House of Lords Library

NHS and Future Trade Deals

Published Thursday, June 27, 2019

This House of Lords Library briefing has been prepared in advance of the debate on the case for protecting the NHS in future trade deals entered into by the United Kingdom which is due to take place in the House of Lords on 4 July 2019.

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On 4 July 2019, the House of Lords is due to debate a motion tabled by Lord Brooke of Alverthorpe (Labour) that “this House takes note of the case for protecting the National Health Service in future trade deals entered into by the United Kingdom”.

One of the Government’s main Brexit objectives has been to enable the UK to pursue an independent trade policy once it has left the EU. The Government’s policy is to replicate as far as possible the current trading arrangements with countries that have a trade agreement with the EU. It also wants to negotiate new trade agreements with countries that do not have a deal with the EU. It has begun some preparatory work on this, including launching public consultations on future free trade agreements with the United States, Canada and New Zealand.

The prospect of a trade agreement with the US in particular has raised concerns about what impact future trade terms might have on the NHS. During his state visit to the UK at the beginning of June, President Trump said the NHS would be “on the table” in trade talks. He later appeared to backtrack, explaining that although “everything’s up for negotiation”, the NHS was not something he would “consider being part of trade”. The Government has consistently said that the NHS is not up for sale. It maintains that a trade deal would not force the Government to privatise any public service or remove the ability of the UK and devolved governments to decide how to run publicly funded health services.

Private companies can already bid for contracts to provide services in the NHS in England, and some US-owned companies have won such contracts. Some campaigners fear that the terms of a trade deal with the US would allow investors to claim compensation if they lost access to the NHS market, and that this would prevent any policy changes in future to reduce the current level of privatisation within the NHS. Similar concerns arose during the failed Transatlantic Trade and Investment Partnership (TTIP) talks between the EU and the US. There have been calls, for example from the British Medical Association, for the Government to specifically exclude the NHS from future trade deals and from investor protection mechanisms.

Drug pricing is another issue that could arise during trade talks with the US. Donald Trump has blamed countries with socialised healthcare systems for negotiating “unreasonably low” prices from US drug makers, which he argues pushes up the price of prescription drugs for American patients. US negotiating objectives for a future trade deal with the UK, published in February 2019, said the US would seek to ensure transparent government reimbursement regimes for pharmaceuticals that would provide full market access for US products. The price the NHS pays for branded medicines is controlled through voluntary and statutory schemes. These arrangements limit how much the amount that the NHS spends on branded medicines can rise year-on-year.

Lords Library notes LLN-2019-0083

Author: Nicola Newson

Topics: Competition, Health services, Intellectual property, International trade

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House of Lords Library

The House of Lords Library delivers research and information services to Members and staff of the House in support of parliamentary business.