Drugs: VAT
The question
To ask the Secretary of State for Health and Social Care, what assessment he has made of the potential risk that pharmaceutical companies could withdraw compassionate access programmes due to VAT-related financial pressures.
Answered by Preet Kaur Gill
The Government recognises the important role that compassionate and expanded access programmes can play in enabling patients, particularly those with serious or rare conditions, to access innovative medicines outside routine commissioning arrangements.
VAT treatment in the United Kingdom is governed by long-standing principles, including that where goods are supplied for non-business purposes or free of charge in certain circumstances, a taxable supply may arise. There is no specific VAT exemption for medicines provided through compassionate or expanded access programmes.
The Department has not made a formal assessment of the risk that pharmaceutical companies may withdraw such programmes specifically due to VAT-related costs. However, we are aware of concerns raised by industry and stakeholders about the potential impact on patient access.
We continue to engage with HM Treasury, HM Revenue and Customs, and the pharmaceutical industry to understand these issues and their implications for patients.
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