A BMJ analysis warns that the UK-US pharmaceuticals deal could divert up to £45 billion from other NHS services by 2036, with knock-on costs landing squarely on adult social care. For commissioners already stretched thin, the real question is not whether the deal delivers cheaper medicines, but what it quietly takes away.

NHS Faces £45bn Bill for US Trade Deal, With Social Care Costs Rising Too

When the UK government signed its pharmaceuticals agreement with the United States last December, it was framed as a landmark moment for British life sciences, zero tariffs on pharmaceutical and medical device exports, and closer transatlantic cooperation on drug development. What went largely unexamined at the time was the other side of the ledger.

A new analysis published in The BMJ suggests the deal commits the NHS to a decade of steadily rising medicine costs, with as much as £45 billion diverted from other care by 2036 unless the Treasury finds new money to cover the gap. For a sector already watching every pound of NHS and local authority spending, that is not a footnote. It is the story.

How the Deal Reshapes NHS Drug Spending

The mechanics are technical but the consequences are not. From April 2026, the National Institute for Health and Care Excellence was instructed to raise its cost-effectiveness threshold for new medicines from £20,000 to £30,000 per quality-adjusted life year, up to a new band of £25,000 to £35,000. 

At the same time, the voluntary scheme that limits NHS spending on branded medicines through industry rebates has been loosened considerably, with the rebate rate cut from 23% to 14.5%. Together, these changes commit the government to more than doubling NHS spending on new medicines as a share of GDP, from 0.3% today to at least 0.6% by 2036. The BMJ analysis puts the additional annual cost to the English NHS at roughly £8.8 billion a year by that point, with a cumulative bill approaching £45 billion.

The Adult Social Care Knock-On Effect

For readers of this publication, the sharper concern sits downstream of the NHS balance sheet. The BMJ authors modelled the effect on English local authority data and found that every £1 billion the NHS is forced to find for this deal increases the cost of publicly funded adult social care by roughly £118 million, driven by rising morbidity as other services are squeezed to pay for medicines. That is a familiar pattern to anyone tracking how funding pressure moves through the system. Innovative Care News has previously covered how training gaps in dementia care are already straining a workforce operating with too little support, and the prospect of further indirect cost transfer into social care budgets will do nothing to close that gap.

Scale of the Projected Health Impact

The BMJ analysis does not stop at cost. It estimates that reduced spending on other NHS interventions could increase excess preventable deaths by 229,000 by 2036, a figure the authors say exceeds the toll of the COVID-19 pandemic between March 2020 and June 2022. Factor in the indirect effect on social care and that figure rises to 291,000, concentrated among people with cardiovascular, respiratory and gastrointestinal disease, and cancer. NICE itself estimates the raised thresholds will unlock only two to five additional medicines a year for approval, since the regulator already approves more than 90% of what it evaluates. The likelier effect, in other words, is not broader access but higher prices for medicines that were reaching patients regardless.

Transparency and the Missing Impact Assessment

The Department of Health and Social Care has carried out its own impact assessment of the deal, but has not published it. The BMJ authors are calling for that document, along with the full terms of the agreement, to be released for parliamentary scrutiny. It is a demand that echoes a wider pattern this publication has tracked in recent months, from the disputed terms of the NHS Federated Data Platform contract to the broader question of how much visibility commissioners and the public actually have into deals struck on the NHS’s behalf. Our earlier coverage of the data platform dispute and its unresolved legacy raised similar concerns about decisions made with limited public accountability. The pharmaceuticals deal’s economic case has also weakened since it was signed. A US Supreme Court ruling has since cut the tariffs the agreement was designed to avoid from 100% to 10%, meaning the projected NHS costs are expected to exceed the entire annual value of UK medical exports to the United States before 2031.

What Commissioners Should Be Watching

None of this plays out in isolation. NHS trusts and technology providers are already under pressure to demonstrate value for money on far smaller sums than these, as seen in the scrutiny applied to initiatives such as the MHRA’s new AI sandbox for catching adverse drug reactions, which is itself aimed at reducing a £2 billion annual cost to the NHS. A £45 billion structural commitment dwarfs that entirely, and it arrives at a moment when other vulnerable groups, including children waiting for mental health and SEND support, are already competing for the same constrained pool of NHS funding. If medicine spending continues to rise on the trajectory this deal sets out, commissioners should expect that competition to intensify rather than ease.

The pharmaceuticals deal was sold as a growth story for UK life sciences. What the BMJ analysis makes clear is that it is also, quietly, a redistribution story, one in which the NHS absorbs the cost and adult social care inherits the overspill. Until the government publishes its own impact assessment, providers and commissioners are left estimating the damage from the outside.