The UK-US Medicines Deal is a Hidden Cost of Brexit
The government recently published the terms of the UK–US medicines deal agreed late last year. The deal secures zero tariffs on UK pharmaceutical exports to the US for three years. In return, it commits the NHS to paying 25% more for new branded medicines, alongside a broader UK commitment to double the share of GDP spent on those medicines over the next decade, estimated to require around £14 billion in additional annual spending by 2036. This deal should be understood as one of Brexit’s hidden costs.
The deal is undoubtedly a win for the pharmaceutical industry, particularly large US drugmakers. The government says that is precisely the point: offering industry more favourable terms will make more innovative medicines available through the NHS and attract greater life sciences investment. The promised payoff is better outcomes for patients.
But that is only one side. Higher spending on medicines will increase pressure on an already overstretched NHS, leaving less for other services – from GP appointments to operations for those on waiting lists. The government disputes this but has refused to publish an impact assessment. Moreover, the extra costs will be met from existing NHS budgets – no additional funding has been allocated. A deal presented as a win for patients may therefore leave both patients and the NHS worse off.
Why, then, did the UK accept such a risky bargain?
The answer is that the UK was poorly positioned to refuse. Brexit is a large part of the reason why. It dealt a serious blow to the country’s appeal both as a medicines market and as a base for life-sciences research, and in doing so weakened its ability to withstand US tariff pressure.
Brexit split what had been one regulatory system into two. Companies seeking to market medicines in both the EU and the UK must now secure separate approvals from the European Medicines Agency (EMA) and the UK’s Medicines and Healthcare products Regulatory Agency (MHRA). The same applies to clinical trials. A single EU application can cover up to 30 European Economic Area (EEA) countries. Including UK sites means opening a second regulatory track, with a separate approval process and UK-specific requirements. That adds cost and delay – all for access to a market only a fraction of the size of the EU’s.
Brexit has, predictably, made the UK a less attractive destination for multinational trials.
The number of industry clinical trials initiated in the UK fell sharply after 2017 and, despite a recent recovery, remained below its 2017 level in 2024. The economic stakes are substantial: fewer trials mean potentially billions less in R&D spending each year, reduced NHS revenue, and fewer employment opportunities across a sector supporting tens of thousands of jobs. The wider cost is poorer prospects for long-term investment in UK life sciences.
The government’s post-Brexit strategy was to preserve competitiveness through regulatory agility. Central to that effort was reform of the MHRA. The medicines authorisation framework was modernised to attract innovation and speed up approvals; clinical trials underwent what was billed as the “biggest overhaul in trial regulation in 20 years.” The newly “sovereign” MHRA was meant to become a world-leading regulator that would help drive the UK’s transformation into a life-sciences "superpower".
The reality has been more sobering. Stripped of EU-linked work and fee income, the MHRA struggled to deliver the promised agility. New medicines are still typically approved later in the UK than in the US and EU, while some of the recent gains in speed reflect the extent to which the agency relies on decisions already taken by “trusted” overseas regulators.
But even a perfectly agile MHRA could not make up for what Brexit took away: the scale of the market and opportunity the UK could offer the pharmaceutical industry as part of the EU. Having lost that, the UK found itself poorly placed to resist US tariff threats, especially as major drugmakers warned that investment would move elsewhere unless the UK offered more favourable terms.
Brexit also exposed the UK to an additional form of pressure. In the EU, trade policy is negotiated collectively while medicines prices are set at the member state level, so Washington cannot threaten an individual member state with tariffs to force concessions over what its health system pays for medicines. Outside the EU, that trade-off became possible.
Ultimately, the UK entered negotiations alone, without the collective leverage of the EU, while still grappling with the regulatory and economic consequences of leaving the bloc. It could have walked away from the deal, but that would have risked another setback for an already strained economy. Instead, it accepted terms that set the promise of new medicines against the NHS’s ability to meet other patient needs.
Originally published by UKICE.
Vilija is a Lecturer in EU Law at King’s College London, having previously held posts at Oxford University, Reading University and NYU. She holds a DPhil in Law, MPhil in Law and a Magister Juris from Oxford University. Her award-winning monograph, Judicial Authority in EU Internal Market Law (Hart Publishing, 2022), has been recognised for its outstanding contribution to legal scholarship and European studies. She is also co-editor of The UK Regulatory Framework Post-Brexit: ‘Law Unbound’ (Oxford University Press, 2026) and contributes actively to debates on post-Brexit governance.
