UK’s next pricing and access scheme to last for 7 years
Operational review meeting minutes released by the Department of Health and Social Care (DHSC) reveal that the industry and UK Government are planning to move to a seven-year agreement for the voluntary scheme that governs pricing and access for branded medicines.
That marks a break from the traditional five-year agreements that have been in place since the 1950s, bringing in more certainty for industry and signals potentially more commercial flexibility for individual companies.
Seven-year term
The industry association, the ABPI, and the DHSC hold regular operational review meetings to check on how well the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) is going. The scheme determines pricing and access for branded medicines bought by the NHS and has seen industry make regular paybacks to the UK Government to help manage affordability.
Meeting minutes from a 23rd July 2026 operational review meeting were published on 10th October and have revealed that the next agreement will run for seven years. That would see the next agreement run from 1st January 2029 until 31st December 2035. Voluntary agreements have traditionally run for five-year periods since they were first agreed in the 1950s, although occasionally they have been cut short.
A longer-time horizon could provide greater certainty for industry, although change has been possible in-scheme. The current agreement, running from 1st January 2024 to 31st December 2028, has been changed as a result of the US-UK pharmaceutical trade deal agreed in 2025. The UK Government committed to a fixed rebate rate of 15% on new medicines a year for 2026 to 2028 versus a variable rate that had been in place since 2024 and was originally intended to run until 2028.
The UK Government also agreed to spend twice as much on new medicines from 0.3% of GDP to at least 0.6% by 2036. The US agreed not to impose tariffs on UK pharmaceutical and medical exports from 1st January 2026 to 19th January 2029.
Principles for next voluntary pricing and access scheme
Principles for the next voluntary scheme have already been agreed, according to the DHSC meeting notes, covering growth, innovation, uptake, competition, and investment links. The next scheme will include “bilateral engagement: government will work with companies on strategically important medicines, including flexible commercial and risk-sharing models.” That could signal greater emphasis on company-by-company agreements than has been seen in the past, although such arrangements are already agreed on a case-by-case basis.
The new scheme will also take forwards a new formal biannual review process that is being established to assess progress against the commitment made by the UK Government to achieve the spending target of 0.6% of GDP on new medicines.
Changes have already been made as part of the UK-US pharma deal, overwriting the current VPAG. They include increasing the standard cost-effectiveness threshold used by the HTA body NICE to £25,000 to £30,000 per QALY from £20,000 to £30,000 per QALY. Nine new medicines have already achieved a positive recommendation from NICE as a result of the change implemented in April 2026.
The deal also included the use of a new value set for quality of life, used in NICE’s assessment of the cost-effectiveness of medicines, applying the EQ-5D-5L. The meeting minutes noted that work continues on implementing this change, with NICE closing a consultation on 27th May.
Re-basing calculations that determine paybacks
A nuance to the UK-US pharma deal is to ensure that the changes agreed aren’t undermined in the future by rebates. The meeting minutes reveal that the industry wants the GDP spending target for new medicines to be measured by net sales, in contrast to the spend-based decision that the Government wanted to use. This would help to mitigate costs such as VAT and distribution costs being counted toward the target.
There is also work being undertaken so that increased spending because of the higher threshold and EQ-5D-5L is also not counted and recouped in future paybacks on new medicines. An initial proposal for how the new calculations will work are due from the DHSC in mid-August 2026.
Current focus for delivery of US-UK pharmaceutical agreement
The meeting notes also highlighted how the current focus of delivering the US-UK pharma deal is on immediate pilots agreed through a joint taskforce. There are four pilots on regional budgets, managed access, productivity in NICE health technology assessments, as well as budget impact test commercial options. Further details are not yet available on what these mean in practice and how they differ from current practice.
There is also ongoing independent research on wider societal value and a NICE HTA Lab project on rare disease valuation.
Delayed delivery of access, adoption, and outcomes commitments
A change in the timeline for delivery against commitments from government within the current VPAG, in Chapter 3 that relates to access, adoption, and outcomes, were also part of discussions on the operation of VPAG.
A longer timeline was agreed to deliver a national local formulary minimum dataset, originally expected by June 2026. The intention was to increase visibility of local variation in implementing NICE guidance, including an annual report on unwarranted variation between national guidance and local formularies. In practice, variation in local formulary data collections has made it difficult to develop a national dataset. The aim is for an NHS England in-house reporting solution to be developed that can be delivered by January 2027.
A planned second consultation on NHS England’s Commercial Framework for New Medicines has also been delayed. An initial consultation was delivered on time, but the second consultation was intended to be a “further substantive consultation.” That was slated for no later than June 2025 in the VPAG. The meeting minutes suggested the second consultation should launch in December 2026.
The second consultation is expected to bring together updates to the commercial framework, including primary care rebates. Another consultation will be run alongside it on managed access principles. This consultation will include “a substantive policy change on reimbursement for existing patients where a product exit managed access following a negative NICE recommendation.” Under current rules, treatments given a NICE no are not recommended for routine funding for new patients.
The ABPI agreed the change to the second consultation timetable, as long as NHS England also engage with industry throughout the autumn on “taskforce outputs managed access updates, horizon scanning and service preparedness, primary care patient access schemes, and other outstanding issues from the previous commercial framework update.”
