The head of a UK public relations firm representing major American pharmaceutical companies resigned last month after the U.S. Embassy in London raised concerns about his public criticism of President Donald Trump. The incident highlights the increasingly sensitive relationship between the U.S. And the UK regarding drug pricing and access, and the lengths to which the Trump administration is willing to go to secure favorable terms for American businesses.
Gavin Megaw stepped down as president and managing director of Hanover in late January, following complaints from the U.S. Embassy to the American Pharmaceutical Group (APG) regarding his LinkedIn posts. The APG, which represents companies including Eli Lilly, Johnson & Johnson, and Gilead in the UK, utilizes Hanover for strategic communications. According to a document seen by the Financial Times and a source familiar with the matter, the embassy ceased direct contact with Hanover after Megaw’s posts came to their attention.
The core of the issue revolves around the Trump administration’s aggressive push for the UK to increase its National Health Service (NHS) spending on drugs. President Trump has repeatedly accused European countries of “freeloading” off U.S. Innovation in the pharmaceutical sector and has threatened to impose pharmaceutical tariffs. The U.S. Embassy has been actively involved in pressuring the UK government to address these concerns, and the APG relies on a strong relationship with the embassy to navigate these complex negotiations.
Megaw’s LinkedIn posts, while now deleted, included a description of a Trump press conference as “ludicrously meandering” and a reference to governments being “stuck in the Trump Trap” in relation to the Chagos Islands dispute. These comments, according to the source, prompted a strong reaction from the embassy. “The clear insinuation was that their help to the APG would be impacted,” the source stated. The embassy reportedly communicated to the APG that they would cease engagement unless Hanover was removed as their PR firm.
The APG ultimately complied with the embassy’s demands, allowing Hanover to work through the remainder of its contract. This decision underscores the significant leverage the U.S. Embassy wields in negotiations concerning pharmaceutical pricing. The source indicated that the APG views its relationship with the embassy as “key” because the embassy has “allowed pharmaceutical companies to overcome Treasury resistance to increasing drug prices.”
This situation unfolds against a backdrop of increasing tension surrounding drug pricing. Pharmaceutical companies are simultaneously advocating for higher payments from the UK government while also protesting a surge in a clawback tax on their UK sales. This tax, designed to recoup excessive profits, unexpectedly increased last year, adding further complexity to the negotiations.
In September , U.S. Ambassador to the UK, Warren Stephens, directly urged Chancellor Rachel Reeves to offer a more favorable deal on medicines pricing during a private dinner. This direct engagement highlights the Trump administration’s proactive approach to securing better terms for American pharmaceutical companies.
More recently, as part of a deal signed between London and Washington earlier in , the UK agreed to invest approximately 25 percent more in innovative treatments. This agreement, acknowledged by the government this month, is expected to cost the NHS in England an initial £1 billion over the first three years. This increased investment represents a significant concession by the UK government and a victory for the Trump administration’s efforts to secure greater access to the UK market for American pharmaceutical companies.
The incident involving Gavin Megaw and Hanover serves as a stark reminder of the political sensitivities surrounding drug pricing and the willingness of the U.S. Administration to exert pressure on its allies to achieve its objectives. It also illustrates the delicate balancing act faced by public relations firms operating in a politically charged environment, where even seemingly innocuous online commentary can have significant consequences.
Both the APG and Hanover released a joint statement confirming the conclusion of their contract at its scheduled expiry following a standard supplier review. The U.S. Embassy and Mr. Megaw both declined to comment on the matter.
