainable change here.”

The comments will be a blow to British negotiators, who are in advanced talks to agree their drug-pricing deal with the U.S. administration as part of wider trade negotiations. Officials are hoping to wrap up the pharma talks ahead of the U.K.’s budget in late November.

Ministers last week granted a two-week extension to the deadline by which pharma firms must tell the government if they intend to leave the NHS’s voluntary drug pricing scheme.

If Washington and London strike a deal — effectively committing the NHS to higher drug spending — Chancellor Rachel Reeves will face pressure to spell out how much the increase will cost taxpayers.

‘We need the right conditions’

Drugmakers have long called for changes to the U.K.’s tightly-controlled drug prices.

Britain limits the annual cost for a year of good-quality life (QALY) for a patient at £30,000 for most drugs. Industry also pays an annual rebate to the NHS at 23 percent of their U.K. sales.

These measures have contained the medicine bill for the U.K.’s publicly-funded health care system.

While Jonsson acknowledged the U.K. is “well positioned to be a source of innovation” thanks to a “small but really impressive group of scientists,” he said the country needs to demonstrate sustained changes.

The British plans under consideration could increase the threshold at which the NHS pays firms for medicines by up to 25 percent. | Anna Barclay/Getty Images

“At the end of the day if you want us to research, develop and produce medicines in your country you need to put the right conditions in place so that your citizens can get access to those patients at least who need it most,” Jonsson said.

An editorial in the Lancet medical journal last week said “the argument that paying more for medicines leads to more innovation is unfounded.”

“If the U.K. Government wants to attract pharma investment, it should follow the evidence. Rather than handing over more money for medicines, it should invest in creating fertile conditions for attracting world-leading scientists, boosting public infrastructure for research and development, and facilitating clinical trials,” the article states.

“Although the tangible outcomes of applied research might appeal to politicians, investing massively in a second-to-none basic science sector will allow scientific innovation to flourish.”

Jonsson was speaking to POLITICO as the company announced a €2.6 billion new manufacturing facility in the Netherlands to produce oral medicines, including its first GLP-1 weight-loss pill.

A Department of Health and Social Care spokesperson said: “We will always prioritise the needs of NHS patients. Investment in patient access to innovative medicines is critical to our NHS.

“We are now in advanced discussions with the US Administration to secure the best outcome for the UK, reflecting our strong relationship and the opportunities from close partnership with our pharmaceutical industry,” the spokesperson added.