- Patients to benefit from innovative treatments as medicine
rebate rate cut
- Lower rate will make UK more attractive destination for
clinical trials and early launch of new medicines
- Follows landmark UK-US pharmaceutical deal that will see
groundbreaking new treatments reach NHS front line quicker
Patients across the UK will benefit from innovative and
life-changing treatments following a cut in rebate costs for
companies announced by the government today (Wednesday 10
December).
The Voluntary Scheme for Branded Medicines Pricing, Access and
Growth (VPAG) requires companies to make payments to the
government based on a percentage of their sales of branded
medicines to the NHS.
The 2026 payment percentage will be 14.5% - down more than a
third from 22.9% in 2025. The lower rate has in part been driven
by falling costs, including due to drugs going off patent, so
lower revenues can be absorbed within existing budgets.
This lower rate will make the UK a more attractive destination
for clinical trials, manufacturing investment and the early
launch of new medicines – helping NHS patients benefit sooner
from cutting-edge treatments and boosting economic growth.
It follows the landmark UK-US pharmaceutical deal announced on
December 1, which will see tens of thousands of patients benefit
from Britain becoming the only country to have deal with the US
securing 0% tariffs on branded pharmaceuticals, strengthening the
UK's position as a global hub for life sciences.
Greater investment in medicines and innovation helps people live
healthier, more independent lives for longer - reducing hospital
admissions, cutting waiting times and easing long-term pressure
on the NHS.
Health Innovation Minister Dr said:
As a practicing surgeon, I know firsthand how vital it is that
patients have access to the latest medicines and innovative
treatments.
This government has already delivered an agreement with the US
that will expand access to tens of thousands of patients and
make us the only country in the world to have a deal that
secures zero percent tariffs on branded pharmaceuticals to the
US.
The fall in the rebate rate will cement this, answering the call
from leaders in the pharmaceuticals and life sciences sector for
a lower and more stable payment rate for branded medicines.
Together, this will help secure and drive investment in the
sector, ensuring Britain remains a powerhouse for life sciences
for the benefit of our patients, our NHS and our economy.
The VPAG scheme helps to keep the NHS medicines bill sustainable
for taxpayers. For newer medicines rebates are made through the
headline payment percentage, set each December for the year
ahead.
Investment in innovative medicines builds on the government's
commitment to turbocharge medical research through better and
faster access to NHS data for researchers via a new Health Data
Research Service (HDRS) that will slash red tape for researchers.
Science Minister said:
Innovative medicines have turned HIV, heart disease, certain
cancers and many other diseases into preventable, manageable, and
sometimes even curable conditions.
We need our brilliant life sciences companies to discover and get
important new medicines to patients right across the NHS and to
create jobs in the UK. This new rate helps achieve that, and will
be part of helping countless people live healthier, longer lives.
Dr Scott Purdon, chair of the Charity Medicines Access Coalition,
said:
We are pleased to see that the new headline payment percentage
for VPAG has been published. To support world-leading access to
medicines for patients, the UK must be an attractive place to
develop and launch innovative medicines.
The announcement will be of significant benefit if the rebate
rate reduction results in greater investment and faster and
broader access to life-changing treatment advances for UK
patients.
On behalf of patients, we are hopeful that the new headline
payment percentage rate reinforces the government's commitment to
increase access to medicines, deliver a thriving life sciences
sector and ultimately get proven treatment advances into the
hands of patients faster.
