Pharma industry says UK pricing revenue unsustainable, blocking investments

By Maggie Fick

LONDON, March 20 (Reuters) - The pharmaceutical industry on Thursday blasted the UK government's levy that aims to curb the national health system's drugs bill, arguing it is unsustainable and is halting companies from making future investments in the country.

The Association of the British Pharmaceutical Industry, including big pharma companies AstraZeneca AZN.L, Roche ROG.S and Pfizer PFE.N, said in a joint statement that the five-year agreement reached with the government in late 2023 needed to be fixed because companies cannot afford the record rebates they are paying to the National Health Service (NHS) England.

The industry group said the medicines access scheme known as VPAG, or Voluntary Scheme for Branded Medicines Pricing, Access and Growth, is forcing them to pay between a quarter and a third of revenues from drug sales in the country back to the NHS. That percentage is up from around 5% of revenue that companies paid in 2021, under a previous agreement.

The UK government is highlighting life sciences as one of the sectors with the biggest growth potential and intends to make it a core element of its new industrial policy. The ABPI said that plan will fail without changes to the clawback scheme.

Relations between the pharma industry and the government over the scheme and other policies have long been contentious.

British drugmakers GSK GSK.L and AstraZeneca have for years criticised the UK business investment climate. AstraZeneca in January scrapped plans to invest 450 million pounds ($584.96 million) in its vaccine manufacturing plant in northern England, citing a cut in government support.

($1 = 0.7693 pounds)