UK Proposes Raising Payment Scheme for Branded Medicines to Nearly 25% Amid Industry Pushback
The UK government has published a proposal to increase the statutory scheme headline payment rate for branded medicines to 23.8% in 2025, rising to 24.7% in 2026 and 26.4% in 2027, up from the current 15.5%1.
The new rates would come into force starting 1 July 2025, with payments made quarterly to minimize operational disruption1.
The changes introduce differentiated rates for older and newer medicines, with top-up payment percentages for certain products ranging from 0 to 25%1.
Exemptions to these payment rates include pharmacy-only medicines, small companies (under £6 million annual NHS sales), low-cost presentations (under £2), parallel imports, and select centrally-procured medicines1.
The policy responds to industry feedback and is intended to control NHS spending while maintaining patient access and incentivizing innovation1.
Drug industry groups have criticized the proposal, arguing that higher mandatory rebates could adversely affect drugmakers and potentially impact medicine supply or investment in the UK2.
The government's consultation also models alternative scenarios, maintaining a long-term allowed growth rate of 2% for branded medicines to avoid unsustainable NHS costs1.
Some press reports and commentators suggest the change may be partly aimed at fending off external pressures like potential US drug pricing or tariffs, but the main objective is to sustain NHS affordability345.
Sources:
1. https://www.gov.uk/government/consultations/proposed-review-of-the-statutory-scheme-for-branded-medicines-pricing/proposed-review-of-the-2025-scheme-to-control-the-cost-of-branded-health-service-medicines
2. https://ground.news/article/uk-plan-to-require-drugmakers-to-pay-higher-rebates-draws-criticism-from-industry-group
3. https://www.fiercepharma.com/pharma/uk-government-floats-plan-fend-looming-tariffs-raising-nhs-drug-pricing-range-politico
4. https://www.nuffieldtrust.org.uk/news-item/trump-medicines-and-the-nhs
5. https://www.libdems.org.uk/press/release/nhs-us-drug-price-increases-ministers-must-come-clean