ABPI response to government Statutory Scheme rise
The government has confirmed plans to raise the revenue clawback rate paid by pharmaceutical firms subject to the Statutory Scheme for branded medicines from 24.4% to 27.5% .
In February, the Association of the British Pharmaceutical Industry warned that the proposed rate rise would send the worst possible signal to global investors and boardrooms at a time UK life sciences are already facing significant challenges .
Work by WPI Strategy suggests that sustaining such high rates for another five years would result in economic scarring, with a total loss of £50bn to UK GDP by 2058 . The long-term losses in tax revenue alone are forecast to be worth £17.9bn, around £5.9bn more than the levy would raise for the NHS. Retaining high rates even longer after 2028, up to 2033, would mean foregoing a further £90bn of GDP and £29.9bn in associated tax revenues up to 2058.
Richard Torbett, Chief Executive at the ABPI said: “It is very disappointing that the government has chosen to press ahead with plans to increase the Statutory Scheme payment rate. Research published this week shows that such rates impact company investment decisions and have a detrimental economic impact and it is critical that the Government understands this evidence.
“Yesterday we published our positive proposals for how to work with the government and the NHS to put our sciences sector back on the path to growth. Working together we can create the conditions for innovative medicines to deliver their true value as an investment in the nation’s future health, wealth, and productivity.”
Earlier this week, the ABPI published the industry’s vision for a new agreement with the government which will deliver for patients, the NHS and the economy .
Last modified: 20 September 2023
Last reviewed: 20 September 2023