Negotiations begin for a new medicine pricing scheme

• Negotiations for a new voluntary scheme for branded medicines pricing to open between the government, NHS England and the Association of the British Pharmaceutical Industry (ABPI) today
• Parties are negotiating an agreement that supports better patient outcomes and a healthier population, a financially sustainable NHS, while also supporting economic growth
• A new voluntary scheme is expected to take effect from 1 January 2024, replacing the current scheme which ends on 31 December 2023

Negotiations for the successor to the voluntary scheme for branded medicines, pricing and access (VPAS) will begin today [Thursday 4 May] between the government, NHS England and the pharmaceutical industry.

For over 65 years the government and the pharmaceutical industry have worked together to help manage the affordability of medicines for the NHS and ensure rapid access and uptake of new medicines for patients, while also supporting the UK’s life sciences sector so that it can continue to deliver new innovations and economic growth.

In their first meeting, the government, NHS England and industry – represented by the ABPI – are expected to agree to a shared negotiation aim of working toward a mutually beneficial agreement that supports better patient outcomes and a healthier population, a financially sustainable NHS, and UK economic growth.

The success of the negotiations will be determined through securing a new voluntary scheme that:

Promotes better patient outcomes and a healthier population, by:

• Securing NHS patients rapid access to new clinically and cost-effective medicines, through streamlined approvals and better commercial and funding arrangements which reward innovation, so that the UK is an internationally competitive location for launching new medicines
• Tackling unwarranted variation in the use, and patient access to, approved medicines across the country
• Encouraging the development of the innovative and cost-effective medicines

Supports UK economic growth, by:

• Supporting the UK’s life sciences industry to help drive economic growth, particularly through its investment in research and development and clinical research
• Ensuring that the commercial environment for branded medicine suppliers to the NHS helps make the UK an internationally competitive place to invest
• Delivering a net benefit to the UK economy overall

Contributes to a financially sustainable NHS by:

• Keeping the price of branded medicines affordable for the NHS
• Supporting the NHS and industry to develop sustainable financial and investment strategies
• Delivering value for money for the taxpayer and the NHS by securing resilient provision of safe and effective medicines at reasonable prices, and encouraging efficient competition in medicines supply.

Health Minister Will Quince said:

These negotiations will ensure a new scheme continues to deliver value for money by providing significant savings for our health services, securing access to innovative lifesaving drugs for NHS patients, and helping to reduce waiting times – one of the Prime Minister’s five priorities.

The current voluntary scheme supports investment in NHS services and saves billions of pounds for the NHS, while also promoting innovations and a successful life sciences sector.

It’s vitally important that the successor to the current scheme delivers for the taxpayer, patients, the NHS, and life sciences.

Richard Torbett, Chief Executive at the ABPI said:

These negotiations provide an opportunity to secure the UK’s place as a global leader in life science research and medical innovation while also ensuring the best outcomes for UK patients and a thriving economy.

Working together, we can boost UK science and create the conditions for innovative medicines to deliver their true value as an investment in the nation’s health, wealth, and productivity.

Sir Hugh Taylor, who chaired the Accelerated Access Review in 2014 to bring innovative technologies to the NHS, was appointed last month as Chief Negotiations Advisor for the VPAS scheme.

Sir Hugh Taylor said:

The future Voluntary Scheme must continue to benefit the NHS and give its patients access to the best medicines, while supporting our life sciences sector.

I’m looking forward to reaching an agreement which not only benefits the NHS but will also encourage the pharmaceutical sector to continue investing in the UK.

The current scheme – which came into force in 2019 – is due to expire at the end of 2023. Negotiations are due to conclude in the autumn ahead of the new scheme starting on 1 January 2024.