Discussions between UK Health Secretary Wes Streeting and pharmaceutical companies regarding NHS drug pricing have recently escalated following the rejection of a new pricing proposal. A deadline for agreement was not met by midday on Friday, allowing the existing rebate mechanism—designed to recover funds paid for medicines—to persist at a rate labeled “unsustainable” by the industry, potentially compromising patient access to treatments.
The contention centers around the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG). Under VPAG, pharmaceutical companies must give back a portion of their revenues from sales to the NHS. Negotiations have been ongoing for several months, especially after the government unexpectedly raised the rebate rate to nearly 23% for newer medicines during the previous December.
Streeting reportedly issued an ultimatum stating that if pharma companies did not accept his latest proposal—considered to be more favorable—then the existing arrangement would continue unchanged, which ultimately occurred. The proposed offer featured lower rebate rates for future years and an increase in the prices of new medicines.
The Association of the British Pharmaceutical Industry (ABPI) expressed concerns that the stalemate may lead to fewer new medicines being introduced in the UK, with adverse implications for patient care. A government spokesperson defended the current clawback scheme, stating it contributes to shining a light on cutting-edge treatments while maintaining sustainability for taxpayers.
In response, the ABPI urged urgent governmental action to tackle issues impacting the sector. They stated that the sizeable repayment rate restricts patient access to innovative medicines, thereby impacting the overall competitiveness of the UK life sciences market. Industry leaders have suggested that unless the situation improves, the UK’s position regarding research, investment, and medicine access may decline further on the global stage.
Source: https://www.theguardian.com/business/2025/aug/22/wes-streeting-pharma-firms-nhs-drug-pricing-rebate-scheme