Voluntary Scheme on branded medicines

What is the Voluntary Scheme?

The Voluntary Scheme is an agreement between the UK government, the NHS and the pharmaceutical industry.

It is one of the many longstanding policy tools used in the UK to ensure the NHS gets the best possible value from the medicines it uses. It operates alongside health technology assessments, the budget impact test and all existing mechanisms to encourage market competition for medicines such as procurements and tenders.

The scheme ensures the NHS doesn’t overspend its allocated branded medicine budget—even if it ends up using more medicines than forecast. To achieve this, the pharmaceutical industry commits to returning NHS overspend in the form of sales rebates. We will explain how this works in the current scheme in the following web pages.

The 2024 Voluntary Scheme for Branded Medicines Pricing and Access (VPAG)

The 2024 VPAG is the current Voluntary Scheme. This agreement came into force in January 2024 and will run until the end of 2028.

The agreement seeks to strike a balance which:

• gives the NHS predictability and stability in its branded medicine expenditure
• ensures UK patients can access the latest cost-effective medicines
• incentivises investment in UK life science innovation, research, and development.

There have been Voluntary Schemes for medicines pricing in one form or another for around 70 years, and although there is no direct equivalent of the UK Voluntary Scheme in any other country, many do have national pricing controls in place.

The agreement is formally negotiated between the Department of Health and Social Care (DHSC) on behalf of all nations of the UK, NHS England; and the ABPI, which is the representative body on behalf of branded medicine pharmaceutical industry in the UK.

All companies selling branded prescription medicines in the UK are able to be members of the Voluntary Scheme but are not required to do so. Once they join, companies remain in the scheme and any decision to leave in the following year must be made three months before the calendar year ends.

The Statutory Scheme for branded health service medicines

Companies that do not choose to join/remain in the Voluntary Scheme are subject to the Statutory Scheme for branded medicines.

This Statutory Scheme is intended to be broadly commercially equivalent to the Voluntary Scheme. However, as it is set out in legislation, changes can be made at any point after a short public consultation. Therefore, it does not provide the same stability as the five-year Voluntary Scheme. It also does not contain many of the positive ecosystem-wide improvements the Voluntary Scheme commits to, which are the result of detailed co-creation and agreement between the government, NHS, and industry.

Over the following pages, we will provide a simplified introduction to the key elements of the 2024 VPAG. However, if you require further details, please refer to the full agreement text or contact us for additional information.