The UK has confirmed a lower statutory branded-medicine payment percentage for newer medicines, implementing the final version of a rate cut first proposed in February. The change affects companies outside the 2024 Voluntary Scheme for Branded Medicines Pricing, Access and Growth, VPAG, and resets the statutory scheme after the 2026 VPAG rate fell sharply.
The Department of Health and Social Care, DHSC, published its consultation response on 10 June 2026. It confirmed that the headline statutory-scheme payment percentage for newer medicines will be 16.5% for 2026 and future years, subject to future review.
Because the amendment will take effect mid-year, the 2026 mechanics are more specific. Companies that paid at 24.3% between 1 January and 30 June 2026 will pay 8.7% from 1 July to 31 December 2026. DHSC intends this to produce a full-year average rate of 16.5%.
The same day, DHSC laid the Branded Health Service Medicines (Costs) (Amendment) Regulations 2026 before Parliament as SI 2026/614. The instrument comes into force on 1 July 2026 and amends the Branded Health Service Medicines (Costs) Regulations 2018.
The decision sits within the UK-US pharmaceutical trade arrangement, announced on 1 December 2025 and finalised in April 2026. The arrangement committed the UK to increase the net price paid by the National Health Service for prospective new medicines by 25% from April 2026. It also required that this increase should not be offset by higher portfolio-wide rebates under VPAG, the statutory scheme or successor arrangements.
The consultation ran from 10 February to 21 April 2026 and drew 16 responses. DHSC reported that 81% of respondents disagreed with the proposed payment percentage, while 56% supported the principle of broad commercial equivalence between the statutory scheme and VPAG. Industry respondents argued that the rate remained too high and could weaken the UK commercial environment.
DHSC rejected those objections and kept the 16.5% rate. The final decision lowers the statutory-scheme burden for the second half of 2026, while preserving a differential that keeps VPAG financially preferable for most companies. It also confirms that UK branded-medicine spending controls are being recalibrated around both domestic affordability and the commercial commitments made under the UK-US arrangement.
Source: Department of Health and Social Care; UK Parliament
Link: Response to consultation on changes to headline payment percentage and approach to consultations of the statutory scheme to control the cost of branded health service medicines; Branded Health Service Medicines (Costs) (Amendment) Regulations 2026
Date: 10 June 2026
