What's the Row About the US Drug Deal and the NHS?

Nineteen health organisations and doctors' groups have written to Andy Burnham asking him to cancel the UK-US medicines trade deal. The letter, published by The Guardian on July 7, matters because Burnham is expected to become prime minister within weeks.
The deal was announced on December 1, 2025, as part of a wider UK-US trade agreement, with full details finalised by April 2, 2026, according to Reuters. One part of it sounds straightforward: UK drug companies will pay zero tariffs when selling medicines to the US for three years. The pharmaceutical industry welcomed this as good news for UK competitiveness.
But there's another part that has caused concern. The deal changes how the NHS decides which new medicines are expensive enough to refuse paying for. Under the old system, the NHS used a cost limit called NICE's threshold: if a medicine cost more than £20,000 to £30,000 per patient, it would likely be rejected as too pricey. The new deal raises that limit to £25,000 to £35,000 — a rise of 17% to 25%. Think of it like raising the price tag at which a shopkeeper stops buying stock.
Why is this a problem? Because medicines cost much more in America than they do in Britain. Critics worry that this change pushes UK drug prices closer to US prices, forcing the NHS to spend more money on medicines. Before the deal, pharmaceutical companies selling to the NHS were required to give a rebate of 23%. Analysis cited in the letter estimates that the NHS will need to spend an extra £44.7 billion by 2036 to cover the cost of new medicines under the deal, unless the government gives the NHS more money.
Three universities — York, Liverpool, and Christchurch in New Zealand — tried to work out what that extra spending means for people's lives. Their research suggests that if the NHS can't afford this spending, there could be 229,000 extra deaths by 2036. The Guardian first reported this figure and it has become central to the campaign against the deal.
Health groups and campaigners are also taking legal action. The New Statesman reported in May that they plan to challenge the deal in court, arguing it threatens how the NHS is supposed to work. The letter signed by doctors and patient advocates carries weight beyond simple activism.
The groups pushing back are not just asking about drug prices. They also want Burnham to address private hospitals getting NHS contracts, NHS job cuts, and the NHS's partnership with data company Palantir. They're treating the drug deal as part of a bigger story — the slow shift of NHS services toward private companies and outsourcing.
Here's the political question. Burnham has spent much of his career defending the NHS, including a stint as health secretary. Campaigners hope that if he becomes prime minister, he might be willing to cancel a deal that Keir Starmer's government has already signed and defended publicly. But unwinding a trade agreement with America — especially one tied to other trade benefits — is complicated. The deal bundles together drug prices and other trade advantages. According to the Commons Library, pulling out of just the drug pricing part without changing the rest would be very difficult. That joined-up structure means the whole agreement might have to be renegotiated if any part changes.


