Department of Health and Social Care

Layla Moran Excerpts

Tuesday 30th June 2026 Commons Chamber

[Layla Moran (Oxford West and Abingdon) (LD)]

I thank the Backbench Business Committee for granting this debate on the NHS estimates and, in particular, the impact of the UK-US pharmaceutical deal.

Let me start by briefly talking about the estimates themselves. I am sure that every Member has a copy of them; I have one every year. Given that we spend £211 billion on the NHS, it is rather extraordinary that £201 billion of that is simply two lines in this document. Last year, I made a request of the Department of Health and Social Care, in the light of the deal, that we get not just a better breakdown of the costs of the deal, but, more importantly, the ability to scrutinise the estimates.

The Treasury’s own guidance says that the information in the estimates should be “informative” to readers. We can all read it, but—goodness me!—it tells us absolutely nothing. My request of the Department again, and much more publicly, is to sort this issue out. Other Departments do this much better, so there is no reason why we cannot. The information exists; it is a question of putting it correctly in a spreadsheet.

Today, I hope that we will discuss the pharmaceutical deal. I have to admit that I had seen stuff about the deal, but it was not until a whistleblower came to my surgery that I really began to understand the implications of it. They said:

“I am a doctor, a public health specialist, and a NICE employee. I am deeply concerned by the plan to change the NICE cost-effectiveness threshold. I continue to believe that the NHS would be better off if ministers decide to scrap their original plan to spend more on new, less good value medicines, and used the money instead to provide basic things that we already know are good value, but don’t manage to provide adequately.”

Let us start by explaining what this deal does. It is worth mentioning that it is not a free trade agreement. That is quite important, because we will not get the normal mechanisms of scrutiny. This is one of the only ways that we can scrutinise it. We certainly do not get a proper vote on it. Different Committees of this House have raised that as a key point, so I am delighted that we are able to discuss it.

The deal agrees with the USA that there will be no tariffs on UK pharma exports until January 2029, and we have agreed a series of measures in return. The most important of those, which was raised by my whistleblower, is the changes to the National Institute for Health and Care Excellence thresholds. We must remember that NICE was set up as an independent body of Government to make health economics assessments for treatment and medicines, to maximise value for money. I do not need to remind the Minister that providing value for money for the taxpayer is in the NHS constitution.

The Government gave themselves powers to direct NICE on cost-effectiveness thresholds, raising them from £20,000 to £30,000 up to £25,000 to £35,000 for each quality-adjusted life year. In plain speech, that is basically the amount of money that we would spend on a medicine to increase people’s good life expectancy by one year.

Historically, the NHS has had a very good deal on medicines. That is in part because of where the QALY is set; in fact, research has been done that suggests that we could have put the figure even lower. It is not a budget, and does not have to increase with inflation. Some have made that case, and I will come back to that point in a moment.

The second part of my speech relates to changes to the rebate mechanism. There is a voluntary agreement between the British pharmaceutical industry companies, and the NHS caps the amount that it spends on branded medicines. If the NHS spends more, it claws back some of the money from those companies. Under the deal, the UK Government are limiting that to 15%, which is down from 22.9%. Let us put those two things together: we have the NHS paying more for medicines, and receiving less back through rebates.

There is an agreement in the deal that the UK will increase support for life sciences and spending on new medicines from 0.3% of GDP to 0.6% of GDP by 2036. That is an increase of spending on medicines, particularly, from 10% to 12% of the NHS budget.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

The hon. Member is making an excellent speech, and is trying to draw out the details of this deal; I am glad that one of her constituents drew her attention to it. I was lobbied by Karl Claxton at the University of York, who described this deal as an existential threat to the NHS because of the potential costs. Interestingly, the Department has not yet published its impact assessment on the deal. Does she agree that it is high time that the Department published the impact assessment and let us know the true cost of the deal?

[Layla Moran]

I believe that by the end of my speech, the hon. Gentleman and I will be in violent agreement, if we are not already. There is one more aspect of this, incidentally: the supply chains deal, which I understand is being crafted. We do not have time to go into that.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady on the speech she is making. It is really important that we talk about the disadvantages of this deal, and there is a clear disadvantage to Northern Ireland. Access to everyday medicines in rural communities in Strangford and across Northern Ireland will be inhibited, so does the hon. Lady agree that the Northern Ireland Assembly in particular should receive the resources necessary to deliver vital frontline service improvements? At this moment, it is not receiving those resources.

