Eli Lilly warns that the UK's current framework is undermining investment and could impact future launches and manufacturing decisions.
Eli Lilly is pressing the U.K. government to overhaul its drug pricing framework.
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The company is warning that future investment in the country will depend on higher medicine prices and changes to an industry rebate system that several companies have argued has become financially unsustainable.
In an interview with the Financial Times, Lilly’s international business president Patrik Jonsson said the company is in active discussions with U.K. ministers and is “optimistic” that an agreement could be reached by the summer.1
Central to those talks are proposals to increase National Health Service (NHS) drug prices on a regular basis and to phase out elements of the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), a mechanism that requires pharmaceutical companies to return a portion of their revenues to the NHS.1
Jonsson says medicine prices in the U.K. have been “far too low for far too long,” adding that even with recent adjustments, pricing levels remain below where they stood more than two decades ago.1
According to Reuters, Lilly is also exploring more “innovative” pricing approaches, including outcomes-based models that would tie reimbursement for certain therapies, such as anti-obesity drugs, to whether patients achieve measurable improvements, including returning to work.1
The company has already tested pricing flexibility in the market, as back in August 2025, Lilly
The U.K. government signaled openness to reform. In a statement, the Department of Health and Social Care said changes to medicine pricing are intended to ensure that NHS patients gain faster access to innovative treatments.
"Everyone deserves access to the best and most innovative treatments, and our changes to medicine pricing will make sure thousands of NHS patients gain faster access to new treatments," the British Department of Health and Social Care said.
Lilly’s position reflects broader industry concerns regarding the current pricing environment, particularly the financial burden imposed by Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG).2 Under the scheme, companies are required to rebate a percentage of their branded drug revenues to the NHS if overall spending exceeds agreed caps.
According to the Association of the British Pharmaceutical Industry (ABPI), those rebates have risen sharply, now ranging between 25% and 33% of revenues, compared to around 5% in 2021 under the previous agreement.2
In a joint statement back in 2025, the ABPI, whose members include AstraZeneca, Roche, and Pfizer, said the current framework is “unsustainable” and risks deterring future investment in the U.K.2 The group warned that without reforms, the government’s ambition to position life sciences as a cornerstone of its industrial strategy could be undermined.
Tensions between the pharmaceutical sector and U.K. policymakers over pricing and market access have persisted for years, with major drugmakers, including GSK and AstraZeneca, repeatedly raissing concerns about the country’s investment climate.
Earlier this year, AstraZeneca
For Lilly and its peers, the outcome of ongoing negotiations may determine whether the UK remains a competitive market for launching and manufacturing innovative therapies.
