U.K. pharma lobby urges govt. to halt plans to raise revenue recovery rates (NYSE:ABBV)

A trade group representing the pharma industry pressed the U.K. government on Thursday to scrap plans to increase revenue repayment rates for drugmakers, arguing that the move will hurt innovation at a time when the sector is “already facing significant challenges.”

The disagreement relates to the U.K.’s Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) under which there are limits to the growth of branded medicine sales to the country’s National Health Service (NHS), and companies should refund excess revenue over the limit.

The Association of the British Pharmaceutical Industry (ABPI), the representative of the 2019 deal, argued that plans are underway to raise the statutory revenue clawback rate from 24.4% to a record 27.5%.

ABPI, whose members include the likes of GSK (GSK), Pfizer (PFE), JNJ (JNJ), Amgen (AMGN), and AstraZeneca (AZN), noted that the “proposed rate is nearly three times what firms may have anticipated just a few years ago.”

The average payment rates stood at 10.6% over the past four years, ABPI added, urging the government to leave the rates unchanged for negotiations to take place on a new scheme.

ABPI asked the current rates to be terminated at the year-end “to prevent it from further depressing future long-term life science investment in the U.K.”

“A new, appropriate rate can be set at the end of the year once a new framework is in place,” ABPI added.

Previously, AbbVie (NYSE:ABBV) and Eli Lilly (NYSE:LLY) left the VPAS protesting the proposed rate hikes.