The New Pharmaceutical Trade Deal

At the beginning of December 25 the new pharmaceuticals trade agreement between the UK and the US was confirmed. This is part of the larger Economic Prosperity Deal (EPD) agreed by the US and UK back in May which sought to develop and secure the best industry outcomes between the two countries, with a view to cementing the UK as a life science leader.

It is anticipated the new pharmaceuticals agreement will encourage economic growth and drive vital investment into reinforcing the UK’s position as a life sciences superpower. Not only this but it’s hoped that it will secure thousands of jobs in the UK.

Additionally, the UK has also now become the only country in the world to secure a zero percent tariff on pharmaceuticals exported to the US – this will protect UK-based manufacturing and fortifying our place as a world leader for life sciences investment

For prostate cancer patients, a big part of the trade agreement affects how the National Institute for Health and Care Excellence (NICE) approves treatments. The government will now invest up to 25% more into innovative, safe and effective treatments.

This new 25% increase in medicine spend will lead to two changes in how NICE evaluates medicines:

1. NICE will be revising their cost-effectiveness thresholds by April 26. Currently, NICE assesses value for money using a range of £20,000 to £30,000 per quality-adjusted life year (QALY), meaning medicines should provide an extra year of perfect health for no more than that amount over current treatments. It is now agreed that thresholds will shift to £25,000 to £35,000 per QALY.

2. Similarly, NICE will introduce a new value set for judging health states - NICE will introduce the  a new value set  following consultation next year. This will be used alongside EQ-5D-5L and will also likely to impact the cost-effectiveness of medicines.

With these changes, NICE will now be able to approve more medicines that offer significant health benefits, such as breakthrough cancer treatments, therapies for rare diseases, and innovative approaches to conditions that have long been difficult to treat.

For current medicines going through NICE these changes will not be applied retrospectively and, where evaluations are already underway, these will continue through the normal process. If the independent committees decide a treatment is not cost effective using the current thresholds and applying the new thresholds may change that decision, then the topic will be paused until NICE has the power to apply the new thresholds.

The Charity Medicines Access Coalition have put together a statement here: https://www.cmacuk.org/cmac-statement-uk-us-trade-deal/

In addition, there will be a cap on the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) rebate rate that pharmaceutical companies are subject to, meaning they will not repay more than 15% of profits on medicines under the scheme down from 22.9 per cent in 2025. The payment rates for older branded medicines will remain unchanged in 2026, with companies continuing to pay between 10% and 35% on their sales of each older medicine to the NHS, depending on the levels of price discount already offered to the NHS.

While these changes appear positive and may facilitate the approval of more treatments annually, the government has stated that the NHS in England will not get extra funding to support this increased expenditure. Instead, the necessary funds will need to be identified during the 2025 spending review. An increase in medicines spending within the existing NHS budgets could threaten the quality of patient services and might lead to tough choices, including cuts to other healthcare areas.