UK Pharma Trade Group Calls for Overhaul of Government’s Life Sciences Investment Evaluation and Medicines Pricing Schemes

The Association of the British Pharmaceutical Industry (ABPI), the UK’s main pharma trade group, pushed for urgent changes to the government’s system for evaluating life sciences investments, focusing on the Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG)13.

Industry concerns center on the sharply increased 'headline payment rates' under VPAG, requiring pharmaceutical companies to pay between 23.5%-35.6% of their NHS revenues, which threatens both patient access to innovative medicines and the UK’s competitiveness as a life sciences hub35.

A scheduled autumn 2025 review of VPAG was accelerated to June 2025 to address these concerns, in light of the government’s forthcoming 10-year NHS and Life Sciences Sector plans13.

Despite discussions, ABPI and the government failed to reach an agreement to reduce payment rates or address industry concerns, leaving the contested scheme in place and unresolved3.

The government’s broader 2025 Life Sciences Sector Plan promises over £2 billion in funding and strategic reforms (like speeding up clinical trials and supporting British R&D/manufacturing)42, but the ongoing dispute over medicines pricing risks undermining these ambitions.

Consultations propose raising the statutory scheme’s payment rate further in 2025 (to 23.8%) and higher in subsequent years, despite feedback that this could diminish the attractiveness of the UK for life sciences investment5.

Sources:

1. https://www.abpi.org.uk/media/news/2025/april/the-government-and-abpi-agree-to-accelerate-a-planned-review-of-vpag/

2. https://goodlifesci.sidley.com/2025/07/15/uk-life-sciences-sector-boosted-by-raft-of-new-policy-measures/

3. https://www.abpi.org.uk/media/news/2025/august/accelerated-review-of-vpag-concludes-without-agreement/

4. https://www.gov.uk/government/news/life-sciences-sector-plan-to-grow-economy-and-transform-nhs

5. 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