UK confirms lower clawback rate for NHS medicines

The UK government has confirmed that the rebate rate for newer medicines supplied to the NHS under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) will be 14.5% next year, following the recent announcement of the UK-US pharma trade agreement.

That is a big reduction on the record 22.5% due from pharma manufacturers this year, and fulfils the pledge in the trade deal to make sure that the VPAG will not exceed 15% over the next three years.

The news has been welcomed by the Association of the British Pharmaceutical Industry (ABPI), whose chief executive – Richard Torbett – said the cap will "provide companies with greater certainty up to 2028."

He cautioned, however, that the lower VPAG rate is "only the first step in returning the UK to a more competitive position," as rates are still higher than in other comparable countries and there is "work to do to accelerate the NHS's adoption and use of cost-effective medicines to improve patient care."

Under the current VPAG, which started in 2024 and is due to run until 2028, pharma manufacturers pay back a percentage of the sales of newer medicines to the NHS, calculated by the extent to which the NHS's demand for new medicines exceeds its capped budget for such spending.

According to the ABPI, the payment rates for older branded medicines remain unchanged in 2026, with companies continuing to pay between 10% and 35% on their sales of each older medicine to the NHS, depending on the levels of price discount already offered to the NHS.

Companies will also pay an additional 1% on top of the newer and older payment rates next year, as a pre-agreed voluntary contribution to support an investment to improve the UK's health and life sciences sector infrastructure, taking the rebate to 15.5%.

Companies now have until 16th December to decide whether to participate in the voluntary scheme and, if they do not, they will join the parallel statutory scheme, which currently has a 2026 rate of 24.3%.

According to the ABPI, the government has also agreed to start talks with industry on a new "more sustainable" scheme that will come into effect in 2029.

The UK-US trade agreement revolved around maintaining tariffs on imports into the US at 0%, but, as a quid pro quo, prices of medicines used by the NHS will go up by 25% as a result of changes to the UK's health technology assessment (HTA) frameworks.

While it has been welcomed by the pharma industry and medical research organisations in the UK, the agreement has been criticised in the UK parliament. The opposition Liberal Democrat party claims it will divert billions of pounds from frontline NHS services and has called for a vote on the deal by MPs.

The government insists funding will come from allocations already made in the 2025 spending review.

Image by PublicDomainPictures from Pixabay