Department of Health and Social Care

Seamus Logan 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.