In May 2025, the NHS became the first health service in the world to adopt a blood-test-first approach to diagnosing lung cancer. Liquid biopsy testing, which detects tumour DNA circulating in the blood, is now available to up to 15,000 lung cancer patients a year in England. It fast-tracks access to targeted therapy by up to two weeks, and an independent health economic assessment of the pilot put the saving at up to £11 million a year in lung cancer care alone.
Pharma and medtech have traditionally operated in separate commercial lanes, with different regulatory pathways, different procurement relationships with the NHS and different evidence standards. Precision medicine is making that separation into a barrier, and the NHS is beginning to reflect this in its commissioning models.
A targeted therapy’s value proposition depends as much on the diagnostic pathway as on the molecule itself. Diagnostic accuracy, speed of result and clinical workflow around testing all determine whether a drug that works for 60% of patients with a specific biomarker actually reaches those patients. A test that takes three weeks, requires tissue that is sometimes unavailable, or sits outside the pathway at the point of treatment decisions erodes the clinical and commercial value of the therapy it is supposed to unlock.
The lung cancer liquid biopsy pilot shows what happens when diagnostic and therapeutic strategy are designed together. Across 176 NHS hospitals, genetic variants were identified up to 16 days faster than conventional tissue-based testing, some patients avoided unnecessary procedures and chemotherapy, and the pathway matched patients to targeted therapies earlier. The diagnostic was not incidental to the therapy’s value; it was the mechanism through which that value was delivered.
For pharmaceutical companies developing targeted therapies, the diagnostic pathway is not just a clinical detail to be resolved downstream. NICE’s 2026-27 strategic priorities now explicitly include scanning for companion diagnostics and genomic testing, in close collaboration with medicines horizon scanning, where these tests are required to support the introduction of upcoming medicines.
The commercial separation between pharma and medtech is reinforced by how the NHS buys things. Medicines are commissioned through a national reimbursement pathway with a legal funding mandate once NICE approves them. Medical devices and diagnostics are procured locally, through Trust procurement teams, often on price, with no equivalent national mandate. A targeted therapy and its companion diagnostic can therefore arrive at a Trust through entirely different commercial conversations, at different times and with different levels of funding certainty.
Two changes are beginning to address this. From April 2026, NICE expanded its Technology Appraisal programme to cover diagnostics and digital health technologies, putting them on a legal par with medicines for the first time, so a diagnostic recommended through the National HealthTech Access Programme now carries the same commissioning obligation as a NICE-approved medicine. Separately, the MHRA opened a consultation in 2026 on indefinitely recognising EU MDR and IVDR-compliant devices in Great Britain, with the explicit aim of maintaining access to in vitro companion diagnostics used in precision oncology pathways.
The shift to outcome-based commissioning reinforces the case for convergence from a different angle. The 10-year plan’s commitment to precision medicine, early detection and neighbourhood health moves commissioners toward asking what a combination of products and services delivers for patients, rather than what each product costs individually. It’s a question pharma and medtech can only answer together.
The case for integrating diagnostic strategy early is strongest where patient selection matters most: oncology, rare diseases, immunology, and, increasingly, neurology and cardiovascular disease, as biomarker science develops. In these areas, evidence generation for a targeted therapy should treat the companion diagnostic as a co-dependent element, with joint clinical trial design, shared real-world evidence planning and aligned market access timelines.
Where a pharma company does not own or develop the diagnostic, the commercial relationship with the diagnostic company becomes a market access question. A targeted therapy that arrives at NICE appraisal without a clearly defined, accessible and NHS-validated diagnostic pathway faces a harder route to recommendation, and NICE’s updated appraisal manual contains a dedicated section on companion diagnostics for this reason.
A diagnostic that enables a targeted therapy to reach the right patient faster, reduces unnecessary treatment or avoids the cost of tissue biopsy has a health economic case that extends well beyond the cost of the test itself. Capturing that case requires understanding the therapeutic pathway in detail and designing evidence programmes around pathway-level value, not just diagnostic performance metrics.
The NHAP and the expanded Technology Appraisal programme create a route to mandatory NHS funding for diagnostics that can demonstrate high-impact, pathway-level value. As we set out in our earlier post on NHS medtech market access, that route is narrow and selective. For diagnostics companies whose products sit within a precision medicine pathway, the criteria are considerably easier to meet when the diagnostic is positioned as enabling a NICE-recommended therapy rather than as a standalone product.
NHS commissioners working on precision oncology, genomics and digital therapeutics for long-term conditions face the same structural problem: the products that need to work together arrive through separate channels, at different times, with different evidence standards and different funding mechanisms, each requiring a separate procurement decision. The cumulative burden of managing that fragmentation is substantial.
Industry partnerships that offer the therapy, the diagnostic and the implementation pathway as a coherent package, with shared outcome metrics, reduce that burden and increase the likelihood of adoption at scale. The NHS does not have the capacity to integrate every product individually, but it does have the appetite, and increasingly the commissioning frameworks, to adopt integrated pathway solutions that demonstrably improve outcomes.
Precision medicine has changed what a pharmaceutical product is. A targeted therapy without a validated diagnostic pathway is an incomplete product, and a diagnostic without a clear therapeutic use case lacks the health economic foundation that NHS commissioning now requires. The NHS’s liquid biopsy rollout, NICE’s expanded appraisal scope and the shift to outcome-based commissioning all point in the same direction: the value that matters is delivered through the whole pathway, not by any individual component within it.
For companies in both sectors, that is a commercial argument as much as a clinical one. The NHS is increasingly organised to commission integrated pathway solutions, and the question is whether industry is organised to offer them. CHASE are well positioned to assistwith broad experience in NHS–Industry Partnerships across medtech and pharmaceutical industries with expertise in developing and refining pathways within the NHS. Contact our team to find out more.
Explore our latest thinking, event updates and industry insights to stay informed.
NHS AI tools that work technically are common. Tools that change care at scale are not. CHASE examines what genuine pathway improvement from AI requires.
Record NHS mental health spending, a new cross-government strategy and the neighbourhood health shift are reshaping commercial landscape for pharma and medtech
NICE has launched a new healthtech evaluation pathway and a mandatory funding programme. For most medtech companies, the harder work still lies beyond approval.
.svg)
