The UK Government has shelved proposals that would have seen an additional £1 billion invested in medicines over the next three years, following a breakdown in negotiations with the pharmaceutical industry.
The plans were part of a review into the voluntary scheme for branded medicines pricing, access and growth (VPAG), which regulates the cost of branded medicines sold to the NHS. Earlier this year, the Department of Health and Social Care (DHSC) launched the review with the Association of the British Pharmaceutical Industry (ABPI) in an attempt to balance patient access to innovative treatments with fiscal pressures.
In June, ministers put forward what they described as an “unprecedented offer”, which would have increased net spending on medicines by around £1 billion by 2028, with billions more projected over the next decade. However, the DHSC said ABPI members were unwilling to put the offer to a board vote, forcing the Government to conclude the review without agreement.
A DHSC spokesperson stated, “Earlier this year, we launched a review jointly with the ABPI to ensure that it continues to deliver for both the industry and NHS.
In June we put forward an ambitious, generous set of proposals for reforms that would increase spending on medicines, to support access to innovative treatments for patients in the NHS and incentivise further industry investment, whilst balancing other spending pressures in a tough fiscal environment.
This was an unprecedented offer which would increase net spending on medicines by around £1 billion over the next three years. It is regrettable that following weeks of delay, ABPI members are unwilling to take our proposals to a board vote. We have therefore determined that the interests of patients and the NHS are best served by concluding the review and continuing with the existing VPAG scheme unamended.”
The existing VPAG scheme, which determines how much pharmaceutical companies must repay to the NHS from sales of branded medicines, will therefore remain in place. Payments are allocated across the devolved nations, including Wales, according to their share of medicine sales.
Richard Torbett, chief executive of the ABPI, warned that unresolved issues continue to threaten the UK’s life sciences ambitions. He said:
“While this review has concluded without reaching agreement, the issues it was set up to resolve remain unaddressed and continue to demand urgent action. 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.”
Torbett added that the NHS’s demand for innovative medicines is growing in line with rising health needs, yet the UK’s willingness to invest has declined due to high rebates and outdated cost-effectiveness thresholds. He argued that Britain risks falling further behind in international rankings for research, investment, and patient access to medicines unless reforms are made.
The Government has insisted it will continue supporting the life sciences sector through its Life Sciences Sector Plan and 10-Year Health Plan, but for now, the £1 billion boost to NHS medicines spending has been shelved.
