Paul Doyle/ Alamy Stock Photo
The government has announced that the levy that drugs manufacturers must pay under the UK’s statutory scheme for branded medicines has been reduced to 16.5% — down from the 24.3% levy that was set in July 2025.
In a report on the outcome of a consultation on changes to the payment percentage of the reduced statutory scheme levy, published on 10 June 2026, the Department of Health and Social Care (DHSC) noted that the US–UK trade deal on pharmaceuticals “agreed to update the statutory scheme to ensure broad commercial equivalence with [Voluntary Scheme for Branded Medicines Pricing, Access and Growth] VPAG”.
The statutory scheme — which is one of two schemes, the other being VPAG — requires manufacturers to pay a government levy on sales of branded medicines to the NHS. There is a cap on allowed growth in sales, while sales above this cap are subject to the levy.
The US–UK trade deal states that the UK must keep the VPAG repayment rate to 15% or below — the rate currently sits at 14.5%.
The 16.5% levy will take effect from 1 July 2026, but companies that have already made payments this year under the previous, higher levy, will pay a reduced rate of 8.7% for the rest of this year, the DHSC said.
Following the consultation, the DHSC also said that it will change how it undertakes future consultations on the issue of payment levies.
In addition, the DHSC plans to take a “direct engagement” approach via a workshop with DHSC officials and stakeholders including the BioIndustry Association (BIA) and the Association of the British Pharmaceutical Industry (ABPI).
In its response to the consultation, the BIA said that although it supported the idea of broad equivalence between VPAG and the statutory scheme, “we cannot agree with the rates set in both the statutory and voluntary schemes, as these are significantly higher than comparable European countries and damage UK competitiveness”.
“[The] impact for small and medium-sized biotech companies is particularly high, many of which only have a single licensed indication and no other revenue streams,” it added.
In a LinkedIn post on 10 June 2026, the ABPI said that the DHSC’s new approach to engagement “still includes an option to submit written evidence, ensuring anyone has the opportunity to have their say”.
