Published by Global Banking & Finance Review®
Posted on December 10, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe UK will lower its medicine rebate rate to 14.5% in 2026 following a US deal, easing the burden on pharmaceutical firms.
By Alistair Smout
LONDON, Dec 10 (Reuters) - The British government said on Wednesday that the proportion of revenues from new medicine sales pharmaceutical firms need to pay back into England's National Health Service would fall in 2026 following a tariff deal with the United States.
The pharma sector has criticised the record rebates it has had to pay under a system aimed at curbing the NHS' drugs bill, saying the levels were unsustainable and impeded investment.
Britain has agreed to spend more on new medicines and address some industry concerns under a deal with the U.S. to bring tariffs on UK pharmaceuticals and medical devices to zero. Britain pledged the rebate rate payable by drugmakers under the VPAG scheme, would not exceed 15% in the deal's first 3 years.
In light of that framework agreement, announced last week, the UK government said the headline percentage drugmakers would need to pay back to the NHS in 2026 for eligible sales of newer medicines under VPAG would be set at 14.5%.
The Association of the British Pharmaceutical Industry (ABPI) said the rate compared to a record 22.5% set for 2025, but payment rates for older branded medicines were unchanged for 2026 at between 10% and 35%.
"It's good that the amount of revenue companies will need to pay to the UK government has come down in 2026," ABPI Chief Executive Richard Torbett said in a statement, adding the proposed 15% cap should give firms more certainty but adding it was just a first step in making Britain more competitive.
"Payment rates remain much higher than in similar countries, and there is work to do to accelerate the NHS's adoption and use of cost-effective medicines to improve patient care."
U.S. President Donald Trump has said European countries should pay more for drugs. Under the U.S. deal, Britain will change how it values new medicines, as it has previously rejected coverage of new, expensive drugs through the NHS.
(Reporting by Alistair Smout; Editing by Alexander Smith)
A rebate is a return of a portion of the purchase price by the seller to the buyer, often used as an incentive to encourage purchases.
Drug pricing refers to the process of determining the price of medications, which can be influenced by factors such as production costs, market demand, and regulations.
Explore more articles in the Headlines category
