Words by EMJ GOLD newsdesk
Leaders from key pharmaceutical companies operating in the UK are warning that the country’s life sciences growth plan is at risk – unless the government addresses unsustainable payment rates on manufacturers.
The pharmaceutical industry already adds over £17.6 billion directly to the UK economy, but growth has stagnated due to rising payments required by the Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG), which now demands up to 35.6% of a company’s revenue from branded medicine sales to the NHS.
As a result of this, the Association of the British Pharmaceutical Industry (ABPI) is calling for urgent action to restore international competitiveness in the UK’s pharmaceutical sector.
“The government has rightly identified life sciences as a critical growth sector for the economy, but unless these excessive payment rates are addressed, the UK will not see the growth and investment we all want, and the UK will continue to slip behind our peers,” warned Richard Torbett, Chief Executive, ABPI, in a press release. “We need an urgent commitment from the government to work with industry to get the UK back to an internationally competitive position.”
The current scheme has seen payment rates rise from 7% in 2014–2021 to 21.2% in 2023. Although rates for new medicines dipped to 15.1% in 2024, they have surged again to 23.5% in 2025, with companies still paying between 10.6% and 35.6% for older products. In contrast, countries like France and Germany have significantly lower rates, ranging from 5.7% to 7%. Meanwhile, the UK has dropped from first to ninth in Europe for the availability of new medicines over the past decade.
The ABPI calls for a revision of the growth cap for VPAG to reflect the increases in NHS funding, ensuring a fairer sharing of costs between the government and the industry – which will be essential to restoring the UK’s competitiveness in the global life sciences sector.
The ABPI’s warning was backed by numerous industry leaders, including Guy Oliver, General Manager, Bristol Myers Squibb UK and Ireland, who said: “The current VPAG rate for 2025 is leaving UK patients increasingly behind those in comparable countries. The UK life-sciences industry is in decline, with fewer clinical trials, a decrease in the launch of innovative medicines, cuts to partnerships supporting the NHS, and workforce reductions across the sector.”
Unless action is taken to address these unsustainable payment rates, the UK risks losing its position as a global leader in life sciences, with potentially lasting consequences for patients and the economy alike.
