UK drug pricing talks fail; 2026 rebates unchanged

Negotiations to adjust the UK’s voluntary pricing scheme ended without a deal, leaving the current rebate calculation in place for 2026.

Date: August 26, 2025

Summary

Talks between the UK government and the pharmaceutical industry over changes to the Voluntary Scheme for Branded Medicines, Pricing, Access and Growth (VPAG) have ended without agreement. As a result, next year’s rebate rate will be set using the same methodology used this year. Industry groups say this could again produce a high payback rate. Companies must decide whether to opt in or out of VPAG by the end of September 2025, before rates are set in December.

What happened

• The government and industry could not agree on changes to VPAG after a mid-scheme review.
• VPAG limits growth in sales of branded medicines to the National Health Service (NHS). Companies that join the scheme must return part of their revenue to the government.
• The Association of the British Pharmaceutical Industry (ABPI) said the review ended without resolution and warned that the core problems remain.

Why it matters

• This year’s VPAG rebate rate was 22.9%, higher than the previously predicted 15.3%.
• With the methodology unchanged for 2026, ABPI says companies could again face a high rate.
• Firms must choose whether to stay in VPAG or fall under the statutory scheme, which carries different and, for many products, less favorable terms.

Key numbers and dates

• 22.9%: VPAG rebate rate in 2025.
• 23.4%: Average statutory scheme rebate in 2025.
• 24.3% in 2026 and 26% in 2027: Statutory scheme payment percentages set by the government.
• End of September 2025: Deadline for companies to opt in or out of VPAG for next year.
• December 2025: When next year’s VPAG rates are due to be set.

Additional context

• The mid-scheme review was moved up from autumn to summer to try to address the 2025 spike. It still ended without agreement.
• The ABPI said a solution is needed that improves patient access, supports sector growth, and avoids paybacks that exceed those in other European countries.

What to watch next

• Whether government and industry resume talks ahead of the December rate-setting.
• Company decisions on VPAG participation versus the statutory scheme for 2026.

Source: UK Drug Pricing Scheme Talks Collapse: Industry Braces For Another Year Of High Rebates