The chief executive of US pharmaceutical giant Eli Lilly has warned that the UK is “probably the worst country in Europe” for drug prices, intensifying tensions between the government and the pharmaceutical industry.
Dave Ricks, head of the company behind the popular weight-loss drug Mounjaro, said that Britain’s strict pricing regime and rebate schemes make the country unattractive for pharmaceutical investment.
“Unless that changes, I don’t think the UK will see many new medicines, and I don’t think they will see much investment,” Ricks told the Financial Times.
The UK pays significantly less for medicines compared to other developed nations, but the rebate system—forcing companies to pay back a growing share of drug revenues to the NHS—has caused a backlash from global drugmakers.
Pharma Giants Pull Billions from the UK
So far this year, more than £1.8 billion worth of planned investments have been cancelled or paused. MSD (Merck) scrapped a £1 billion London research centre, AstraZeneca halted a £200 million expansion in Cambridge, and Eli Lilly suspended a £279 million lab project in London. Bristol Myers Squibb has also threatened not to sell a new schizophrenia drug in the UK.
Since 2022, 13 major projects have been abandoned, including closures, shelved research facilities, and stock market delistings. Ricks said: “It is not an attractive environment.”
The VPAG Pricing Dispute
Pharmaceutical companies are pushing the UK government to renegotiate the VPAG (Voluntary Scheme for Branded Medicines Pricing, Access and Growth), designed to control NHS spending. However, rebates on newer branded medicines surged by nearly 25% this year after NHS costs rose sharply.
Ricks criticised the “clawback scheme” which “charges us for our own success.”
US Pressure Under Donald Trump
The UK row comes as Donald Trump escalates his demands for lower drug prices in the US. The former president has called for American patients to pay no more than those in other developed nations. He recently singled out Mounjaro, claiming Americans pay $1,200–$1,300 for a drug that costs around $88 in London.
Trump’s administration has threatened litigation and regulatory blocks if pharmaceutical companies fail to commit to price cuts before a September 29 deadline.
Eli Lilly Raises UK Private Prices
In response to cross-border demand, Lilly raised the private market price of Mounjaro in the UK by up to 170% earlier this month after reports of patients travelling from Paris to buy cheaper doses.
Meanwhile, the company has confirmed a $6.5 billion investment in a new manufacturing facility in Houston, underscoring the stark difference between US and UK pharma strategies.
