UK branded medicines pricing after the US deal: VPAG's 15% cap, the statutory scheme at 16.5%, and NICE's new threshold

What changed

The UK controls the NHS’s spend on branded medicines through two schemes: the voluntary scheme (VPAG, 2024–28), under which members repay a percentage of their NHS sales, and the statutory scheme for everyone else. The repayment rate is set each year to hold NHS branded spending to an agreed growth path.

The 2025 shock. The 2025 voluntary rate for newer medicines was set at 22.9%, against an expectation of around 15%. The industry called the UK “un-investable” and the government brought forward the scheme’s review.

The US arrangement. On 1 December 2025 the UK and the United States announced a pharmaceutical pricing arrangement, with the text published by the US Trade Representative in 2026. The UK undertook to raise NICE’s cost-effectiveness threshold to £25,000–35,000 per quality-adjusted life year; to cap the voluntary scheme’s newer-medicines rate at 15% for three years, with total portfolio rebates no more than 16%; to raise the NHS net price of new medicines by 25% from April 2026; and to lift spending on new medicines towards 0.6% of GDP over ten years. The United States, in return, applies no Section 232 tariff to UK-origin pharmaceuticals and ingredients for at least three years.

The 2026 rates. The voluntary scheme’s newer-medicines rate for 2026 is 14.5%, announced on 10 December 2025, plus the scheme’s 1% investment-programme levy, so 15.5% in all; the older-medicines bands (10% to 35% by discount band) are unchanged. The statutory scheme, which had charged 24.3% in the first half of 2026, falls to 16.5% from 1 July 2026 under SI 2026/614, two points above the voluntary rate because statutory members do not pay the levy; companies that paid 24.3% in the first half pay 8.7% in the second to true up. Future routine rate changes will be set through workshops with the industry bodies rather than full public consultations; the government rejected automatic tracking of the voluntary rate.

NICE. The threshold, unchanged for over twenty years, rose to £25,000–35,000 per QALY from April 2026. Appraisals that were only cost-effective under the new range were paused and restarted once it applied; existing prices are untouched; the severity modifier continues on top. NICE expects three to five extra positive recommendations a year.

What it means if you are…

A parallel trader. Three effects, pulling in different directions. Higher NHS net prices for new medicines from April 2026, and a higher NICE threshold, mean more new products reimbursed in the UK at higher prices, which widens the gap between EU and UK prices on new launches and is the raw material of parallel import. The lower repayment rates reduce the pressure on companies to raise UK list prices, which steadies the reference point. And the statutory and voluntary payments apply to branded parallel-import sales as they do to the originator’s own, so the rate cut is also a cost cut for importers of branded lines.

A generics or launch planner. Generics are outside both schemes and unaffected directly. The relevant change is indirect: a higher threshold and higher net prices for new originators mean the products that reach loss of exclusivity in the 2030s will have larger UK sales to erode.

A buyer. The NHS’s rebate income falls and its spend on new medicines rises, by design. Budget for more positive NICE decisions, at higher prices, from 2026.

What to watch

The 2027 voluntary and statutory rates, now set through engagement rather than consultation; whether the 15% cap holds for 2027 and 2028 as the arrangement promises; and the definition of the “new medicines” to which the 25% net-price rise applies, which the published text leaves open.