Question to the Department of Health and Social Care:

To ask His Majesty's Government, further to the Written Answers by Lord Markham on 27 June (HL8632, HL8633), what is their response to the claim by the Association of the British Pharmaceutical Industry that international investors are "abandoning UK life sciences as excessive revenue clawback rates start to bite".

The Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) payment percentages have been at or below those projected when the scheme was agreed. Recent increases to payment percentages reflect the scheme working as intended to adjust for increased sales of branded medicines to the National Health Service, which is the result of the positive access and uptake environment within the NHS.

The VPAS agreement was described as a “pro-innovation deal” by the Association of the British Pharmaceutical Industry who negotiated and signed the deal on behalf of the whole pharmaceutical industry in the United Kingdom.

There are several factors which influence company investment decisions in any country or region. Available evidence suggests that supply side factors, such as availability of expert scientific labour and favourable tax conditions, are of greatest significance in the decision on future investment. However, we understand that price regulation schemes such as VPAS may be a consideration in the decision to locate some investments, which is why we are committed to agreeing a successor voluntary scheme to VPAS that supports a strong UK life sciences sector.