Building momentum through the VPAG review

The latest Operational Review of the 2024 Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) took place in late December, and we would like to share the key points discussed and agreed at this important meeting. 

The review is designed to assess progress over the past year and focus minds on the important work that remains. It’s fair to say that all partners across the system are keen to move on from the accelerated review in 2025 and focus on delivering on everything still to do in the wider 2024 VPAG agreement, and most critically, what was agreed as part of the wider UK/US pharmaceuticals agreement from December. 

Our continued shared aim is to support the NHS, improve access to treatments, and strengthen the UK as a global hub for life sciences.

A year of progress and shared challenges
A key VPAG development at the end of 2025 was confirmation that the 2026 new medicine payment rate will be 14.5 per cent (15.5 per cent including the additional levy, which goes towards projects in the Investment Programme). The news came hot on the heels of the UK/US agreement to cap the rate of newer medicines at no more than 15 per cent for the next three years; however, this cap was not required for 2026.

This fall in the headline rate for 2026 reflects changes in the medicine mix used by the NHS, which led to a decline in newer medicine sales.

Work is underway to update the scheme rules so that future rate decisions are consistent with the UK’s proposals to raise net prices for new medicines – and that the way rates are set is clearly adjusted, giving industry confidence that it is not self-funding this increase. These updates need to be ready ahead of the 2027 rate-setting process, which makes early 2026 an important period for delivery.

Performance data across the system shows slowing growth in the use of newer branded medicines, changes in appraisal timelines, and early signs of a modest recovery in clinical trial recruitment. 

There is agreement that the next step is to place more focus on real-world outcomes, including how many medicines reach patients in routine NHS care. 

Understanding the scheme's impact on older medicines is also a priority. Early data show mixed patterns. Some products have seen price reductions, others price increases, and some changes in volumes. More analysis is needed to determine whether there are distinct trends across different parts of the market, or whether more should be done to examine the granular competition dynamics affecting different parts of the older market. This is important to understand how the scheme may influence competition and supply, and whether it may unintentionally make it harder to improve older treatments, such as through new formulations, new uses, or more environmentally sustainable delivery. Ensuring the scheme supports healthy competition and supply resilience remains a priority.

Delivering better access and strengthening investment
Despite the pressures of the past year, progress continues toward improving access, adoption and outcomes for patients. Work to rebuild the Innovation Scorecard, which is now expected in 2027, is one example of how better data will support better decisions across the NHS.

The Investment Programme linked to VPAG is now in full delivery. More than 20 active projects are helping to build a stronger research, manufacturing and access environment across the UK. Recent activity includes new primary care research centres that will provide more people with opportunities to participate in commercial clinical trials, as well as manufacturing projects focused on greener, more efficient production methods. National bodies across the UK are also improving their digital systems, planning tools and data platforms to support innovation. 

A key priority for 2026 will be to show early evidence of impact and ensure companies understand how to engage with the programme.

Looking ahead to 2026
The past year has been demanding but productive. In 2026, alongside existing work committed to as part of the current VPAG, a new process between government and industry will collectively review evidence on medicines pricing and both economic and patient outcomes. This is a crucial element of implementing the UK-US deal announced last December and will take place alongside the pricing reforms the government has already communicated. This process will help to ensure reforms are grounded in robust evidence to show tangible benefits to UK patients, and that we have a shared view of what is working and what needs to change in the UK commercial landscape beyond the end of the current VPAG scheme to achieve the shared ambition for UK life sciences and patient outcomes. Whilst outside the day-to-day operations of the VPAG, the first major checkpoint will be the start of the Medicines and Investment Sprints in Q1, which will be overseen by ministers and senior executives from major global companies.