The pharma industry in the UK has doubled down on its resistance to the increase in levies imposed on medicine sales, with a string of company leaders calling for an urgent rethink by the government.
They warn that, unless there are dramatic reforms to the voluntary rebate scheme (VPAG) – which this year will require companies to make payments of between a quarter and a third of revenues from the sale of branded medicines to the NHS – the UK's plan to make life sciences a pillar of its growth economy will fail.
Following the decision in December to set the VPAG rate at 22.9% for 2025, "global boardrooms are closely monitoring developments, concerned that the UK is further exacerbating its position as an international outlier," according to Russell Abberley, general manager of Amgen UK & Ireland.
It has already been speculated that AstraZeneca's termination of a plan to invest £450 million in a new vaccine manufacturing plant in the UK came about in part because of the big increase in the VPAG rate for newer medicines from around 15% in 2024 and mid-single digits in the pre-pandemic era.
The Association of the British Pharmaceutical Industry (ABPI) has estimated that will lead to the pharma industry paying around £3.4 billion ($4.41 billion) in rebates this year, at a rate that is far higher than is currently levied in other comparable European countries.
"Industry remains committed to working with government, at pace and with urgency, in the run-up to the scheme's Autumn review," said Abberley. "Together, we must identify solutions that bring the scheme back on track to meet its original objectives."
That sentiment was echoed by other UK industry leaders, including Biogen UK's managing director, Kyle Bromley, who said: "The size of the rebates and their unpredictability have had a major impact on our work in the UK and our investment here. We would love to celebrate the positive parts of the UK's life sciences ecosystem, but they are often overshadowed by the fact that we are a noticeable international outlier for the wrong reasons."
A report (PDF) published by the ABPI links the challenges of operating in the UK and the cap on the branded market to a steady decline in NHS access to innovative treatments, with England having slipped from first to ninth on the availability of new medicines in the space of a decade.
It has also fallen from fourth to tenth place in the global rankings for the number of phase 3 trials it hosts, behind similar European countries, including Spain, Germany, and Italy, with the share of global R&D investment falling from 7.3% to 5.7% in the last three years.
Guy Oliver, general manager for Bristol Myers Squibb UK and Ireland, said the VPAG rate has already led to cuts to partnerships supporting the NHS and workforce reductions across the sector, "difficult decisions […] which contradict the government's ambition to collaborate with industry and foster growth."
The ABPI is calling for a move away from a hard growth cap in the voluntary scheme and towards a system that fairly shares the cost and benefits of growth in medicine spending between government and industry.
Last week, the pharma sector also slammed the decision by the government to hike the rate in the accompanying, but far less used, statutory scheme from 15.5% to 32.2% of companies' NHS sales in the second half of this year.
https://pharmaphorum.com/news/uk-becoming-outlier-pharma-hitting-investment
