UK–US Pharmaceutical Deal Projected to Cost NHS £45bn and 229,000 Excess Deaths by 2036, BMJ Analysis Finds
The UK/US trade deal could cost more lives than COVID, but will boost US Pharma profits.
2 July 2026
An analysis published this week in The BMJ projects that the pharmaceutical trade agreement signed by the United Kingdom and United States last December will divert approximately £44.7 billion from NHS services in England by 2036, with modelling suggesting this reallocation could result in 229,000 excess preventable deaths over the same period, so exceeding the disastrous 137,000 excess deaths recorded in the UK during the COVID-19 pandemic between March 2020 and June 2022.
The analysis, conducted by researchers at the University of York, the University of Liverpool, and Christchurch Hospital in New Zealand, is the first published attempt to quantify the population-health consequences of the deal, which the government announced on 1 December 2025 as a landmark agreement to safeguard medicines access and drive investment in UK life sciences.
The terms of the deal
Under the agreement, the United States committed to a zero tariff on UK pharmaceutical and medical device exports for three years, until January 2029, a concession secured against the implied threat of tariffs of up to 100% on medicines imported into the US. In exchange, the UK government committed to more than doubling NHS expenditure on new branded medicines, from 0.3% of GDP to at least 0.6% by 2036, with interim targets of 0.35% in 2028 and 0.4% in 2030. This shifts overall medicines spending from roughly 10% to 12% of the NHS budget.
The deal also substantially weakened the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), the rebate mechanism designed to cap growth in NHS branded-medicines expenditure. The industry rebate rate, 23% in 2025, has been cut to 14.5%, reducing one of the principal safeguards against drug-cost inflation at precisely the moment prices are set to rise.
The projected costs
Assuming the spending targets are met and the economy grows in line with Office for Budget Responsibility forecasts, the authors calculate the NHS will need to find an additional £1.3 billion per year by 2028, rising to £8.8 billion per year by 2036, cumulatively around £44.7 billion by the end of the agreement period. The government’s own public position is that the deal will cost only about £1 billion extra between 2025–26 and 2028–29; it has conceded that costs will rise thereafter but has declined to publish estimates. In February, science minister Patrick Vallance confirmed the costs would fall on the Department of Health and Social Care rather than the Treasury, without new funding they must be absorbed from within existing NHS allocations made six months before the deal was agreed.
From opportunity cost to mortality
The study treats this diverted expenditure as an effective defunding. Because NHS spending on services such as prevention, diagnostics, elective care, community services generates better health results at a lower cost per quality-adjusted outcome than new branded medicines, redirecting funds toward higher drug prices produces a net health loss.
The authors’ modelling puts the loss at 229,000 excess preventable deaths in England by 2036, concentrated among patients with cardiovascular, respiratory, and gastrointestinal disease and cancer, with broader quality-of-life effects predicted for those with neurological, endocrine, musculoskeletal, and mental health conditions - a large section of the population.
The figure rises to 291,000 when knock-on effects on publicly funded adult social care are included: modelling of English local authority data indicates that each £1 billion the NHS must divert to fund the deal increases adult social care costs by around £118 million through rising morbidity and mortality.
Co-author Samuel Cross, professor of pharmacology and therapeutics at the University of Liverpool, told Al Jazeera that the agreement’s beneficiaries are pharmaceutical companies rather than NHS patients, and that ”the numbers speak for themselves.”
Diminished economic rationale
The analysis also challenges the economic case for the concessions. A US Supreme Court ruling has since reduced the tariff exposure the deal was designed to avert from 100% to 10%, substantially shrinking the value of the exemption. The UK is a net importer of medicines, and the projected incremental costs to the NHS are expected to exceed the entire annual value of UK medical exports to the US (approximately £5 billion) before 2031.
The authors are similarly sceptical of claims that higher UK prices will stimulate domestic pharmaceutical innovation, noting that the UK represents a small share of a global R&D market and that there is little evidence domestic pricing materially shifts global investment decisions. Their assessment is that the UK already pays at or above the long-term value of most new medicines.
Calls for transparency
The Department of Health and Social Care has completed an impact assessment of the deal’s wider costs but has not published it — a point seized upon across the political spectrum. Sir Ciarán Devane, chief executive of the NHS Alliance, said the analysis raised serious questions about whether the agreement represents value for patients, and urged the government to publish the full impact assessment so the deal can receive proper scrutiny. Liberal Democrat health spokesperson Helen Morgan described the findings as alarming and called for the government’s own impact review to be released. MPs from Labour and several opposition parties have made the same demand. The campaign group Global Justice Now has previously characterised the deal as sacrificing, NHS services to satisfy US and industry pressure for higher medicine prices.
The authors conclude that the arrangement raises fundamental questions of transparency and accountability, a health system designed to deliver equitable, patient-centred care now positioned, in their words, as underwriting risk in global pharmaceutical markets.
---
Source:
Health costs of the UK-US trade deal on pharmaceuticals. BMJ 2026. doi:10.1136/bmj-2026-340588
Caveat:
The source is a BMJ Analysis piece, and the excess-deaths figure rests on assumptions about the marginal cost per QALY of displaced NHS spending, and those threshold estimates are contested.