VPAG
The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) is a five‑year agreement (2024–2028) that caps NHS spending on branded medicines. It is negotiated between the Department of Health and Social Care (DHSC), NHS England and the Association of the British Pharmaceutical Industry (ABPI). Nearly half the products in the present scheme are branded generics or biosimilars.
What VPAG means for off-patent products
During the negotiations on the current scheme, Medicines UK called on the government to recognise that off-patent products already have their prices constrained by competition and not to continue with a one-size-fits-all system.
As a result, for the first time ever, VPAG included a differentiated rebate structure for medicines based on their lifecycle stage. Older medicines – defined as those authorised more than 12 years ago – are now subject to differentiated rates ranging between 10% and 35% depending on the price reduction they provide. This policy aims to balance NHS affordability with supply sustainability, recognising the unique challenges faced by older products.
Future schemes
We believe that for the next scheme, biosimilar medicines and branded generics for which it is a regulatory requirement to brand should be excluded altogether, as even a reduced differentiated rate is in effect a double taxation on products whose prices are significantly constrained by free market competition.
The government has committed to making the UK a world-class destination for launching biosimilars, and a review of their inclusion in VPAG would be a significant demonstration of that sentiment.
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