RE: Gilead24 Aug 2025 11:09
UK pharma drug price talks break down as industry fails to lower discount rate
"The industry and the U.K. government were unable to reach a new agreement to bring down drug rebate rates under a national cost-containment framework known as the Voluntary Scheme for Branded Medicines Pricing, Access, and Growth, or VPAG, according to the Association of the British Pharmaceutical Industry (ABPI).
"VPAG is one of two tools that the U.K. government uses to control the costs of branded medicines to the National Health Service. The current scheme, which runs from 2024 to 2028, caps the allowed annual growth of drug expenditure at 3.75% for this and next year and at 4% for the remaining two years.
"As a result, biopharma companies are repaying about 23.5% to 35.6% of their U.K. revenue from branded drugs to the NHS under VPAG, according to a WPI Economics analysis cited by ABPI in June. Meanwhile, the British government recently set the 2025 annual rebate rate under its other drug cost program, called the statutory scheme, at 23.4%.
"...
"The pharma industry has been criticizing Britain’s drug cost-control schemes, saying they may dissuade life sciences investments in the country. But the industry recently escalated its demands for urgent action, as the Trump administration is dangling tariffs on pharmaceuticals to drive more U.S. investment.
"The U.K. could lose about 11 billion pounds sterling ($14.9 billion) in R&D investment by 2033 if the new medicine rebate rates stay above 20%, ABPI and its member companies warned in June.
"Simultaneously, President Donald Trump has again rolled out a “most favored nation” policy, which aims to match the costs of prescription drugs in the U.S. to the lowest price offered in other developed countries. And one of those efforts reportedly includes pushing for higher drug spending in foreign countries."
https://www.fiercepharma.com/pharma/uk-pharma-drug-price-talks-break-down-industry-fails-lower-discount-rate
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