NHS patients in the United Kingdom are facing the prospect of losing access to some of the world’s most advanced medical treatments, as the pharmaceutical giant Novartis sounded a stark warning about the impact of rising costs and stalled negotiations over drug pricing. The warning, delivered on August 27, 2025, comes after talks between Health Secretary Wes Streeting and major pharmaceutical firms collapsed, leaving the future of new medicines in limbo for thousands of patients.
According to BBC, Novartis claims that the UK’s methods for assessing whether new drugs are worth funding through the National Health Service (NHS) are outdated, making it increasingly difficult for innovative treatments to be approved and launched. Johan Kahlstrom, Novartis’s UK and Ireland managing director, minced no words in describing the situation: the UK, he said, is now “largely uninvestable” for the company. “The UK remains an outlier and patients still lose out and I think we have to be honest about that,” Kahlstrom told the BBC’s Today programme.
The roots of this crisis stretch back to a 2023 agreement in which pharmaceutical companies consented to pay the UK government 15% of their income from sales to the NHS above a certain threshold—a so-called “clawback tax” designed to keep the health service’s costs from spiraling. But the rebate rate has since soared to 23.5%, a figure Novartis says is more than triple the 7% rate in Germany. The company, which employs 78,000 people globally, says this steep increase has made the UK market unattractive for investment in manufacturing, research, or advanced technology.
“Costs meant the UK was largely uninvestable,” Kahlstrom said, emphasizing that Novartis is not considering the country for major new investments. The company has already been unable to launch several medicines in the UK for public reimbursement—drugs that are, or soon will be, available to patients in other European countries. Novartis warned that if the environment remains uncompetitive, “future launches and research investment could be further deprioritised for the UK.”
This is not just a theoretical concern. The Sunday Times recently reported that Gilead Sciences, another major pharmaceutical firm, decided not to submit its breast cancer drug for assessment by the National Institute for Health and Care Excellence (NICE), blaming the UK for “undervaluing medicines.” The implications are clear: patients in the UK may miss out on life-saving or life-extending therapies that are accessible elsewhere in Europe.
The government, for its part, insists it has made a “generous and unprecedented offer to accelerate growth” in the pharmaceutical sector. According to an official statement, the proposed deal would have reduced payment rates for pharmaceutical companies year-on-year, freeing up approximately £1 billion over three years for new, life-changing medicines. “The pharmaceuticals industry signed up to the deal with the previous government,” Health Secretary Wes Streeting told The Guardian. “When it came out more expensive to industry than expected, we put forward an unprecedented offer to bring down payment rates for all future years of the scheme and accelerate growth in the sector—but the ABPI (Association of the British Pharmaceutical Industry) failed to reach an agreement.”
Streeting has also vowed not to allow companies to “rip off” taxpayers, accusing some drug firms of being “short-sighted” in their approach to the negotiations. The government’s position is that the clawback mechanism is necessary to keep NHS costs under control, especially as demand for new and innovative medicines continues to rise.
Yet from the industry’s perspective, the UK’s drug approval process is part of the problem. The body responsible for deciding whether a new medicine is cost-effective, NICE, uses a measure called the “quality-adjusted life year” (QALY) to assess value. Medicines costing between £20,000 and £30,000 per QALY are considered good value for money. However, Novartis argues that these thresholds have not changed since 1999 and have failed to keep pace with inflation. The company estimates that the real threshold should now be closer to £50,000 per QALY.
Richard Torbett, chief executive of the ABPI, echoed these concerns in a statement, saying, “The demand for innovative medicines has continued to grow but investment in new treatments is falling due to uncompetitive and punitive rebates on company revenues.” He added, “The UK’s assessment methods for new drugs have not changed for nearly a quarter of a century. Without change, the UK will continue to fall down international league tables for research, investment, and patient access to medicines.” Torbett also emphasized that the industry still believes a solution to the row is possible.
The numbers paint a stark picture of the UK’s position. Only 9% of the NHS healthcare budget is spent on drugs, compared to about 14% in France and 15% in Germany. This underinvestment, according to Novartis and other pharmaceutical companies, is a significant factor in the UK’s declining competitiveness and its inability to attract new investment.
This isn’t just a business story—it’s about real patients. The inability to launch new medicines in the UK means that people with serious illnesses could be missing out on treatments that are readily available elsewhere. For those with conditions like cancer, rare diseases, or chronic illnesses, access to the latest therapies can be a matter of life and death. As Novartis pointed out, “patients were losing access to or missing out entirely on new treatments as a result of the current situation.”
The debate over drug pricing and access is not unique to the UK, but the country’s situation is becoming increasingly precarious. The combination of high rebate rates, outdated assessment thresholds, and a relatively low proportion of spending on medicines is driving a wedge between the government and the industry. Both sides agree on the importance of giving patients access to the best possible treatments, but they remain at odds over how to achieve that goal without bankrupting the health service or driving away investment.
As the standoff continues, patients and clinicians alike are left in a state of uncertainty. Will the UK find a way to update its drug assessment processes and make itself more attractive to pharmaceutical investors? Or will more companies follow Novartis and Gilead in deprioritizing the UK, leaving patients with fewer options? The coming months could prove decisive for the future of medical innovation and access in the NHS.
For now, the message from the pharmaceutical industry is clear: unless the UK reforms its approach, it risks falling further behind its European neighbors—not just in research and investment, but in the health and well-being of its people.
