By Pol Allingham

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An increase in the price the NHS pays for medicines will be “necessary” to prevent pharmaceutical investments from continuing to leave the UK, science minister Lord Patrick Vallance has said.

Major firms have shelved or paused planned UK pharmaceutical industry investments this year, and industry bosses recently told MPs a “difficult” environment and pressure on pricing had made Britain a less attractive investment environment than other countries such as the US.

US-based drugmaker Merck said its UK operation will scrap plans for a £1 billion site in London’s Kings Cross which had been due to open in 2027, impacting around 125 jobs, with bosses blaming the Government for paying too little for medicines and not investing enough in the sector.

Days later, AstraZeneca announced it had paused plans to invest £200 million at a Cambridge research site.

Lord Patrick told the BBC, in an interview aired on its Today programme, that “day by day” discussions are happening with the industry and the US to find a solution “that’s right for innovation, right for getting companies into the UK, and right for patients in the NHS”.

He said: “I’ve got no doubt we’ll come to some arrangement which gets to the right position on this, because we have to – I think price increases are going to be a necessary part of what we need to do to get to a solution which will benefit patients.”

It is for the Health Secretary and Chancellor to decide where the money comes from, he added.

Lord Vallance accepted “the Trump factor” is a large driver in the issue, telling the BBC: “It is the case that drug prices are very much higher in the US than anywhere else in the world.”

He said “a lot of” companies’ profits come from the US and this contributes to research and development (R&D), adding: “The UK is something like 2% or less of the profit of companies globally.”

Asked if that means prices are bound to increase in the UK if they decrease in the US, he said: “Well, I don’t think that’s necessarily the equation, but of course, President Trump has said… he wants greater parity on pricing.”

Pressed on the likelihood of a deal being struck, the minister added: “I think it’s inevitable – we must end up with a deal of some sort and we have to, because it’s in the interest of the economy, it’s in the interest of patients, and we need to get that right to make sure that patients here get rapid access to the best medicines, and to do that in a way that’s fair and equitable across the country.”

During his state visit to the UK, Mr Trump told reporters pharmaceutical firms were coming back to the US from other countries.

“Car companies are moving in, AI is moving in, everybody’s coming in… The drug companies are coming back, they all want to be there – they sort of have to be there – but they all want to be there,” he said.

At the start of the trip, the British pharmaceutical giant GSK revealed plans to put nearly £22 billion into US R&D and manufacturing over the next five years.

The Government said the deal will “strengthen UK-US life sciences ties”.

A boost to the UK industry came on Thursday with vaccine-maker Moderna’s announcement that it had opened a new manufacturing base in Oxfordshire.

The company said it is the UK’s first facility to manufacture mRNA jabs onshore.

The Moderna Innovation and Technology Centre (MITC) at the Harwell Science and Innovation Campus, near Chilton, can make up to 100 million doses per year, rising to 250 million in a pandemic, and will create around 150 highly skilled jobs, the Government said.

Health Secretary Wes Streeting said the “new cutting-edge facility” in Oxfordshire marks the “next pivotal moment in boosting our nation’s health, innovation and economy”.