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Postscripts Rx
Conversations Beyond the Prescription. Where pharma, HCPs, life science and digital health solutions meets patients—after the script is written. Conversations on digital health, engagement, and real-world impacts that are re-writing the future of patient engagement.
Postscripts Rx
How US Tariffs Are Reshaping UK Pharma Markets
The global pharmaceutical landscape is undergoing a dramatic transformation, with UK pharma feeling the squeeze from US pricing reforms and tariff threats. This episode dives deep into how the 2022 US Inflation Reduction Act has created a domino effect across international markets, forcing companies to make tough strategic choices about pricing and market access.
When Eli Lilly temporarily suspended shipments of its blockbuster GLP-1 drug Manjaro to the UK in August, it wasn't due to production challenges—it was a deliberate pricing strategy. With Manjaro projected to exceed $5 billion in sales by 2026, the signal to the UK's National Health Service was clear: current reimbursement models aren't sustainable in this new global pricing reality. The situation has deteriorated to the point where Novartis UK's managing director recently declared the country "largely uninvestable" for pharmaceutical innovation.
At the heart of this crisis lies the UK's Voluntary Scheme for Branded Medicines Pricing and Access, which requires pharma companies to reimburse approximately 27% of net sales to the NHS—the highest rate in Europe. Add Brexit complications that have increased market launch times by 12-16 weeks and compliance costs by 20%, and you have a perfect storm threatening patient access to innovative therapies.
For pharma brand managers, access teams, and innovation leaders, this new landscape demands strategy recalibration. Global launch sequencing will increasingly prioritize markets with predictable pricing environments, while digital companion tools that demonstrate improved outcomes will become essential in negotiating value-based agreements. The future belongs to companies that can think globally while navigating local market complexities, leveraging data to demonstrate value, and maintaining transparent communication with patients caught in the middle of these pricing battles.
Curious about how these global pricing shifts will affect patient access and the future of pharmaceutical innovation? Subscribe to Postscripts for ongoing insights into the changing landscape of healthcare delivery and pharmaceutical strategy.
PostScripts Rx is not intended to constitute medical advice, nor is it intended to influence prescribing decisions or any other medical or clinical decision-making. All medical and clinical judgment and decision-making, prescribing decisions, and all related considerations remain exclusively the responsibility of providers and patients.
Welcome to Postscripts, the podcast exploring what happens after the first prescription. We cover the latest innovations in patient access, support, digital tools, HCP engagement and pharma marketing that we all hope drive better outcomes for patients. This podcast is for informational purposes only and in no way constitutes any medical advice, nor should it be used for any patient or clinical decision-making. Patients should always consult with their healthcare professionals. Welcome to the podcast. My name is Brian Carr from the Medisafe team, although any opinions expressed here are strictly my own and not those of Medisafe or its partners. Today we're tackling this global pricing dilemma, particularly how UK pharma is feeling the heat from the US tariffs in pricing announcements. It's an evolving and contentious topic with significant implications for global pharma strategy how the US administration, pricing reforms and trade strategies, including some of these expanded tariffs and threats of 200% tariffs on medications coming into the US, could be affecting pharma markets outside the United States Most critically. We're examining what these changes mean for the UK pharmaceutical market and ecosystem, which is a beacon for clinical trials. Now what happened this week? It was labeled by a pharma executive as quote largely uninvestable. As companies like Eli Lilly and Novartis, they're shifting their pricing strategies and what's happening is this knock-on effect across markets, especially one as cost-sensitive and, shall we say, bureaucratically complex as the UK. It's worth unpacking this for pharma marketers here in the US and global, across strategists, innovation teams, patient support leaders. So what we're seeing in these pricing pressures from the US market really rippled globally. What you may remember is the US Inflation Reduction Act passed in 2022. Actually, it really aimed to tackle some of the high US domestic drug prices. You may recall it had a lot to do with insulin at the time where we could bring insulin prices down to 30, $35 a dose. But one of the more far reaching implications has been the inclusion there of Medicare drug pricing negotiations right, which are seeing real pricing power that's going to start to take effect in 2026. So that's been welcomed by US patients and payers. It has caused a supply and demand squeeze for some global pharma executives.
Speaker 0:Us-centric companies are looking elsewhere to balance the books. So, for example, eli Lilly made headlines recently by stating the unthinkable that in order for the drug prices to decrease in the US, prices may have to rise elsewhere. So they've already taken action. For example, they temporarily suspended Manjaro shipments to the UK in late August. They paused the shipments of the GLP weight loss and diabetes drug and it really kind of disrupted the supply ahead of an expected price increase coming in September. It wasn't about production challenges or safety issues, it was purely strategic pricing a signal to the UK's National Health Service and public health policy architects. Monjaro particularly saw an explosive demand in the US with projected sales expected to exceed $5 billion by 2026. And that comes from Evaluate Pharma, the study they did. So the current UK reimbursement model just doesn't support the ROI expectations needed to sustain access at current prices that Lilly wants to set, particularly post the Inflation Reduction Act in streets, according to Jaro industry officials. So what's Lilly's action mean for you know, across access teams and marketers across more broadly kind of sets a precedent right. So it sends a clear message. The economics of global pharma have changed. Strategic trade-offs will increasingly be reflected in market launches, reframed value dossiers and, yes, access to suspensions. Maybe you may have suspensions and access.
Speaker 0:So it was Novartis that actually this week labeled UK quote largely uninvestable. It was Jonathan Kallstrom, the UK managing director at Novartis. He told the BBC UK has become uninvestable for pharmaceutical innovation in particular. Those are strong words as they come in a mounting crisis of confidence from drug makers who are doing business in the UK already and the primary driver for this is a pricing system that has long favored payer savings over future innovation in investment in the UK.
