After high-profile moves by Eli Lilly and other Big Pharmas to pause their U.K. investments last year, the Indianapolis-based pharma giant is making its desires known—and sharing an update on its negotiations there.
The company is pushing for the country’s leaders to raise National Health Service (NHS) drug prices and phase out a multibillion-pound rebate framework in exchange for Lilly to continue its U.K. investments, head of Lilly’s international operations, Patrik Jonsson, told The Financial Times.
Lilly’s investments in the U.K. have been at a standstill since last fall. In September, Eli Lilly CEO David Ricks told FT that Britain was “probably the worst country in Europe” for drug prices and “not an attractive environment for investment.”
Now, it seems the company is making headway on changing the status quo in the country, with Jonsson telling the newspaper he feels “optimistic” about an agreement with U.K. ministers being finalized by this summer.
The discussions at play also explore “innovative” pricing plans that would link payments for obesity drugs such as Lilly’s Zepbound to whether patients are able to return to work as a result of their treatment, according to the report.
As part of negotiations with the pharmaceutical industry, U.K. officials last year confirmed a plan to raise the National Institute for Health and Care Excellence (NICE) cost-effectiveness threshold for medicines, which will take effect in April. The threshold is used to evaluate whether a drug offers good value for the NHS’s money by balancing costs with the quality-adjusted life years (QALYs) a treatment offers.
Previously, the threshold was set for a cost-effectiveness range of £20,000 to £30,000 per QALY gained. The new threshold increases the range to £25,000 to £35,000/QALY.
Still, Lilly isn’t sure that this is enough, with Jonsson hoping to see further action to reach the extra £1.5 billion in NHS drug spending that U.K. officials pledged in December.
“What we would need to see is actually those goals turning into really a well-defined action plan with interventions and timelines,” he told the FT.
As Jonsson puts it, U.K. drug prices have been “far too low for far too long, and even with the current threshold, we are not back to where we started more than 20 years ago.”
The executive also hopes to see a change in a sweeping rebate scheme that has already been reduced for 2026. The program requires drugmakers to pay government rebates at a rate of 14.5% of their sales to the NHS, a significant reduction from 22.9% previously. Still, Jonsson says that the payments “should actually get down to zero” over time.
The lowered rebates and the adjusted NICE threshold came as a result of a landmark U.K.-U.S. trade deal, which allowed a tariff exception on drugs coming out of the U.K. in exchange for the pricing overhaul. The deal was reached after a flurry of paused U.K. investments from Lilly and its peers.
In September, Lilly opted to not yet finalize its investment in a planned Lilly Gateway Labs site as the company was “awaiting more clarity around the U.K. life sciences environment,” a spokesperson told Fierce in an emailed statement at the time. The Gateway Lab was originally announced in 2024 as part of a 279 million pound sterling investment into the U.K.’s life sciences sector.
Meanwhile, Sanofi froze its R&D investments in the U.K. around the same time, and Merck scrapped its plans for a 1 billion pound sterling R&D location in London while pulling research operations out of Britain.
Even after the December trade deal, AstraZeneca isn’t showing signs of restarting its paused investment in a 200 million pound sterling research site, confirming in January that the expansion remained on hold.
