Innovative medicines supported as rebate rate falls by a third
Source: gov.uk (2025-12-10)

Further support provided for innovative medicines as the rebate rate falls by more than third for 2026

- Patients to benefit from innovative treatments as medicine rebate rate cut
- Lower rate will make UK more attractive destination for clinical trials and early launch of new medicines
- Follows landmark UK-US pharmaceutical deal that will see groundbreaking new treatments reach NHS front line quicker
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.

It follows the landmark UK-US pharmaceutical deal announced on December 1, which will see tens of thousands of patients benefit from Britain becoming the only country to have deal with the US securing 0% tariffs on branded pharmaceuticals, strengthening the UK’s position as a global hub for life sciences.

Greater investment in medicines and innovation helps people live healthier, more independent lives for longer - reducing hospital admissions, cutting waiting times and easing long-term pressure on the NHS.

Health Innovation Minister Dr Zubir Ahmed said:

As a practicing surgeon, I know firsthand how vital it is that patients have access to the latest medicines and innovative treatments.

This government has already delivered an agreement with the US that will expand access to tens of thousands of patients and make us the only country in the world to have a deal that secures zero percent tariffs on branded pharmaceuticals to the US.

The fall in the rebate rate will cement this, answering the call from leaders in the pharmaceuticals and life sciences sector for a lower and more stable payment rate for branded medicines.

Together, this will help secure and drive investment in the sector, ensuring Britain remains a powerhouse for life sciences for the benefit of our patients, our NHS and our economy.

The VPAG scheme helps to keep the NHS medicines bill sustainable for taxpayers. For newer medicines rebates are made through the headline payment percentage, set each December for the year ahead.

Investment in innovative medicines builds on the government’s commitment to turbocharge medical research through better and faster access to NHS data for researchers via a new Health Data Research Service (HDRS) that will slash red tape for researchers.

Science Minister Lord Vallance said:

Innovative medicines have turned HIV, heart disease, certain cancers and many other diseases into preventable, manageable, and sometimes even curable conditions.

We need our brilliant life sciences companies to discover and get important new medicines to patients right across the NHS and to create jobs in the UK. This new rate helps achieve that, and will be part of helping countless people live healthier, longer lives.

Dr Scott Purdon, chair of the Charity Medicines Access Coalition, said:

We are pleased to see that the new headline payment percentage for VPAG has been published. To support world-leading access to medicines for patients, the UK must be an attractive place to develop and launch innovative medicines.

The announcement will be of significant benefit if the rebate rate reduction results in greater investment and faster and broader access to life-changing treatment advances for UK patients.

On behalf of patients, we are hopeful that the new headline payment percentage rate reinforces the government’s commitment to increase access to medicines, deliver a thriving life sciences sector and ultimately get proven treatment advances into the hands of patients faster.