Trump’s pharma price hike

What the Government is doing, and why we’re opposing it

The government has agreed to a major increase in the amount the NHS pays for drugs and medicines after Donald Trump threatened them with tariffs.

Spending on drugs will increase from 9.5% of the NHS budget to at least 12%, and will double as a share of GDP. The cost is set to be between £3-£6bn. This means that money which could go on frontline services will be diverted to pharmaceutical giants in an effort to appease the White House. 

The decision has been made without any parliamentary scrutiny, and with little pretence of being part of any overall strategy for the NHS or UK drugs industry. 

Why is the government doing this?

This is an act of surrender to Donald Trump which has taken place because the government is frightened of new tariffs. In the words of Trump’s Health Secretary, RFK Jr, “Donald Trump demanded these reforms… [and it] puts Americans first”. As experts at the Nuffield Trust have spelt out, defunding frontline services to spend more on drugs is damaging for patients, and there is scant evidence that this agreement will improve the level of research taking place in the UK.

The government failed to even publish what it estimated the impact of a price rise would be on the economy or the NHS.

Why are the Liberal Democrats opposing this?

Decisions over how to spend money in our NHS should be set by the British people, not by a foreign regime. The government is doing nothing to strengthen our hand against Trump or to prevent him coming back for more.

It is outrageous that £3bn - the equivalent of the entire maternity budget, is being plundered, because our government refuses to stand up to the bully in the White House. It is particularly unacceptable that they are doing so while our NHS breaks apart at the seams - with record GP waits, overwhelmed A&Es and missed cancer treatment targets. 

Hiking medicine costs is the wrong approach for patients - who badly need investment in frontline staff, hospitals and equipment. This has been confirmed by health experts, economic studies and by the experience of people working in our NHS. 

We also know this kneejerk concession to Trump isn’t the right approach for our life sciences sector. It has been confirmed by numerous economic studies that, in a globalised market place, the price the NHS pays for branded drugs has little bearing on where companies conduct research and develop medicines. Access to talent and regulatory hurdles make a far bigger difference, but the government is doing little to address these challenges.

What would we do instead

We would do three things: 

1. Show Britain won’t be bullied and cancel this price hike, freeing up billions of pounds. We would target this money where our health service really needs it, like ending the crisis in GP services so everyone has a right to see a GP in seven days, guaranteeing 100% of patients are treated for cancer within 62 days, fixing crumbling hospitals and ending unacceptable, degrading corridor care and 12 hour waits in A&E.
2. Urgently negotiate a new customs union with the EU - the world’s largest trading bloc - so that we are less vulnerable to the threats of Trump and his tariffs, and to make it easier to conduct research here.
3.  Strengthen life sciences properly with a comprehensive strategy that increases investment in research by billions of pounds, cuts the costs of hiring global talent and tears up Brexit red tape. 

We have a real plan to strengthen the life sciences

• A new Customs Union with the EU which would scrap restrictive red tape and cut the costs of clinical trials (the cost of developing some cancer drugs have quadrupled since Brexit) due to the impact on supply chains and cross border cooperation. It would also protect us from the threat of Trump’s tariffs.
• We’d reverse the costly National Insurance hike, which has made it more expensive to hire the researchers and other staff that are needed in the sector. 
• We would remove barriers preventing global research talent from coming to the UK by replacing the Conservatives' failed arbitrary salary threshold with a flexible, merit-based system for work visas and reducing ‘Global Talent’ visa fees. Currently a global talent visa for a leading scientist costs £6,000 in the UK. The average of other leading science nations is just £350. 
• We would commit to a decade-long programme of public investment in research and development, with a clear target to raise R&D spending to 3.5% of GDP by 2034.
• ⁠Liberal Democrats would also reform the UK Research and Innovation and the British Business Bank to deliver funding that supports the public good, particularly in areas like health and life sciences.