Pharma responds to UK government Statutory Scheme rise

The UK government has confirmed its plans to go ahead with the intended Statutory Scheme rate rise. This means the revenue clawback rate paid by pharmaceutical companies subject to the Statutory Scheme for branded medicines will increase from 24.4 percent to 27.5 percent.

The Association of the British Pharmaceutical Industry (ABPI) and Lilly and Company have responded, emphasising the plans are not supportive to life sciences sector.

The Statutory Scheme is one of two schemes that control the prices of branded medicines to the NHS. Any company that supplies licensed branded medicines to the NHS is subject to the statutory scheme unless they opt to join Medicines Pricing and Access (VPAS). Through the schemes, the government intends that medicines are supplied at an affordable price both in the life sciences sector and the broader economy.

Impact of the increased Statutory Scheme rate rise

According to the ABPI, research shows that sustaining such high rates for another five years would result in a total loss of £50 billion to UK GDP by 2058. Retaining high rates up to 2033 would mean foregoing a further £90 billion of GDP and £29.9 billion in associated tax revenues up to 2058.

The government has confirmed its plans to raise the revenue clawback rate paid by pharmaceutical firms subject to the Statutory Scheme for branded medicines from 24.4% to 27.5%. https://t.co/FQmodSU9rM

— ABPI (@ABPI_UK) March 2, 2023

Richard Torbett, Chief Executive at the ABPI commented that the plans to increase the payment rate “is very disappointing”, and warned, based on research published this week, “such rates impact company investment decisions and have a detrimental economic impact.”

The government stated the changes are expected to result in savings to the NHS of between £17 million and £19 million by 2023. However, Laura Steele, President and General Manager, Northern Europe, Lilly and Company shared: “The decision to increase an already sky-high clawback rate undermines the UK’s ambitions to be a ‘science superpower’, and Government’s commitments to foster an environment for life sciences innovation.”

“We remain committed to partnering with the Government, NHS and wider industry to find a solution. With so much to gain for UK patients, we simply must repair the current medicine pricing scheme,” Steele concluded.