Beyond the Bill: how do we make medicines affordable without killing innovation?

Two pharmaceutical giants have paused investment in the UK. More than a setback for British life sciences, it’s a warning signal for the future of new medicines. Across the Atlantic, American patients are following a parallel debate as the US government pursues reforms to cut drug costs, including the “Most Favoured Nation” (MFN) policy. The two countries may be grappling with different systems, but they face the same dilemma: how to make medicines affordable today without choking off the innovation patients will need tomorrow.

In the UK – and much of Europe – this tension is, in part, managed through Health Technology Assessments (HTAs), which aim to weigh costs against clinical benefit. But the HTA model brings its own challenges. In January, The Lancet published a striking analysis showing that two decades of NHS coverage for drugs recommended by NICE actually reduced overall population health in England. According to the study, the adoption of new medicines between 2000-2020 cost the NHS £75 billion and delivered a net loss of 1.25 million quality-adjusted life years (QALYs). While some patients benefitted from the medicines, the analysis argued that greater health gains could have been achieved had resources been deployed differently.

We argue that that conclusion is incomplete. QALYs and cost-effectiveness thresholds cannot fully capture the broader impact of innovation. Consider the COVID-19 vaccines: delivered in record time, they saved millions of lives, shielded health systems, and allowed economies to reopen. But none of that showed up in a cost-effectiveness model. The same is true for gene therapies, cancer breakthroughs, and rare disease treatments now coming forward.

A reality more complicated

If England risks underestimating innovation through rigid HTAs, the US faces a different danger – that of importing the European model wholesale through MFN. The idea is simple enough: Americans should not pay more than patients in other wealthy countries. But the reality is more complicated. In Europe, international reference pricing initially delivered budget relief, but quickly led to price convergence anchored around Germany and France. Smaller nations saw delays or outright denials of access to new medicines. If MFN were applied in the US, the consequences could ripple worldwide. Manufacturers might withhold or delay launches in other countries to avoid triggering downward price pressures in their largest market, leaving patients in smaller nations worse off without meaningfully reducing US prices.

Even at home, there’s little guarantee that patients would see the savings. North America’s pharmacy benefit managers (PBMs) were created to manage costs, but have become powerful intermediaries that negotiate rebates and discounts in opaque ways. Studies suggest as much as 40% of pharmaceutical spending is absorbed by PBMs, insurers, and providers before it reaches manufacturers. These rebates can inflate list prices while obscuring net costs, leaving patients with high out-of-pocket bills even as “savings” are captured elsewhere in the system. Instead of bending the cost curve, PBMs often distorted it.

England faces its own paradox. Even when NICE recommends a treatment, NHS uptake can be slow. For example, in metastatic breast cancer, Valuebase data showed that more than half of local formularies had still not listed two innovative medicines 18 months after NICE recommended them. It’s the same story for new treatments in almost every disease area. The result? Patients with urgent needs are left waiting. On top of this, unpredictable rebate rates under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) – which recently climbed close to 23% of NHS sales revenues – have created uncertainty that industry leaders warn could make England a less attractive launch market.

The stakes extend far beyond patients. At the national level, the UK life sciences industry contributes £17.6 billion in gross value added (GVA) each year and supports hundreds of thousands of jobs. In the US, the biopharmaceutical sector anchors nearly 40% of global biotech patents and drives millions of domestic jobs. Both countries are global leaders in science. Both risk undermining their advantage if investment slows, launches are delayed, or innovation is stifled.

Ensuring timely patient access

The answer is not to choose between affordability and innovation, but to find balance. That requires reform on both sides of the Atlantic. In the US, that means tackling PBM opacity and expanding value-based Medicare negotiations that consider clinical benefit, comparative effectiveness, and unmet medical need. In England, it means making VPAG predictable and sustainable, while ensuring NICE’s framework accounts for the broader societal value of innovation. For both, it means ensuring that, when medicines are approved, patients can actually access them in a timely way.

Above all, the US and UK must avoid importing each other’s mistakes. North America could learn from Europe’s experience with reference pricing, which has not sustainably lowered costs and has reduced patient access. Britain should study America’s PBM paradox, which shows how well-intentioned reforms can backfire if incentives are misaligned.

The lesson is clear: life sciences thrive on collaboration. That same spirit must now guide pricing and access reforms. Governments, health systems, and industry share the same goal: sustainable access to world-class treatments. Achieving it will require transparency, predictability, and above all, partnership.

Patients don’t experience drug pricing as policy debates; they experience it as moments of diagnosis, treatment, and hope. Access delayed is access denied. If the UK and US get this wrong, they risk not only their health systems and economies, but also the pipeline of medical breakthroughs the world depends on. If they get it right, they can set the standard for balancing affordability with innovation, ensuring patients from Manchester to Minnesota receive the best of both.

Sources

• The Lancet (2025): “NICE drug appraisals and population health”
• Value in Health (2025): “Referencing Drug Prices of Other Countries May Not Sustainably Lower Prices in the United States”
• Applied Health Economics and Health Policy (2025): “Trump’s Drug Pricing Order and the Domestic Economic Trade-Off”
• “The PBM Paradox: From Cost Containment to Price Spikes and What Comes Next”
• JAMA (2025): Commentaries on MFN, Medicare negotiations, and innovation

About the authors

Karen Westaway is CEO of ValueBase. She is a health equity evangelist passionate about accelerating access to innovative medicines. ValueBase works with global and EU partners across industry and health systems to deliver AI-driven, real-world insights that enable smarter planning and faster patient access.

Claire Gillis is CEO of VML Health. She is a scientist, health economist, entrepreneur, and business leader, with an academic foundation in pharmacology. She’s the co-founder of NOON, a platform for midlife women challenged by key life transitions and has been a non-executive director for InMed, a US charity supporting disadvantaged families. Her campaigning for health equity has awarded her The Women in Marketing Leadership Award for contributions to Health and Wellness and has also been included in the HERoes women role model lists from Yahoo Finance.