CEO David Ricks says Britain is “probably the worst country in Europe” for prices and urges ministers to raise prices and scrap contentious rebates or risk losing access to breakthrough treatments.

Eli Lilly’s chief executive David Ricks has delivered his starkest warning yet over the United Kingdom’s medicines market, branding Britain “probably the worst country in Europe” for drug prices and cautioning that the country will miss out on new treatments unless ministers raise prices and dismantle a contentious revenue‑rebate scheme. His comments, made on Wednesday, crystallise the industry’s mounting frustration after months of bruising talks with the government over how much drugmakers must pay back to the National Health Service (NHS).

At the centre of the row is the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), the framework that caps the growth of NHS spending on branded drugs and claws back a chunk of companies’ UK sales when the cap is breached. After a short‑lived thaw in 2024, rebate demands have crept back up in 2025 to roughly the low‑to‑mid‑20s percent of eligible sales, according to people familiar with the figures, reigniting a fight that first exploded when payments spiked two years ago. Industry groups say the levy—applied on top of steep confidential discounts negotiated by the NHS—has become a de facto tax that makes the UK an outlier among major European markets.

Ricks argued that the UK’s structure “rewards the cheapest sticker price rather than the best outcomes,” and that, combined with a high and unpredictable clawback, pushes companies to de‑prioritise British launches. “If these rules persist,” he said, “patients in the UK will wait longer for new medicines—and in some cases won’t see them at all.”

The showdown intensified last month when an accelerated review of VPAG between the Department of Health and Social Care and the Association of the British Pharmaceutical Industry (ABPI) collapsed without agreement. The impasse means the current method for calculating rebates will carry into 2026, prolonging uncertainty over how quickly the rates could ratchet up if NHS drug spending keeps rising.

Executives say the economics already bite. Several multinational drugmakers have paused or scaled back UK investments over the past two years, citing poor predictability and a “broken” market environment. Lilly has warned that the UK’s combination of low list prices and high clawbacks undermines business cases for local clinical development and manufacturing. In August, the company temporarily paused some UK orders of its weight‑loss and diabetes therapy Mounjaro ahead of a private‑market price rise, citing stockpiling and cross‑border arbitrage as patients and clinics shopped around Europe for supply. The move, while controversial, highlighted how big gaps between UK prices and those elsewhere in the region can ripple through supply chains.

The government’s aim—shielding taxpayers while broadening access—is not in dispute. Ministers argue that VPAG has delivered billions in savings, allowing the NHS to fund more treatments amid post‑pandemic budget strain. But industry leaders say the pendulum has swung too far. They contend that an aggressive clawback discourages launches of innovative medicines, particularly in cancer and rare diseases, and erodes the case for investing in British labs at a time when the UK is marketing itself as a global life sciences hub.

Behind the scenes, negotiators have traded proposals on softening the rebate for truly novel medicines, carving out one‑time gene therapies, and introducing multi‑year guardrails to limit sudden spikes. Yet without a broader reset on price levels, companies say such tweaks will not fix the fundamental problem: the UK’s pricing signals, they argue, remain among the least attractive in Europe. “It’s hard to justify being first—or even early—in Britain when the reward for innovation is so small and so uncertain,” said one senior pharma executive.

The stakes extend beyond corporate margins. Launch sequencing has become a frontline tactic in pricing battles, with firms increasingly rolling therapies out first in countries that pay more and accept broader use, then circling back to lower‑price markets months or years later. Patient advocates warn that such delays can be life‑limiting. In oncology, for example, late adoption of next‑generation targeted therapies can translate into lost survival gains compared with peers across the Channel. Ricks’s blunt assessment is intended to force a choice: raise prices and scrap the rebate—or risk Britain slipping further down companies’ priority lists.

Critics of the industry counter that drugmakers have enjoyed years of rising global profits, buoyed in part by the success of GLP‑1 medicines for diabetes and obesity. They say companies should absorb higher UK rebates as the cost of doing business in a publicly funded system. The ABPI responds that headline profits mask the expense and risk of R&D—and that the UK’s combination of low prices and high clawbacks is an outlier even among cost‑conscious health systems, leaving little room to recoup investments on cutting‑edge drugs.

Lilly’s own trajectory illustrates the tension. The company has poured billions into production capacity for GLP‑1 medicines worldwide, and this month announced further U.S. manufacturing expansion. But executives say the UK’s signals have pushed major projects—and some early‑stage partnerships—elsewhere. Other pharma groups, including Merck, Bristol Myers Squibb and AstraZeneca, have also aired concerns that VPAG’s design punishes growth: the more a company succeeds in bringing patients onto therapy, the more it pays back to the NHS.

The political context is complex. Across the Atlantic, the U.S. is pursuing its own experiment in curbing drug costs by benchmarking some prices to international levels. Ricks, while supporting a rebalancing of U.S. and European prices, has cautioned that importing European‑style controls into the American system without broader reform risks “the worst of two worlds”—lower innovation with little relief for patients’ out‑of‑pocket costs. In Europe, meanwhile, several countries have been wrestling with shortages and rationing as blockbuster demand for obesity drugs overwhelms supply, putting further pressure on pricing agencies to hold the line.

What would a reset look like? Industry proposals coalesce around three pillars. First, restore predictable, single‑digit percentage caps on growth in NHS branded spend, with fixed guardrails that prevent rebates from yo‑yoing year to year. Second, pay more—explicitly—for breakthrough medicines, with clear criteria that spare them from clawbacks for a defined period to encourage early UK launch. Third, simplify and speed up health technology assessments so that clinically important label expansions do not wait months for routine reimbursement. The goal, pharma says, is not to match the highest prices in Europe but to move the UK from the bottom of the league table into the pack.

For patients, the near term will feel familiar: strong demand for weight‑loss and diabetes treatments, tight supply, and continued debate over who should get access on the NHS. For investors, the key watchpoints are whether the government reopens negotiations on VPAG this autumn and whether a handful of high‑profile launches go ahead in the UK before year‑end. For ministers, the choice is whether to cede ground on prices and scrap or radically reshape the rebate—or to bet that companies will keep bringing drugs anyway.

Ricks’s message leaves little doubt about Lilly’s red lines. “We want to launch in Britain,” he said, “but not at any price—and certainly not at a price that punishes innovation twice.” Unless the UK can find a way to pay closer to European peers and abandon clawbacks that scale with success, he warned, the country risks confirming the one label it does not want: a market to come to last.

References

Financial Times (Sept 24, 2025): Eli Lilly boss brands UK ‘worst country in Europe’ for cheap drug prices.

The Guardian (Sept 24, 2025): UK is ‘worst country in Europe’ for drug prices, says Mounjaro maker.

ABPI (Aug 22, 2025): Accelerated review of VPAG concludes without agreement.

FiercePharma (Aug 28, 2025): Eli Lilly pauses UK Mounjaro orders ahead of price rise; (Mar 14, 2025): UK lifts drug rebate rate; (Aug 22, 2025): Drug price talks break down.