The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) is the agreement between the UK government, NHS England and the pharmaceutical industry that controls NHS spending on branded medicines. Running from 1 January 2024 to 31 December 2028, it requires member companies to pay back a percentage of their NHS sales when spending grows faster than agreed.
VPAG replaced the 2019 Voluntary Scheme for Branded Medicines Pricing and Access (VPAS). It was negotiated by the Department of Health and Social Care (DHSC), NHS England and the Association of the British Pharmaceutical Industry (ABPI), and covers branded medicines, including biological medicines, sold for NHS use across the UK. Companies that do not join are covered by the statutory scheme, which is set in regulations and kept broadly equivalent.
The newer medicines rate rose from 15.1% for most of 2024 to 22.9% in 2025. An accelerated review ended without agreement in August 2025. In December 2025, the UK-US arrangement on pharmaceutical pricing capped the rate at 15% for the rest of the scheme, and the 2026 rate was set at 14.5%, or 15.5% including the Investment Programme. The statutory scheme rate was cut to 16.5% from July 2026.
The NICE cost-effectiveness threshold rose to £25,000 to £35,000 per quality-adjusted life year in April 2026, and the scheme commits not to recover the resulting extra spending through future payment rates. The government also aims to raise spending on new medicines from 0.3% to 0.6% of GDP by 2036. Government and industry have agreed principles for a successor scheme, including a seven-year term, but its terms have not been published.
VPAG payments are a direct deduction from UK revenue, so the level and predictability of the rate feed into launch timing, pricing and investment decisions. The sliding scale for older medicines also shapes lifecycle and portfolio planning as products approach loss of exclusivity.
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