[Layla Moran]

That is a really good point. I will come back to generics, which make up nine in 10 of the medicines that the NHS uses. There is also an issue of devolution here, which I am sure other Members will cover. At the moment it is very complex, and it is not at all clear how the deal will apply in Scotland and Northern Ireland in particular.

We cannot divorce this deal from the geopolitics. It is only happening because Trump decided that he wanted to slap tariffs on every country in the world and on a number of different sectors. The reason why the US came after the NHS is that historically, we get an incredibly good deal, but we have to admit—this is why this debate is so important—that we are using the NHS and NICE in geopolitical negotiations to appease the current President of the United States. Although Trump probably wants to be President for much longer than he will be, his term will come to an end, but the effects of this deal will last much longer than the period of time he might be in office, and the amounts of money involved are eye-watering. I wish we had more information in the estimates, but everyone knows the pressure the NHS is under.

[Sir Ashley Fox (Bridgwater) (Con)]

Does the hon. Lady agree that the Government’s failure to publish the impact assessment means that NHS authorities across the country do not know how much this deal will cost them? My constituents in Somerset cannot get a GP appointment or see an NHS dentist. That is far more important to them than this obscure deal.

[Layla Moran]

The hon. Gentleman is absolutely right, and that lack of transparency is the nub of my speech today.

There are some potential positives in the deal. At the 10 February sitting of the Business and Trade Committee, a representative of the Association of the British Pharmaceutical Industry said that zero tariffs and commitments to the pharmaceutical market in the UK were “welcome” and had been “sought for some time”. The Government’s press release points out that patients will get access to innovative new medicines—who does not want that? Of course we all want that, especially those who have incurable cancers and so on, but there is a trade-off. We all want to bolster innovation in the UK. I have an interest—I am the MP for Oxford West and Abingdon. We are the other side of the Oxford-Cambridge growth arc. Biomedical sciences are going to drive my local economy, so I absolutely want that to happen, but there are also some important criticisms of this deal.

First, Medicines UK, which represents a large number of pharmaceutical companies based here in the UK, has real concerns. The life sciences sector plan has stalled, and Medicines UK points out that even though the companies it represents supply nine out of 10 medicines to the NHS, those companies are basically not recipients of what is good in this deal. Mark Samuels, its chief executive officer, has also pointed out that while there may be new investment in this country, particularly in R&D, if we want to create jobs and strengthen the economy, we must also address the inadequate support for the production of goods in the UK. That is where long-term value is created, and it is where the UK misses out compared with other countries. I point colleagues to Denmark, for example, which has had extraordinary success in its economy because it not only invests in R&D, but ensures that a proportion of the manufacturing happens in Denmark. That is what drives economic growth.

I now turn to the key point, which is the money. We do not know how much this deal is going to cost. There are two suggested amounts: the Institute for Fiscal Studies puts the cost at £9 billion, but the House of Commons Library briefing points out that the 0.6% of GDP in the Office for Budget Responsibility forecast actually amounts to £14 billion. As has been mentioned, that is an eye-watering amount of money, in the same period that we need to be spending money on dentists, GPs, capital investment, attendance at A&E, prevention, the shift to community and the 10-year plan.

When we should be seeing money delivered to the frontline, instead we are seeing money diverted to a small number of very large American-based pharmaceutical companies with no transparency, little debate and absolutely no vote in this House. It is the lack of scrutiny that I take issue with, and there are economists who point out that we could have an extra 330,000 excess deaths by 2036. The Minister is looking quizzically at me, but she has information that I do not. It could be that those economists are being alarmist, but maybe they are not. We simply do not know, because the Government refuse to publish the impact assessment owing to commercial sensitivities. Normally at this stage, I have a series of questions, but today—and this not just in the interests of time—I have only one: where is the impact assessment, and if the Government will not release it, what are they hiding?

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[Sadik Al-Hassan]

I am not sure where the hon. Gentleman’s figures come from. When we look at the drug tariff reimbursement, which is the system that we use to pay, and compare it with the arrangements in other countries, it is clear that we underpay significantly. Perhaps he is referring to something of which I am unaware; I should be happy to chat to him outside.

