UK Drug Pricing Negotiations Collapse, Threatening Access to Innovative Medicines
核心洞察
UK Health Secretary Wes Streeting walked out of negotiations with the pharmaceutical industry on August 22, 2025, after failing to reach agreement on the VPAG (搜索) drug pricing scheme.
Rebate rates for new medicines have surged from 15.1% in 2024 to 22.9% in 2025, creating what industry leaders call "the VPAG (搜索) crisis" and making the UK less attractive for drug launches.
Gilead Sciences has already decided not to submit its breast cancer treatment Trodelvy for UK approval due to unfavorable commercial conditions.
Failed negotiations between the UK government and pharmaceutical industry over drug pricing threaten to undermine access to innovative medicines in Britain, as rebate rates for new treatments reach levels that experts warn could drive companies away from the UK market.
On August 22, 2025, UK Secretary of State for Health and Social Care Wes Streeting walked out of negotiations with the Association of the British Pharmaceutical Industry (ABPI (搜索)) after the two sides failed to agree on revisions to the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG (搜索)). The breakdown leaves current clawback rates in force, creating uncertainty for pharmaceutical companies operating in the UK.
Rebate Rates Surge Beyond Projections
The VPAG (搜索) scheme, which replaced the previous VPAS arrangement in 2024, allows the NHS to claw back a percentage of payments for drugs from developers to keep spending within set budgets. However, rebate rates for new medicines have escalated far beyond initial projections, rising from 15.1% in 2024 to 22.9% in 2025.
ABPI (搜索) chief executive Richard Torbett has referred to this situation as "the VPAG (搜索) crisis." When the scheme was agreed in December 2023, rates of 15%-16% were projected for newer medicines until 2026 or 2027, with expectations they would then decline.
"What we've had instead is just a precipitous increase from 15% way up to ~23%," explained Raj Gathani, special counsel at law firm Covington & Burling LLP. "There are a few reasons for it. One is that the DHSC (搜索)'s own ceiling for drug spend increases is being exceeded every year, and being exceeded by more than what was predicted."
High-Cost Treatments Drive Spending Increases
The surge in rebate rates stems from unexpectedly high drug spending in specific therapeutic areas. Hospital medicines, oncology (搜索) treatments, and novel diabetes (搜索) treatments have seen numerous new products enter the market without significant competition, driving up overall NHS drug expenditure.
Under current regulations, the government allows manufacturers to set their own prices for the first three years. "Until those work their way through to being subject to rebates, and eventually very significant rebates, you're going to have this bubble," Gathani noted.
Companies Begin Withdrawing from UK Market
The challenging commercial environment is already affecting pharmaceutical companies' decisions about the UK market. Gilead Sciences recently announced it would not submit a NICE application for its HER2-negative breast cancer (搜索) treatment Trodelvy (sacituzumab govitecan) because the commercial environment in the UK is unfavorable.
"If you go back 20 years, the UK was very much at the top of the pile. Over the years, you've seen it fall away, and people are talking about the UK as being a fairly low priority for launching individual medicines," said Grant Castle, partner at Covington & Burling LLP.
Limited Alternatives for Industry
Companies seeking to avoid VPAG (搜索) face limited options. Those not participating voluntarily fall under the Statutory Scheme, which offers similar rebate rates that are "probably just a little bit worse" than VPAG, according to Castle.
The two-tier system under VPAG (搜索) creates particular challenges for innovative medicines. While older medicines have predictable rebate rates of 10% plus applicable top-ups, newer medicines face variable rates set by the central government that can fluctuate based on overall NHS spending.
"For the newer medicines, it's out of your control; the percentage is set by the central government," Gathani explained. "The variable rate within the overall system will be that one that acutely suffers from unexpectedly exceeding the thresholds that the DHSC (搜索) has set for annual spend."
Fundamental Launch Decisions Ahead
Legal experts warn that the current situation may force pharmaceutical companies to make more fundamental decisions about the UK market. Rather than attempting to work within the existing system, companies may need to decide early whether to launch products in the UK at all.
"What companies may face is simply a more fundamental decision; to launch or not," Gathani said. "This idea that we can work through the system and modulate or compensate for things if something goes up or goes down, is becoming less feasible. I think what you'll find is companies having to take very early stage decisions; do we launch in the UK? Do we not launch at all? And in the case of products whose profitability has been severely affected in the UK, do we withdraw?"
The stalemate occurs as the UK faces additional pricing pressures from international policies, including potential Most Favored Nation pricing policies in the US, though experts note that VPAG (搜索) includes prohibitions on price increases that limit companies' ability to adjust pricing in response to such pressures.