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Innovative medicines supported as rebate rate falls by a third

ended 10. December 2025

Patients across the UK will benefit from innovative and life-changing treatments following a cut in rebate costs for companies announced by the government today (Wednesday 10 December).

The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) requires companies to make payments to the government based on a percentage of their sales of branded medicines to the NHS.

The 2026 payment percentage will be 14.5% - down more than a third from 22.9% in 2025. The lower rate has in part been driven by falling costs, including due to drugs going off patent, so lower revenues can be absorbed within existing budgets.

This lower rate will make the UK a more attractive destination for clinical trials, manufacturing investment and the early launch of new medicines – helping NHS patients benefit sooner from cutting-edge treatments and boosting economic growth.

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Simon Jones
Chief Operating Officer at VP MED Ventures
The UK government’s decision to lower the VPAG rebate rate from 22.9% in 2025 to 14.5% in 2026 should be seen as a strategic signal. After years of damaging sentiment from both global pharma and domestic biotech ecosystems, this move should be seen as a declaration that the UK is open for life science innovation again.

This is a calculated course correction, and one that recognised that the UK was becoming uninvestable due to excessive clawbacks and unpredictable pricing structures. By slashing the rebate rate by a third, the government is effectively acknowledging the economic damage done and is now actively repositioning the country as a launchpad for innovation, not a dead-end for R&D pipelines.