UK doubles statutory payment rate on pharmaceutical sales from July

The UK government has doubled the rate that pharmaceutical companies must repay on the sales of newer products to the NHS under the statutory scheme for branded medicines in the second half of 2025, to a record 31.3 per cent.

Following a consultation, the government has decided to raise the statutory scheme payment rate for newer branded medicines from 15.5 per cent to 31.3 per cent of subject companies' NHS sales from 1 July 2025. [1] The new rate brings the annual average in the statutory scheme to 23.4 per cent over the whole of 2025. The statutory scheme headline payment percentage will be set at 24.3 per cent in 2026, and 26.0 per cent in 2027.

The new annual average rate is now well over three times what is required in Germany, which has a 7 per cent payment rate, and four times the average payment rate in France, which has an average payment rate of 5.7%. [2]

As a result of the hard cap on sector growth set by the statutory scheme, and the related Voluntary Scheme, the UK now invests a smaller share of its overall healthcare budget on medicines than any comparable country. Just 9% of the UK’s overall healthcare spending is on medicines, compared to 17% in Germany and Italy and 15% in France [3].

The government said in its response to the consultation that it recognised the impact that the Voluntary Scheme's payment percentages are likely to have on industry investment and UK product launch decisions. This is why the Secretary of State committed to an expedited VPAG review, ‘to scope options for a mutually beneficial amendment to the voluntary scheme’, which is still ongoing.

In March, the ABPI published a comprehensive report into the damage to patient care and economic growth caused by very high and unpredictable medicines payment rates, ‘Delivering a Voluntary Scheme for Health and Growth.’ [4]

In June, a report from WPI Economics looked at a subset of R&D activity in the UK and modelled the impact of prolonged high medicines payment rates [5]. The report showed that if very high new medicine payment rates of above 20 per cent of companies' UK revenue continue, the UK could lose out on £11bn of R&D investment by 2033. However, if new medicine payment rates are returned to pre-2023 levels of below 10 per cent, such losses can still be avoided.

Lower payment rates of under 10 per cent would also increase GDP by £61bn over the next 30 years, delivering increased tax revenue of around £20bn, according to WPI Economics’ calculations. The authors suggest that both these losses and gains could be even larger once the full range of life science investments in the UK is considered.

Richard Torbett, Chief Executive, the ABPI, said: “The UK’s sky-high and unpredictable payment rates send a terrible message to international investors at a time when the UK is trying to position life sciences research and development as an engine for health and growth.

“We urge the government to chart a clear path to reverse the UK’s historic underinvestment in medicines, through meaningful changes to both the Voluntary Scheme and Statutory Scheme. For the sake of patients, the NHS and the economy, we need to see a commitment to bring these unsustainable payment rates down to internationally comparable levels, alongside an equally strong commitment to valuing innovative medicines appropriately.”