The long-running dispute over rebates on sales of drugs that the pharma industry must pay to the U.K. government took a turn for the worse at the start of 2025, when it transpired that the rate would be going up from 15.3% to 22.9%. The row continued for most of the rest of the year before a truce of sorts was called in December.
The U.K. government has announced it will cut the rebate pharma companies have to pay on net sales of new drugs, reducing the rate from the record of 22.5% in 2025 to 14.5% for 2026. That is less than the 15% cap agreed earlier this month as part of a U.K./U.S. economic prosperity deal, which placed a requirement on the U.K. to improve the operating environment for pharmaceutical companies.
Despite a raft of government policies to turn the ship around, the latest figures show a further decline in setting up and staging commercial clinical trials in the U.K., with a 25% fall in the number of patients recruited over the past two years.
Negotiations between the U.K. government and the pharmaceutical industry have broken down with no agreement over the level of rebates companies must pay back to the government under the current voluntary pricing scheme. The two sides have been locked in discussions since April, when the government agreed to bring forward a midterm review of the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG).
Pharma companies in the U.K. said the rebate they are required to make on drug sales is making the country “un-investible,” prompting staff cuts and leading clinical research partnerships to be unwound. Rather than the 15.3% rebate on branded drugs companies expected to pay this year, the rate has leapt to 22.9%. That has left the Voluntary Scheme for Branded Medicine Pricing and Access “in crisis,” according to the Association of the British Pharmaceutical Industries.
The U.K. is embarking on the biggest overhaul of clinical trials regulations in 20 years in a bid to retake ground that was lost following Brexit, when the Medicines and Healthcare products Agency was excised from the EMA’s regulatory system.
Chief executives of U.K. medical research charities have issued a call for speedier uptake and more equitable access to new drugs that have received a cost-effectiveness seal of approval from the National Institute for Health and Care Excellence. In a joint report with the Association of the British Pharmaceutical Industry, the heads of eight charities examined a number of cases where access has been limited and set out recommendations to address the challenges of equity, uptake and health inequalities.
Investment in life sciences in the U.K. in 2022 was 47% lower than in 2021, new figures from the government show, a decline the British pharma industry believes is down to the high clawback rates imposed on drug manufacturers deterring global investors.
The U.K. government has announced £121 million (US$148 million) in funding to reboot the commercial clinical trials system after a sharp decline saw the number of industry-sponsored studies falling by 44% from 2017 to 2021.
