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A minister has confirmed the government will spend an additional £1bn on new medicines over the next three years, following changes introduced as part of a UK–US life sciences deal.
In a letter sent to Dame Chi Onwurah MP, chair of the House of Commons Science, Innovation and Technology Committee, on 30 January 2026 — in response to her previous call for clarity on the UK–US life sciences deal — Lord Vallance, minister for science, innovation, research and nuclear, said spending on front-line healthcare services “will remain protected”.
The extra spending will be funded by the Department of Health and Social Care (DHSC), using allocations made at the 2025 spending review, he added.
Lord Vallance also said that the £1bn spending increase includes the cost of increased National Institute for Health and Care Excellence cost-effectiveness thresholds, as well as a cap on the amount pharmaceutical companies pay the government under the ‘Voluntary scheme for branded medicines pricing, access and growth’ to 15%, which were announced alongside the UK–US deal and promised 0% tariffs on UK pharmaceutical exports to the United States.
“Future funding will be settled at the next spending review. The government is committed to accelerating spend on innovative medicines over the next ten years to bring it back to historical levels,” Vallance noted.
“The cost of this depends on assumptions about future growth in underlying medicines spend, the NHS budget and GDP.”
Commenting on the letter, Onwurah said: “Greater transparency on the UK–US pharmaceutical deal is vital to give much-needed confidence and clarity to the NHS, the public and to the life sciences sector. I welcome Lord Vallance’s letter and the clarification that the funding for the deal will come from the DHSC.
“This deal carries a significant cost and it’s up to the government to ensure to ensure that it delivers significant return. It’s crucial that the benefits to UK patients outweigh the projected financial cost, particularly given the huge existing demands on the NHS.
“As the deal progresses, domestic health and life sciences policy must remain the priority — not the interests of US pharmaceutical companies.”
In December 2025, the DHSC confirmed to The Pharmaceutical Journal that the extra funding would come from the uplift the department received in its budget until 2028/2029 at the 2025 spending review.
According to the Office of Budgetary Responsibility, the government has budgeted for a 25% — or £3.3bn — rise in spending on branded medicines between 2025/2026 and 2028/2029.
Also in December 2025, health economist Ed Wilson told The Pharmaceutical Journal that even if spending on existing NHS services were protected, any increase in spending on new medicines represented less money to spend on new initiatives elsewhere, which may represent better value for money.