We in this country are addicted to low-cost drugs for our health service, and what does that addiction mean? It means that we have the lowest costs and we always go for the cheapest drugs, and that favours foreign manufacturers. It destroys UK supply chains, as we have seen over the last 25 years, and it endangers our resilience as a country. We are already seeing the side effects of that, with drugs being out of stock. We have a system for payment called the drug tariff, which establishes how much pharmacies will buy drugs for and how much they will be reimbursed for. There are currently 254 price concessions. Price concessions happen when a drug is out of stock, and we must make an emergency increase to the price in the drug tariff to try to bring it back into the country. Given that there are 3,500 drugs in that section of the drug tariff, 254 does not sound a lot, but it is the highest level that I remember seeing in my entire professional career. Last month’s highest level of 230 has just been exceeded.

Cheap drugs often mean that we overvalue the benefit of medicines in our system and use a “drug first” approach in the NHS, and that has continued for decades. When we increase the price that we pay for drugs, it allows us to start considering the benefits of other types of treatment, such as social prescribing. Social prescribing becomes a great deal cheaper by comparison in a system in which drugs are valued at the correct level. The all-party parliamentary group on pharmacy, which I chair, published a report in June 2025 that laid out some of the problems with drug pricing and availability. I absolutely support the idea of paying more for drugs, because at the moment we are building a system that is creaking and breaking. By trying to pursue every penny of savings, we have destroyed UK manufacturing and offshored our problems. The only way to bring that back is to rebuild the drug tariff, with the idea of paying to procure more in the UK.

[Layla Moran]

I am grateful to the hon. Gentleman for his speech, because he is showing how important this debate is. A lot of this has not been flushed out. Medicines UK, which is responsible for a lot of the generics that he talks about, disagrees with him, but that is a conversation for another time. My question is specific: does he agree that the lack of transparency behind this deal, and the lack of an impact assessment, is a material issue and that we should ask the Government to release such information?

[Sadik Al-Hassan]

First of all, Medicines UK does not disagree with me; its members disagree that the value from the UK-US trade deal will go to people other than them. Medicines UK actually thinks that companies are not paid enough for drugs in this country. Unfortunately, you might need to go and have a chat with the association about that, because you might have misunderstood.

--- Later in debate ---

[Preet Kaur Gill]

With respect, I am going to answer the questions that have been put to me by many hon. Members, and I am coming to the impact assessment.

We have been clear that the estimated short-term impact is around £1 billion in England over the spending review period. Costs will increase over time as NICE approves more medicines, but precise long-term costs cannot be modelled as a single figure; they depend on future medicines, NICE approvals, uptake and wider commercial developments.

Members mentioned a number of figures. I do not recognise the £9 billion and £14 billion figures for costs. Spending on innovative medicines increases year on year as new treatments become available, so underlining growth would be expected to continue regardless of this arrangement, and often the figures cited publicly do not take that into account. We are committed to increasing spending on medicines as a proportion of NHS spend, ending the recent decline in the proportion of health spend dedicated to medicines and increasing spending on innovative medicines to 0.6% of GDP.

The Chair of the Science, Innovation and Technology Committee, my hon. Friend the Member for Newcastle upon Tyne Central and West (Dame Chi Onwurah), and my hon. Friend the Member for North West Cambridgeshire (Sam Carling) raised a really important point. Life sciences is one of our most productive sectors. It underpins research and development, clinical trials and high-value manufacturing, and it supports jobs across the country. Over £1 billion in industry investment has already been secured since the announcement of this arrangement in December last year. That includes AstraZeneca’s recent announcement of a £300 million investment into R&D sites at Cambridge and Macclesfield. That demonstrates the confidence that this key sector has in the UK. Maintaining a strong commercial environment helps ensure continued investment and the development of new treatments. This is not separate from patient benefit. It enables the pipeline of the new medicines that NHS patients ultimately rely on.

[Layla Moran]

I am frustrated, because everything the Minister is saying is in the press release. Can she please answer the question? Will the Government release the impact assessment? If they will not, will they at least allow a Select Committee to see it confidentially?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. We are running out of time. Minister, please respond as briefly as you can.

[Madam Deputy Speaker]

I call Layla Moran to wind up the debate briefly, in under a minute.

[Layla Moran]

I am happy not to.

Question deferred (Standing Order No. 54).