Two parallel schemes apply to control the costs of branded medicines to the NHS. These longstanding policy tools aim to ensure that the NHS can obtain the best possible value when purchasing medicines. They sit alongside other mechanisms, including health technology assessments and procurement/tendering processes.
Recent changes to the Voluntary Scheme for Branded Medicines Pricing and Access, VPAG, have significantly reduced repayment rates for innovative medicines to 15% or less for the duration of the current scheme. The Government’s announcement that the 2026 headline payment percentage would fall to 14.5% - down from a record 22.9% in 2025 - followed serious concerns about rising rates in recent years (see commentary here and here).
Following these changes to VPAG, the Department of Health and Social Care has launched a consultation on reforms to the Statutory Scheme, which applies to suppliers of branded medicines who do not participate in VPAG.
The Statutory Scheme was last updated in July 2025 introducing high and increasing headline payment rates for newer medicines:
- 23.4% in 2025
- 24.3% in 2026
- 26.0% in 2027.
The newly proposed Statutory Scheme headline payment percentage would be reduced to 16.5% from 2026 onwards. While the aim is broad equivalence between the two schemes, this figure is 1% higher than the combined 2026 VPAG headline payment percentage and investment programme payment percentage. The Government attributes this difference to the value of the partnership and commitments negotiated with industry under VPAG. The intention is to maintain this broad commercial equivalence in future years.
These reforms will require statutory change, amending the Branded Health Service Medicines (Costs) Regulations 2018. As well as updating the payment percentage for newer medicines under the Statutory Scheme, the proposals would simplify the procedure for future consultations.
Responses to the consultation can be submitted through an online survey, which will remain open until 21 April 2026.
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