The government has published new terms for the Statutory Scheme for Branded Medicines, following the announcement of the new Voluntary Scheme for Pricing, Access and Growth (VPAG), a negotiated alternative scheme which companies can opt into instead of the Statutory Scheme. This has been met with backlash from the ABPI (Association of the British Pharmaceutical Industry), who has accused the government of sending “mixed messages”.
Following a lengthy consultation period, the government has decided to set amended payment percentages for 2024 to 2026 based on a 2% increased allowed growth rate. As a result, rebate percentages in the updated Statutory scheme are set at 21.9%, 24%, and 26.8%, in 2024, 2025, and 2026, respectively, with the option remaining to amend payment rates to account for updated data or maintain broad commercial equivalence with the final version of VPAG.
Although the new VPAG scheme regarded as a “landmark” deal and received positive feedback from the ABPI, the new Statutory Scheme has been met with a negative response from the ABPI, who have stated that maintaining sales rebates at this level has “damaged the UK’s international standing with global life science companies”. Whilst the rebate rates have reduced from 2023’s record high of 27.5%, ABPI maintain that the new rates lie well above the historical average of 10.6% prior to 2023. ABPI further stated that the UK’s statutory rebate rate is significantly higher than other similar mechanisms operated by other companies, such as 12% in Germany, 7.5% in Spain, and 8.25% in Ireland, highlighting the potential for the UK life science ecosystem to become unattractive.
Consultations to the updated Statutory Scheme were stated to have “unprecedented levels” of objection, causing surprise with the governments progression with the plans seen to be “highly damaging to UK life sciences and NHS patient’s access to medicine”.
The government will be holding consultations in the new year to ensure arrangements for “younger” and “older” medicines in the Statutory Scheme more closely align to the new VPAG scheme and maintain broad commercial equivalence.
In addition to the amended rebate percentages, the government has also implemented an exemption from payment for medicines containing a new active substance for 26 months after marketing authorisation in the statutory scheme. Exemptions have also been included for exceptional central procurements (ECP) and centrally procured vaccines (CPV), sales of which would be excluded from measured scales, not affecting payment percentages in the scheme.
Manufacturers will now have to decide which scheme to join prior to the end of 2023.
Sources:
- Review of the scheme to control the cost of branded health service medicines: consultation response. GOV.UK. https://www.gov.uk/government/consultations/review-of-the-scheme-to-control-the-cost-of-branded-health-service-medicines/outcome/review-of-the-scheme-to-control-the-cost-of-branded-health-service-medicines-consultation-response#executive-summary. Accessed 5th December 2023.
- Government sends mixed message to global life science investors. ABPI. https://www.abpi.org.uk/media/news/2023/december/government-sends-mixed-message-to-global-life-science-investors/. Accessed 5th December 2023.
- Pharma accuses UK of ‘mixed messages’ on rebate schemes. Pharmaphorum. https://pharmaphorum.com/news/pharma-accuses-uk-mixed-messages-rebate-schemes. Accessed 5th December 2023.