Published by Global Banking & Finance Review®
Posted on March 20, 2025
2 min readLast updated: January 24, 2026
Add as preferred source on GoogleUK pharma industry claims unsustainable pricing is blocking investments. AstraZeneca and others call for changes to the VPAG scheme.
By Maggie Fick
LONDON (Reuters) -The pharmaceutical industry on Thursday blasted the UK government's levy that aims to curb the national health system's drugs bill, arguing it is unsustainable and is halting companies from making future investments in the country.
The Association of the British Pharmaceutical Industry, including big pharma companies AstraZeneca, Roche and Pfizer, said in a joint statement that the five-year agreement reached with the government in late 2023 needed to be fixed because companies cannot afford the record rebates they are paying to the National Health Service (NHS) England.
The industry group said the medicines access scheme known as VPAG, or Voluntary Scheme for Branded Medicines Pricing, Access and Growth, is forcing them to pay between a quarter and a third of revenues from drug sales in the country back to the NHS. That percentage is up from around 5% of revenue that companies paid in 2021, under a previous agreement.
The UK government is highlighting life sciences as one of the sectors with the biggest growth potential and intends to make it a core element of its new industrial policy. The ABPI said that plan will fail without changes to the clawback scheme.
Relations between the pharma industry and the government over the scheme and other policies have long been contentious.
British drugmakers GSK and AstraZeneca have for years criticised the UK business investment climate. AstraZeneca in January scrapped plans to invest 450 million pounds ($584.96 million) in its vaccine manufacturing plant in northern England, citing a cut in government support.
($1 = 0.7693 pounds)
(Reporting by Maggie Fick; Editing by David Gregorio)
The article discusses the UK pharma industry's concerns over unsustainable pricing models affecting investments.
VPAG is the Voluntary Scheme for Branded Medicines Pricing, Access and Growth, requiring pharma companies to pay a portion of revenues to NHS.
AstraZeneca cited a lack of government support as the reason for scrapping its investment in a vaccine manufacturing plant.
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