GSK CEO Calls for Drug Pricing Reform to Boost UK Life Sciences

Emma Walmsley, the departing chief executive of GlaxoSmithKline (GSK), has emphasized the need for the United Kingdom to reform its drug pricing strategy if it aims to establish itself as a leading "life sciences superpower." Her comments come at a pivotal moment, as the UK government prepares proposals that could increase NHS spending on new medications by as much as 25%.

Walmsley expressed her optimism and ambition regarding the ongoing negotiations between the pharmaceutical industry and government officials. She stated, "What everyone is putting their energy into, hopefully resolving, is how we make sure this country creates the right commercial environment." She stressed that achieving this goal is essential for the UK to secure its position in the global life sciences arena.

According to sources within the industry, an announcement regarding drug pricing reform from the government may be forthcoming by the end of the week. Walmsley, who is set to transition her role to Luke Miels, GSK’s chief commercial officer, at the close of the year, noted that the NHS currently allocates less than 10% of its total budget to medications, a figure that has dwindled over the years.

Walmsley’s insights come on the heels of remarks from the science minister, Patrick Vallance, who indicated to MPs that "some degree of price increase is inevitable" for brand new, innovative drugs. He acknowledged that the potential for increased costs necessitates additional funding for the NHS, particularly as Chancellor Rachel Reeves faces challenging fiscal decisions that may conflict with Labour’s promises to avoid raising key taxes like VAT, income tax, and national insurance.

Lord Vallance explained, "We’ve discussed the fact that if there’s a rise in price for innovative medicines, that comes with a cost load, and that needs to be met." The NHS Confederation and NHS Providers, organizations that represent various health trusts, cautioned that the current budget does not account for the financial implications of covering redundancies, strikes, or increased medicine costs. They have called for additional financial support from the chancellor to address these emerging challenges.

Despite the turbulent landscape, GSK has reaffirmed its commitment to the UK’s life sciences strategy. Walmsley highlighted the company's plans to invest $30 billion in manufacturing and research in the United States while simultaneously supporting the UK market, contrasting with other pharmaceutical firms that have either scaled back or paused their investments in the country. Notable examples include MSD (known as Merck in the US) and British competitor AstraZeneca.

In a signal of confidence, GSK has revised its sales and profit projections for 2025, attributing this optimistic outlook to robust double-digit growth across its respiratory, inflammation, immunology, oncology, and HIV treatment sectors. Following this announcement, GSK’s shares surged nearly 6%, positioning the company among the top gainers on the FTSE 100 index. During the third quarter, GSK reported a pre-tax profit of £2.5 billion, showcasing its strong performance amidst a challenging market.

As the UK navigates these complex dynamics within the pharmaceuticals industry, the call for reform in drug pricing remains a pivotal issue. Walmsley's insights underline the crucial balance between ensuring patient access to innovative treatments and fostering a conducive commercial environment for pharmaceutical companies.

The discussions surrounding drug pricing reform reflect broader strategies that could ultimately shape the future of the UK’s life sciences sector. A collaborative approach between the government and the pharmaceutical industry is essential to ensure sustainable growth, innovation, and patient access to vital medications. As stakeholders work towards resolving the current stand-off, the potential for the UK to emerge as a life sciences superpower hangs in the balance, hinging on timely and effective reforms.