The UK Department of Health and Social Care (DHSC) has proposed to set the repayment percentage on sales of branded “newer” prescription-only medicines to the NHS at 16.5% for 2026, a significant reduction on the current rate of 24.3%. The DHSC published the proposals in a consultation, which is open for comment until 21 April 2026.
The Statutory Scheme applies by default to suppliers of branded prescription-only medicines to the NHS who have not elected to be members of the equivalent voluntary scheme for controlling NHS expenditure on branded medicines, currently the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG).
Both the Statutory Scheme and VPAG contain differential repayment mechanisms for each of “newer” and “older” medicines. Broadly speaking, “newer” medicines are those within 12 years from the first authorisation of a medicine containing the relevant active substance (though sales of new active substances and their line extensions are exempt from the repayment mechanisms under both schemes for the first 3 years after the initial authorisation for that active substance). The repayment rate for newer medicines under VPAG is dynamic in that it is calculated each year based on the total NHS expenditure on branded medicines over a specified cap (though the UK government has now agreed a ceiling payment rate of 15% for the remaining 3 years of VPAG, under its pharmaceutical pricing deal with the US). The headline repayment rate for newer medicines in 2026 under VPAG is 14.5%, down from 22.9% in 2025.
The government aims for “broad commercial equivalence” (BCE) between the Statutory Scheme and voluntary schemes. Previously, DHSC achieved this by calculating the rate payable for newer medicines under the Statutory Scheme using a similar method to VPAG. However, DHSC proposes to calculate the Statutory Scheme rate for 2026 explicitly by reference to the VPAG rate. The proposed 2026 Statutory Scheme rate is therefore calculated using the combined rate payable on newer medicines under VPAG (i.e. 14.5% headline rate plus 1% investment programme payment rate) plus 1% to maintain BCE while reflecting the wider differences between the schemes and government support for the partnership and commitments between industry and government developed under VPAG.
Allowing for the consultation process and statutory amendments, the earliest the revised repayment rate can be implemented is 1 July 2026. Therefore, manufacturers subject to the Statutory Scheme would pay a repayment rate of 8.7% in the second half of 2026, to account for the fact they have paid repayments at the current 24.3% rate in the first half.
DHSC also set out how in future years it will undertake a more restricted consultation so that it can avoid delays in implementing BCE between VPAG and the Statutory Scheme, while still discharging its duty to consult. This will comprise direct engagement with industry bodies and certain other representative stakeholders.