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A planned autumn review of the 2024 Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG) is being brought forward to report in June.

The move comes after warnings from the Association of the British Pharmaceutical Industry that “rocketing payment rates” under the pricing schemes for branded medicines are undermining efforts to make life sciences a key pillar of the government’s industrial strategy.

The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), which most pharma companies are signed up to, now requires companies to make record rebate payments of up to a quarter to a third (23.5 to 35.6 per cent) of their revenue from sales of branded medicines to the NHS.

The VPAG deal agreed in 2023 was intended to bring payment rates back to an internationally competitive level after they had risen to 21.2 per cent in 2023 from an average of 7 per cent between 2014-2021.

VPAG payment rates for newer medicines did fall in 2024 to 15.1 per cent: however, in 2025, they have again soared to 23.5 per cent for newer medicines, with companies still paying 10.6 to 35.6 per cent for older products.

At the heart of the issue, says the ABPI, is that the spending and payment assumptions considered by both sides when the VPAG scheme was negotiated are now very different to the original predictions.

The NHS has received more funding from the government than was assumed to be the case in 2023 which has led to more NHS activity and, in turn, a greater demand for medicines. The growth cap agreed for branded medicines has therefore been exceeded with the industry paying rebates on sales over the cap.

When the scheme was agreed in 2023, it included a planned review of scheme terms in the autumn of this year. In recognition of the government’s intention to publish both its 10-year plan for the NHS, and the Life Sciences Sector Plan as part of the broader industry strategy this summer, the government and industry have agreed to bring the review forward so it can be completed in June.