A deal that gives the US zero tariffs on its imports of UK pharmaceuticals in return for the NHS raising spending on medicines will cost around £1 billion, Downing Street has said.

The agreement sees the UK’s threshold for what it can pay for new medicines raised by 25%, meaning some that would have been declined as too costly can be approved – such as breakthrough cancer treatments and therapies for rare diseases.

The Prime Minister’s spokesman dismissed reports that the move would cost the NHS some £3 billion a year on average by 2029, saying the figure would be around £1 billion by that time.

He said the cost would gradually climb as the National Institute for Health and Care Excellence (NICE) approves treatments.

“Costs will start smaller but will increase over time as NICE approve

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