UK 'worst country in Europe' for drug prices - and it could cost patients new medicines, warns Mounjaro maker

Dave Ricks, CEO at Eli Lilly and Company told the Financial Times that Britain’s strict cost controls have created the toughest environment for companies across the continent.

His remarks mark the latest clash between global pharma firms and the government over how much the NHS pays for drugs.

Industry leaders argue the current pricing system squeezes revenues while still expecting them to pour money into research and development in the UK.

Mr Ricks said Britain’s approach had made it "the most challenging environment for drug companies across the continent."

The row has fuelled growing concern over whether UK patients will be able to access breakthrough treatments if drugmakers decide the country is no longer worth investing in.

Issuing a blunt warning, Eli Lilly chief Dave Ricks said: "Unless that changes, I don’t think they will see many new medicines and I don’t think they will see much investment."

Mr Ricks singled out the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), which he described as punishing companies for success.

The NHS rebate under the scheme has climbed to nearly 23 per cent this year after a sharp rise in spending on newer branded drugs.

He said: "[We] would like to get rid of the clawback scheme ... which charges us for our own success.

"That’s the UK’s choice, but we react to those choices."

The impact is already visible. Drug giants have suspended or cancelled almost £2billion of UK investment this year as tensions with ministers escalate.

MSD, known as Merck in the US, scrapped a planned £1billion research hub in London. AstraZeneca halted a £200million expansion in Cambridge and later abandoned a Liverpool project.

Eli Lilly dropped plans for a London laboratory that formed part of a £279million programme, while Bristol Myers Squibb warned it may withhold a new schizophrenia drug from UK patients.

In total, four major projects worth more than £1.8billion have already been abandoned. Since 2022, thirteen significant pharmaceutical ventures have been affected by policies that industry leaders claim are weakening Britain’s life sciences sector, from site closures to companies delisting from the stock market.

At the same time, pressure is mounting from the United States. President Donald Trump has demanded that American pharmaceutical firms cut domestic medicine prices, with a binding deadline set for September 29.

He has pushed for a "most-favoured nation" approach, where US drug prices would be brought in line with those in other developed countries, a move the industry is fiercely resisting.

Mr Trump said: "I have a lot of friends. They are fat. They pay $1,300, $1,200 and they go to London and they pay $88 ... We are subsidising the rest of the world."

Mr Ricks acknowledged uncertainty about potential consequences if agreements aren't reached, suggesting possible litigation from the Justice Department or the Food and Drug Administration halting drug approvals.

Eli Lilly dramatically increased Mounjaro's UK price by up to 170 per cent for private purchasers last month, responding to what Ricks described as cross-border purchasing patterns.

"Mr Ricks said: "What we had seen is people taking trains from Paris to buy UK Mounjaro. That doesn't make a tonne of sense for us."

The executive characterised Britain's investment climate as unappealing, stating "it is not an attractive environment" when questioned about cancelled projects.

His comments coincided with Lilly's announcement of a $6.5 billion manufacturing facility in Houston, though Ricks insisted the timing was unrelated to Trump's pharmaceutical pricing deadline.

The company, valued at over $700billion on stock markets, has maintained operations in Britain since 1934, currently employing 700 people in Basingstoke and Bracknell.