Voluntary Scheme on branded medicines
There have been Voluntary Schemes for medicines pricing in one form or another for the last 65 years and there is no direct equivalent of the UK Voluntary Scheme in any other country.
The 2023 Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) is a non-contractual agreement, negotiated between DHSC (on behalf of the four nations), NHS England and the ABPI, as the representative body of the pharmaceutical industry in the UK.
This Scheme is available for companies to join from January 2023 until the end of 2028 and agrees that NHS expenditure on branded medicines will stay within an agreed limit, which will increase over time to 4% per annum by 2028. As set out in the Scheme, to do this pharmaceutical companies pay rebates on their sales back to the NHS on all expenditure above the capped limit.
Voluntary Schemes are designed to strike a balance between supporting innovation in the pharmaceutical industry and ensuring medicine spending in the UK remains under control.
Why do we have a Voluntary Scheme?
Companies that do not join the Voluntary Scheme are subject to what is known as a Statutory Scheme.
The voluntary approach arguably explains how the UK has historically reconciled only modest expenditure on medicines with life sciences investment levels that have remained substantial.
Last modified: 20 November 2023
Last reviewed: 20 November 2023