Speaker 0:Some would argue UK's quote voluntary scheme for branded medicines, pricing and access. It's the VPAS caps drugs spending and growth. It's made it difficult to generate strong margins or sustainable returns in the UK in particular. So under VPAS is what it's called makers are reimbursed. Drug makers reimburse the NHS in the UK roughly $3.3 billion a few years ago it's more than $3 billion and it's under clawback mechanisms so it gets complicated. But that's roughly 27% of net sales from pharma companies that are returned to the UK as rebates. That's the highest on record upon in European countries. So when you see these high rebate percentages are reducing the incentive to launch new therapies in the UK and it may delay access to some of those innovations for patients, right?
Speaker 0:His remarks really underscored a deeper frustration the perception that the UK no longer rewards innovation appropriately, especially when other global markets, including emerging ones, are really offering more favorable financial terms, tax breaks etc. So there's structural challenges supply chains, tariffs, costs of doing business are overlaying pricing issues. It's the growing cost of this complexity of an international pharmaceutical supply chains. So, with the US administration now moving forward on stricter tariffs for certain imports and the UK is reeling still from Brexit to a degree, that's regulatory divergence Companies are kind of caught in this web of logistical uncertainty which, as you know, one thing businesses and global companies dislike is uncertainty and the rising costs. There was a 2024 analysis from Pricewaterhouse that noted that pharma import-export regulatory divergence post-Brexit has increased time to market by up to 12 to 16 weeks for UK-based launches. Then there's compliance costs that have also increased by up to 20% for UK pharma manufacturing terms, according to PwC. So what that means is for US-based firms like Lilly, pfizer and Amvi, the revenue impact is twofold Fewer profits in the UK due to price caps and increased operational costs due to fragmented trade regulations of Brexit and supply chains. So what's this mean?
Speaker 0:If you're a farmer brand manager or an access team member right, or an innovation team member right, well, in short, strategy recalibration is probably going to be a must. Teams must now think globally, even when launching in localized markets. The idea of a tiered pricing model it's on the table again, this time with growth markets probably absorbing more costs than ever before as prices need to come down in the US. There'll be a lot more presence and importance on value communication, right. So if you're in marketing, the medical affairs and marketing teams must refine how they position the drug's value to international payer bodies and government organizations. Digital companion tools you're going to see enhanced support can improve outcomes and adherence metrics, helping negotiate those value-based pricing agreements even more. Tools like Medisafe, the digital companion uniquely positioned to really offer medication reminders, trackers and personalized content to patients, and the data that shows digitally that patients are having better efficacy on certain medications versus others if they're using digital enhancement tools and patient support programs right. It's going to also affect global launch planning right. So when you see, launch sequencing may now prioritize some markets with more predictable pricing environments and access teams may need to examine policy risk alongside market potential.
Speaker 0:We hear about great new drugs launching and releases, but are they coming in what sequence to your country and when and at what price? Right. So patient support programs they probably will likely be stress tested against supply chain bottlenecks, localized stockouts that may happen. We just saw this with Manjaro in the UK. So access to therapy it's no longer just about price. It's going to be about logistics as well transparency, patient communication, supply chain issues and challenges, or if more medications are being produced in the United States that could actually be positive for supply chain predictability and forecasts due to the localization of more medications being produced in the US.
Speaker 0:We've seen pharma companies respond with plans to not only open new research and development facilities but also new production facilities. For example, there's one being planned for Virginia right now. Why? Because the US government said not only will you get tax breaks, but we will also streamline your approvals for those production facilities in the US when it comes to getting through FDA and EPA and other governmental approvals. So how do we build that resilient pharma future? The U pharma market? It's at a bit of a crossroads, one that not only affects patients and policymakers in the UK but can set a tone now for how multinational pharma companies can evaluate market viability moving forward. So you're seeing US regulation. It's upending pricing formulas, political uncertainty shaping international trade.
Speaker 0:There's now a question whether the tariffs are legal at all. There's two appell whether the tariffs are legal at all. There's two appellate judges in the United States that have said the Trump administration's tariffs are not legal. So that may go to the Supreme Court, which then would decide if the tariffs were implemented legally or not. If they were, it would be status quo. If not, are there rebates and refunds coming to everyone who's been paying tariffs for the past few months? That'll be interesting to watch and we're going to need smart digital companions, clear communication frameworks to support a lot of this decision making that may be under pressure.
Speaker 0:And finally, for patients, especially those waiting breakthrough therapies in the UK, this moment really underscores the need for more dialogue, more innovation that puts access and equity at the core, with transparency. So what are the key takeaways? Well, the US Inflation Reduction Act really forcing those pharma companies to push for higher drug prices abroad from the US to maintain profitability. You saw Eli Lilly's suspension of Manjaro shipments to the UK. It's kind of a warning sign of pricing misalignment then impacting access right Novartis other major pharma firms signaling retreat from the UK due to unfavorable reimbursement models and record high clawbacks. Brexit tariff complications they're adding this operational and compliance cost to an already fragile pricing landscape.
Speaker 0:Patient access pharma marketing teams are going to be needed to coordinate globally, invest in digital support tools, prepare for trade-off scenarios in launch planning right. So we're going to be watching all of these. We wish you all a very good weekend. If you like what you saw here, please like and subscribe to the show, and we'll be talking more about clinical trials, innovation, digital impact strategies, marketing Big conference here in the US next week, with the Fierce Farmer Week happening in Philadelphia. We'll be updating you on that live from the conference floor, so stay tuned. Everyone, have a great day. Thank you so much for joining.
