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UK-US Pharmaceuticals Agreement: MFN mitigations, higher NICE cost-effectiveness thresholds, VPAG rebate cap and increased NHS medicines spend - pricing, reimbursement and trade implications to 2028

Published on: 19 December 2025

Published by a LexisNexis Life Sciences expert
Legal News
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Article summary

Deal headlines

  • Zero tariffs on UK pharmaceutical exports to the US will continue until 2028
  • The UK reports it has secured ‘mitigations’ under the US ‘Most Favoured Nation’ (MFN) drug pricing initiative, though what these entail remains unclear
  • Plans are underway to raise the thresholds used by the National Institute for Health and Care Excellence (NICE) to assess whether new medicines are cost-effective for NHS use by 17%–25%. In principle, this should lead to more favourable reimbursement outcomes in the UK at prices that better reflect the substantial R&D investment required to bring novel therapies to market
  • The agreement also introduces, for 2026 to 2028, a 15% cap under the ‘VPAG’ scheme on rebates payable by pharmaceutical firms to the UK government on net NHS sales of newer medicines
  • Over the next decade, the UK government will lift its spending on new medicines from 0.3% to 0.6% of GDP

We set out below how these developments could influence the UK pricing environment for innovator medicines...

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