The head of US pharmaceutical giant Eli Lilly has branded the UK “probably the worst country in Europe” for drug prices, warning that patients risk losing access to new medicines unless the government changes its pricing rules.
Dave Ricks, whose company manufactures the blockbuster weight-loss drug Mounjaro, said Britain’s strict cost regime and its controversial rebate scheme had created a hostile climate for the industry. “Unless that changes, I don’t think they will see many new medicines and I don’t think they will see much investment,” he told the Financial Times.
Billions in UK investments scrapped
Pharmaceutical firms have already abandoned or frozen almost £2bn of planned UK projects this year. MSD (Merck in the US) recently cancelled a £1bn London research hub, while AstraZeneca halted a £200m expansion in Cambridge and shelved a separate Liverpool project. Eli Lilly itself scrapped a planned London laboratory, part of a £279m package.
Bristol Myers Squibb has also threatened to withhold a new schizophrenia drug from the UK market. In total, 13 major projects have been scrapped, paused or scaled back since 2022 – a trend executives say reflects a deteriorating business environment.
The rebate dispute
At the heart of the row is the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), designed to keep NHS costs under control. Under the scheme, companies must repay a portion of revenues if NHS spending on branded drugs rises faster than expected.
That clawback has now ballooned to almost 25% for newer medicines, which Ricks described as a penalty for innovation. “[We] would like to get rid of the clawback scheme … which charges us for our own success,” he said.
Mounjaro price hike and global tensions
Eli Lilly recently raised the private UK price of Mounjaro by up to 170%, citing cross-border purchasing. “We had seen people taking trains from Paris to buy UK Mounjaro,” Ricks said. “That doesn’t make a tonne of sense for us.”
The company, valued at more than $700bn, has meanwhile announced a $6.5bn investment in a new US manufacturing facility in Houston. Ricks insisted the timing was unrelated to Donald Trump’s 29 September deadline for drugmakers to commit to lowering US prices but acknowledged political uncertainty.
Trump has repeatedly called for US prices to be slashed to levels paid abroad. “I have a lot of friends. They are fat,” the president said this week. “They pay $1,300, $1,200 and they go to London and they pay $88 … We are subsidising the rest of the world.”
Mounting pressure on the UK
Industry leaders argue Britain’s low drug prices are becoming unsustainable. They warn that unless negotiations with ministers produce a more “investment-friendly” deal, the UK risks falling behind in access to life-saving medicines and losing its status as a global research hub.
“It is not an attractive environment,” Ricks said bluntly.
