At the heart of the UK's pharmaceutical sector, a storm is brewing over drug prices—a debate that has now reached the highest levels of government. On September 24, 2025, Lord Patrick Vallance, the UK’s prominent science minister and former chief scientific adviser, made waves by declaring that raising the prices the National Health Service (NHS) pays for medicines is "going to be a necessary part" of stemming the tide of pharmaceutical investment leaving the country, according to BBC and other major outlets.
His remarks, delivered at the grand opening of Moderna’s new innovation and technology centre in Harwell, Oxfordshire, come after a string of high-profile withdrawals and pauses by some of the world’s pharmaceutical giants. In just the last month, Merck abandoned plans for a £1 billion facility at London’s Kings Cross, a move that directly affected around 125 jobs and was due to open in 2027. AstraZeneca, another titan of the industry, put a £200 million investment in Cambridge on hold. Both decisions have sent shockwaves through the UK’s life sciences sector, with industry insiders blaming low drug prices and insufficient government backing as key culprits.
“Where the additional money would come from to pay higher prices is a matter for the department of health and the Treasury to figure out,” Lord Vallance told the BBC, adding that these price increases are not just a matter of economics but also of patient welfare. “We must end up with a deal of some sort... because it's in the interest of the economy, it's in the interest of patients.”
Health Secretary Wes Streeting, who joined Lord Vallance at the Moderna opening, echoed the urgency of the issue. He described the ongoing talks as “a live conversation between government departments and the pharma industry on drug pricing,” noting the intersection of government ambitions for growth, health, trade, and international relations—particularly with the US. Streeting’s tone was notably more conciliatory than in previous months, when he insisted he would not let pharmaceutical companies “rip off” taxpayers and labeled the industry’s approach as “short-sighted.” Now, he acknowledges the pressing need for a solution that works for all parties involved.
The backdrop to these urgent conversations is stark. Over the past decade, UK spending on medicines has dropped from 15% of the NHS budget to just 9%. In contrast, other developed nations allocate between 14% and 20% of their healthcare spending to pharmaceuticals. According to Eli Lilly, the UK is “probably the worst country in Europe” for drug prices—a sentiment echoed by Novartis, which warned in August that NHS patients would lose access to new, cutting-edge treatments due to rising costs and that it was not considering the UK for major new investments because of "systemic barriers."
These criticisms have not gone unnoticed. Lord Vallance, drawing on his experience as a former president of research and development at GSK, highlighted the global context: “The Trump factor is a large driver in the issue,” he said, pointing out that drug prices in the US are “very much higher than anywhere else in the world.” He noted that the UK represents “something like 2% or less of the profit of companies globally,” underscoring the challenge Britain faces in competing for pharmaceutical investment.
Indeed, US President Donald Trump has been vocal about bringing pharmaceutical firms back to American soil. During a recent state visit to the UK, Trump told reporters, “Car companies are moving in, AI is moving in, everybody’s coming in… The drug companies are coming back, they all want to be there—they sort of have to be there—but they all want to be there.” This push is reflected in British pharmaceutical giant GSK’s announcement of nearly £22 billion in planned US research and development and manufacturing investments over the next five years—a move the UK government claims will “strengthen UK-US life sciences ties,” but also one that highlights the competitive pressures Britain faces.
Amid these challenges, there are glimmers of hope. Moderna’s new Oxfordshire facility, officially opened this week, marks a major milestone for the UK. The Moderna Innovation and Technology Centre at the Harwell Science and Innovation Campus is the nation’s first onshore mRNA jab manufacturing site. It’s poised to produce up to 100 million vaccine doses a year, with the capacity to scale up to 250 million in the event of a pandemic. Not only will it bolster the UK’s pandemic resilience, but it will also create around 150 highly skilled jobs and enable groundbreaking research on mRNA vaccine technology for cancer and seasonal infections—pending regulatory approval.
Health Secretary Streeting hailed the Moderna centre as “the next pivotal moment in boosting our nation’s health, innovation and economy.” According to government figures, Moderna is investing more than £1 billion in UK research and development as part of a 10-year partnership to create new treatments and jobs. This stands in sharp contrast to the recent withdrawals by Merck and AstraZeneca, as well as Novartis’s decision to look elsewhere for major new projects.
Yet, the sense of urgency remains. Lord Vallance emphasized that "day by day" discussions are happening with both the industry and the US to find a solution that works for innovation, attracts companies to the UK, and, most importantly, benefits patients in the NHS. “I’ve got no doubt we’ll come to some arrangement which gets to the right position on this, because we have to—I think price increases are going to be a necessary part of what we need to do to get to a solution which will benefit patients.”
But there’s still plenty of work to be done. Talks between the UK government and pharmaceutical firms broke down last month over the cost of medicines, despite what ministers described as a “generous and unprecedented offer to accelerate growth” in the sector. The government, for its part, insists it remains committed to striking a deal that is fair and equitable, ensuring rapid access to the best medicines for NHS patients while supporting the economic ambitions of the country.
For now, the UK finds itself at a crossroads. The decisions made in the coming months—about how much the NHS should pay for medicines, how to attract and retain global pharmaceutical investment, and how to balance the needs of patients with the realities of a competitive international market—will shape the future of British healthcare and innovation for years to come.
As the dust settles from these recent announcements, one thing is clear: the conversation about drug pricing in the UK is far from over, and its outcome will have consequences not just for the NHS and the pharmaceutical industry, but for every patient relying on the next breakthrough treatment.
