UK Drugmakers and Government at Impasse Over New Medicine Rebate Scheme
Negotiations between the UK government and pharmaceutical industry over a new medicine rebate scheme have broken down without agreement as of August 22, 202515.
The main point of contention is the high rebate rates the government requires drugmakers to pay on sales of branded medicines; in 2025, mandatory rebates range from 23.5% to 35.6%14.
The statutory scheme for branded medicines now mandates a 31.3% rebate rate for the second half of 2025, nearly double the 15.5% in the first half, leading to industry criticism4.
The pharmaceutical industry argues that the sharply increased and unpredictable payment rates threaten the UK’s aspirations to be a leader in life sciences and risk deterring international investment4.
These rebate schemes—voluntary (VPAG) and statutory—are used by the government to cap NHS spending on branded medicines, which totaled about $18.6 billion in 2023-20242.
Industry groups have protested the changes, saying they undermine efforts to foster life sciences innovation in the UK economy24.
Sources:
1. https://www.bioworld.com/articles/723287-uk-drug-pricing-talks-called-off-without-a-deal
2. https://www.statnews.com/pharmalot/2025/03/15/uk-medicines-pharma-rebates-innovation/
4. https://www.fiercepharma.com/pharma/pharmas-face-high-drug-rebates-uk-despite-governments-tweak-proposal