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The chief executive of Bristol Myers Squibb has warned that the US pharmaceutical company could divert investment away from the UK due to the expansion of a levy designed to limit the NHS’s medicines bill.

Giovanni Caforio also said low pricing for medicines purchased by the NHS from pharmaceutical companies was a major issue that threatened the UK’s ambition to become a leader in the life sciences industry.

Caforio told the Financial Times he was “very concerned” by the voluntary scheme for branded medicines pricing and access in the UK.

The scheme is an agreement between the Department of Health and the pharmaceutical industry that requires drug companies to pay 15 per cent of revenues from their products to the government if the NHS’s overall bill for medicines rises by more than 2 per cent annually.

Caforio singled out the levy as a major hurdle to investment, warning it affected the company’s ability to think strategically about UK spending.

“We are all very eager to continue to invest in the UK,” he said, while on a visit to BMS operations in Britain, which employ 1,200 people. “But the reality is that from a commercial perspective, the environment is not actually supporting continued investment in the UK.

“And that is particularly disappointing at a time in which actually the government in the UK has clearly articulated life sciences as an important priority for the country.”

The voluntary scheme for branded medicines and access, established in 2019, was originally intended to limit the amount the NHS spent on new medicines, whose manufacturers have the power to raise prices because their products are protected from competition by patents.

But the scheme was expanded to include certain off-patent medicines, including biosimilars, or copies of biologic medicines. Drug companies said market competition meant they already provided heavily discounted prices on biosimilars, leaving them struggling to absorb the scheme’s costs.

Caforio said the UK had significant potential to grow its life sciences industry due to its academic and scientific strengths, which are “extremely significant”.

But he added that these were not matched by marketplace dynamics that enabled drug companies like Bristol Myers Squibb to recover their substantial spending on research and development in developing life-saving medicines.

“We have a significant concern in the UK. The current levels of pricing are not sustainable and don’t recognise the value of innovation,” said Caforio,

Last week, health minister Will Quince lauded the UK’s potential as a life sciences superpower.

He told the FT’s global pharmaceuticals and biotechnology conference in London it was his mission to ensure “that when faced with a choice of where to invest — let’s say it’s a choice between the UK or Switzerland, or the UK or the US — that choice should be a no-brainer”.

John Stewart, NHS England’s national director for specialised commissioning, defended the voluntary scheme for branded medicines and access as being key to the health service’s ability to purchase innovative medicines and provide them to patients.

The health department said the levy had “driven significant improvements in patients accessing clinically- and cost-effective medicines, while protecting NHS finances and promoting innovation”.

The government was open to ideas about how the scheme should operate, after the current agreement runs out at the end of 2023, “and will continue to engage with industry to understand the impact on companies”, it added.