Viatris might be the next to step out of the U.K.’s medicines pricing agreement, warning that it will stop selling some of its essential medicines in the U.K. unless the British government makes changes to the program.
The 2019 agreement, called the U.K.’s Voluntary Scheme for Branded Medicines Pricing and Access, sets a limit on the National Health Service’s annual drug spending and requires pharma companies to refund any sales beyond established thresholds.
Since healthcare costs have ballooned during the pandemic, the payback rate has jumped from 5% in 2019 to 26.5% this year.
Coupled with an already challenging business environment, the tax is only making matters worse, Viatris’ U.K. country manager Matthew Salzmann told Reuters.
The company estimates that it will pay the British government 60 million pounds sterling ($71.62 million) through the arrangement this year.
If Viatris does leave the scheme, it wouldn't be the first. In January, both AbbVie and Eli Lilly ditched the agreement due to the spike in repayment rates.
Todd Manning, AbbVie’s general manager in the U.K., said in a statement at the time that the “unsustainable high levy” meant AbbVie and others were having to make “incredibly difficult decisions” on U.K. investments.
Separately, AstraZeneca CEO Pascal Soriot last month blamed the U.K.'s “discouraging” tax rate for the company's decision to build a $400 million API facility in Dublin instead of England.
“We’re very committed (to the U.K.), but we need to see also supporting policies for the whole industry,” Soriot said at the time.
Local trade group the Association of the British Pharmaceutical Industry (ABPI) has already proposed changes to the scheme for 2024. The organization said its proposed framework would deliver a more sustainable approach to medicines provision and would maximize the potential of the U.K. life sciences industry.