The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) requires companies to make payments to the government based on a percentage of their sales of branded medicines to the NHS.

The 2026 payment percentage will be 14.5% - down more than a third from 22.9% in 2025 - in part driven by falling costs, including drugs going off patent, so lower revenues can be absorbed within existing budgets.

This lower rate will make the UK a more attractive destination for clinical trials, manufacturing investment and the early launch of new medicines.

Health innovation minister, Dr Zubir Ahmed, said: ‘This government has already delivered an agreement with the US that will expand access to tens of thousands of patients and make us the only country in the world to have a deal that secures zero percent tariffs on branded pharmaceuticals to the US.

‘The fall in the rebate rate will cement this, answering the call from leaders in the pharmaceuticals and life sciences sector for a lower and more stable payment rate for branded medicines.

‘Together, this will help secure and drive investment in the sector, ensuring Britain remains a powerhouse for life sciences for the benefit of our patients, our NHS and our economy.'

Science minister Lord Vallance added: ‘Innovative medicines have turned HIV, heart disease, certain cancers and many other diseases into preventable, manageable, and sometimes even curable conditions.

‘We need our brilliant life sciences companies to discover and get important new medicines to patients right across the NHS and to create jobs in the UK. This new rate helps achieve that, and will be part of helping countless people live healthier, longer lives.'