The price the NHS pays for medicines will need to rise to stop a wave of pharmaceutical investment leaving the UK, science minister Patrick Vallance has said.

His comments follow several recent announcements from some of the world’s largest drug companies either pausing or scrapping UK projects.

Critics in the sector say low prices for new drugs, a lack of government investment, and tariff pressure from US President Donald Trump have been pushing firms away from the UK.

Lord Vallance told the BBC “price increases are going to be a necessary part” of solving that problem.

“Where the additional money would come from to pay higher prices is a matter for the department of health and the Treasury to figure out,” he added.

Lord Vallance was speaking at the opening of US vaccine giant Moderna’s new centre in Oxfordshire where millions of flu and Covid jabs will be made.

Health Secretary Wes Streeting, who cut the ribbon at the development project on Wednesday, told the BBC there was “a live conversation between government departments and the pharma industry” on drug pricing.

Lord Vallance added: “We must end up with a deal of some sort… because it’s in the interest of the economy, it’s in the interest of patients.”

According to the government, Moderna is investing more than a £1bn in UK research and development as part of a 10-year partnership to create new treatments jobs and boost pandemic resilience.

Its commitment, made three years ago, stands in contrast to Merck’s decision this month to scrap a £1bn project in Liverpool and AstraZeneca’s pausing of a £200m investment in Cambridge, also this month.

Meanwhile, Novartis said in August that NHS patients will lose access to new cutting-edge treatments because of skyrocketing costs.

It said it was not considering the UK for major new investments in manufacturing, research, or advanced technology because of “systemic barriers”.

Another pharmaceutical firm Eli Lily told the Financial Times on Wednesday the UK was “probably the worst country in Europe” for drug prices.

Over the last 10 years, UK spending on medicines has fallen from 15% of the NHS budget to 9%, while the rest of the developed world spends between 14% and 20%.

Elsewhere, Trump has put pressure on pharmaceutical companies to lower prices and invest more in the US.

Last month, talks broke down between Streeting and pharma firms over the cost of medicines for the UK.

The UK government said at the time it had put forward a “generous and unprecedented offer to accelerate growth” in the pharmaceutical sector.

Streeting previously insisted that he would not allow pharma companies to “rip off” taxpayers and described drug companies’ approach as “short-sighted”.

However, he struck a more conciliatory tone on Wednesday saying “it’s a live conversation – not just domestically with the industry but internationally with the US as well”.

“There’s an intersection between the growth ambitions of the government, the health ambitions of the government, the trade ambitions of the government and bilateral relations with the US,” he added.