UK yet to agree on VPAG scheme following accelerated review
While no other country has an identical scheme, analysis of the 2025 payment rate shows the UK is significantly behind comparable countries.
The UK government and pharmaceutical industry’s mid-scheme review of the controversial Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG) has concluded without agreement on addressing soaring VPAG payment rates.
The current rates require pharmaceutical companies to pay up to a quarter to a third of their sales revenue from branded medicines to the NHS.
In the accelerated review, changes discussed included ensuring the UK’s rapid return to single-digit, internationally competitive payment rates. Additionally, the review sought to address how the National Institute for Health and Care Excellence (NICE)’s values medicine innovation via its cost-effectiveness thresholds.
We need to reach a solution that … does not require industry to pay back nearly three times as much of its revenues as is required in other European countries”
The scheme launched in 2024 through a £400 million public-private investment, spread over five years, as a joint initiative between the Department of Health and Social Care (DHSC), NHS England and the Association of the British Pharmaceutical Industry (ABPI). It was introduced to improve the UK’s competitiveness in the life sciences industry. For example, through the scheme, the pharmaceutical industry planned to contribute £300 million to enhance clinical trial delivery.
Securing VPAG rates to ensure life sciences competitiveness in the UK
Commenting on the conclusion of this latest VPAG review, Richard Torbett, Chief Executive of the ABPI said: “We need to reach a solution that improves patient access to future innovation, allows the sector to fulfil its growth potential, and does not require industry to pay back nearly three times as much of its revenues as is required in other European countries. Together with global industry leaders, we want to continue constructive dialogue with government to find that solution”.
Johan Kahlström, Country President & Managing Director, Novartis UK & Ireland noted: “While the proposed increased investment in innovative medicines is good, the timeframe for delivery over 10 years is too long. If the UK is serious about becoming a top destination for life sciences by 2035, reform must start today – not in 2029”.
