Last week, during the Autumn statement, it was announced that a monumental agreement had been made between the government, National Health Service (NHS) and pharmaceutical industry that would revolutionise access to life-saving treatment and drive innovation and development in the UK life sciences industry. This deal comes as part of the voluntary scheme for branded medicines pricing, access and growth (VPAG), which aims to improve patient outcomes and secure financial sustainability for the NHS.
In this article, we take a closer look at the VPAG and the impact it will have on the NHS and the patients it serves, as well as the growth and security of the life sciences sector. As a healthcare communications agency, we understand the critical role that medical marketing plays in shaping the perceptions and strategies of healthcare brands, and we’re keen to explore how VPAG will influence this dynamic.
Potential to save BILLIONS
It is no secret that the NHS is facing some of its hardest financial challenges since its inception. Factors associated with rising healthcare costs, budgetary constraints and infrastructure investment have pushed the NHS to its breaking point where an immediate need for financial support is paramount in ensuring its ability to function efficiently.
Under this new agreement, it seems that help is on the way. With the introduction of the new VPAG it is projected that the NHS is set to save billions – £14 billion to be precise – in medicine costs over its 5-year lifecycle, improving access to affordable life-saving treatments.
Between 2022 and 2023 the NHS spent an eye-watering £19.2 billion on medicines, of which £14 billion was associated with branded medication. With this new agreement, an annual cap has been introduced to the total allowed sales value of branded medicines to the NHS each year. Sales above the cap are paid back to the government via a levy, rising from 2% in 2024 to 4% in 2027, which will be reinvested in the healthcare system.
This strategy has been introduced to not only deter overspending on branded medication but to also drive competition and create an environment that encourages R&D and innovation.
Supporting the future of the NHS
There is a constant push for the NHS to become more efficient and productive in delivering healthcare services through streamlining processes, training its workforce and adopting new treatments and technologies – all of which have been a challenge over the past 5-years.
In addition to ensuring the affordability of vital branded medicines, this new deal focuses on supporting the NHS’s structural sustainability and longevity by driving workforce growth, maximising the speed and capacity of the uptake of new treatments and addressing one of the biggest burdens to the NHS – waiting lists. Making the UK a world leader in driving forward innovative healthcare.
More importantly, it also recognises the importance of NHS and industry cross-collaboration in helping build a future healthcare system that has the capacity and resources to work symbiotically with industry on science and research to support innovation and economic growth.
Looking beyond the healthcare system
Over the past decade, the UK has committed to the rollout of its Strategy of UK Life Sciences with the vision of delivering future growth for the life sciences sector by strengthening clinical research and improving the speed and efficiency of innovative trials.
Most recently the government pledged to commit £520 million for life sciences manufacturing in response to building a stronger resilience for future health emergencies and positioning the UK as a global hub for life sciences innovation.
With the introduction of the new VPAG agreement, a further £400 million will be invested by the industry over the course of the next 5 years which will be ringfenced for pioneering clinical trials, accelerating manufacturing capacity and improving access and assessments of life-saving treatments.
This exciting new investment will come as a pleasant surprise to the life sciences community and will help accelerate the UK’s position as the largest life sciences hub in Europe, strengthening the country’s health, wealth and resilience.
In the healthcare PR space, we welcome this new deal and its capacity to revolutionise the NHS and patient outcomes. With the accelerated emergence of public health threats, such as COVID-19, it is important that there is universal access to life-saving treatments to treat the population quickly and efficiently.
Under the VPAG agreement, investments towards increasing the efficiency, scalability and sustainability in the manufacturing of new treatments offer a crucial piece of the jigsaw puzzle in creating a healthier and more resilient health ecosystem.
Let us help you make a difference
The announcement of the VPAG deal opens the doors to an array of exciting new possibilities for industry and life sciences organisations to rewrite and shape the future of healthcare in the UK.
As a healthcare communications agency that specialises in helping companies navigate the complexities of their industry, we can support you in being a crucial part of this monumental change and help make a healthy difference for your brand.
If you want to work with an agency that knows your market inside and out, get in touch.
