April 17th 2026

By Ailsa Colquhoun

Think tank forecasts NHS trade offs for higher price drugs

“As spending on drugs increases, resources will have to be reallocated from other areas vital to delivering the 10-Year Health Plan,” the Nuffield Trust has concluded in light of the US-UK drug-pricing agreement.

In the deal,  the UK has agreed to make it easier for new branded medicines to be approved at higher prices and harder for the NHS to claw back the costs. The deal has three elements:

• A higher cost-effectiveness threshold per quality-adjusted life year (QALY), increasing the value to the NHS of higher price drugs. This means prices for new medicines are likely to increase
• A cap of 15 per cent on the clawback rate placed on branded medicines suppliers under cost control measures implemented under the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG)
• Increased Government spend on branded pharmaceuticals as a share of GDP, from 0.3% to 0.6% by 2035.

The government has said that the costs of the drug-pricing deal (estimated at £1bn through 2028/29) will be covered by DHSC, with front-line services remaining protected.

However, in the article, Nuffield Senior Economist Eric Yang said: “Given worsening funding pressures from higher demand and demographic changes, the NHS can ill afford to sacrifice resources for a higher drugs bill in the short term. Spending the NHS budget has always involved making difficult trade-offs, but the UK-US drug-pricing deal means trade-offs will now be even more difficult in the future.”