UK pharma sector warns of £11 billion R&D threat

The UK risks losing £11 billion ($14 billion) in pharmaceutical R&D investment by 2033 unless urgent reforms are made to high and unpredictable clawback payments imposed on medicine sales to the National Health Service, according to a new report commissioned by the Association of the British Pharmaceutical Industry (ABPI).

WPI Economics, which authored the report, modeled the impact of current rebate levels—set under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG)—and found that continued payment rates above 20% of UK revenues could significantly weaken the country’s appeal as a hub for life sciences.

Under the current VPAG framework, drugmakers are required to pay between 23.5% and 35.6% of their NHS revenues back to the government, a move many in the sector liken to an unlegislated tax. By comparison, equivalent clawbacks in France, Germany, and Spain remain below 8%.