Words by Jade Williams
The UK government is set to increase the statutory scheme payment rate for newer branded medicines to over 30% of NHS sales in the second half of 2025.
Effective from July, companies operating under the scheme will face a doubling of the repayment rate from 15.5% to 31.3%. This brings the annual average statutory scheme rate for 2025 to 23.4%, set to climb to 24.3% in 2026 and 26.0% in 2027.
This shift places the UK’s rates significantly above those of other major European markets. Germany currently imposes a 7% rebate, while France’s average rate stands at 5.7%.
The UK now allocates just 9% of its total healthcare budget to pharmaceuticals – compared to Germany and Italy’s 17% and France’s 15%.
Acknowledging stakeholder concerns, the Department of Health and Social Care noted in its consultation response the likely implications of high repayment rates on R&D investment and new product launches in the UK. It cited the Secretary of State’s ongoing VPAG review as a forum to explore “mutually beneficial” reforms to the Voluntary Scheme.
The ABPI has consistently warned that high payment rates are deterring innovation and limiting access to new treatments. A June WPI Economics report also found that rates above 20% could cost the UK £11bn in R&D by 2033.
“The UK’s sky-high and unpredictable payment rates send a terrible message to international investors at a time when the UK is trying to position life sciences research and development as an engine for health and growth,” said Richard Torbett, Chief Executive, ABPI, in a press release. “For the sake of patients, the NHS and the economy, we need to see a commitment to bring these unsustainable payment rates down to internationally comparable levels, alongside an equally strong commitment to valuing innovative medicines appropriately.”
As discussions continue, the industry will be awaiting further detail on how potential future reforms will balance pricing control with sufficient support for innovation.
