US ambassador to the UK Warren Stephens has warned that the American pharmaceutical giants will leave Britain if the Keir Starmer government fails to pay more for their drugs.
At a business gathering in London, attended by British trade and foreign ministers, he said the UK should urgently fix its pricing structures to make it more competitive.
Unless this is done, pharma businesses would cancel future investments and even shut down their facilities in the UK, he added.
“This would be a major blow to a country that prides itself, rightly so, on its life sciences sector,” Stephens said.
UK-based AstraZeneca and US pharma giants Eli Lilly and Merck and other big pharmaceutical firms have either scrapped or paused nearly £2 billion in planned UK investments so far this year.
The UK is locked in drug-pricing negotiations with the Trump administration and pharmaceutical firms about how much the National Health Service pays for their products through Voluntary Scheme for Pricing, Access and Growth (VPAG) scheme.
Talks over reforming the scheme between the Association of the British Pharmaceutical Industry (ABPI) and the health department had ended in August after health secretary Wes Streeting gave an ultimatum to accept the government’s proposal.
But following the unprecedented industry backlash, science minister Lord Vallance told MPs in September that Britain needed to increase its spending on NHS medicines.
Britain has offered to increase the threshold at which the NHS pays firms for medicines by up to 25 percent.
Pricing talks feature in the UK’s ongoing trade negotiations with Washington after Starmer struck a framework trade deal with Trump in May.
