The Chancellor of the Exchequer, John Healey, has announced in today’s Budget a permanent VAT exemption for medicines that pharmaceutical companies give free of charge through compassionate and early access schemes.
Sarcoma UK, the bone and soft tissue cancer charity, has welcomed the decision, which removes a threat to schemes that give patients with serious illnesses access to medicines not yet available on the NHS, free of charge to the NHS.
In recent years, HM Revenue & Customs began applying VAT to drugs given free of charge, saying the tax had always been due but the legislation had not been implemented.
The extra cost led the pharmaceutical company Bayer to stop enrolling new patients onto its UK compassionate access scheme, and there were fears that other companies would follow. In June, the Government announced that it was considering either changes to the VAT rules or a reimbursement scheme, with the new approach to be backdated to June 2026, but since then it hadn’t published any further details until the Budget today.
Richard Davidson, Chief Executive of Sarcoma UK, said: ‘This is an immense relief to the sarcoma community. Compassionate access schemes are not an add-on or a luxury for patients with sarcoma. For many, they are the only route to treatment. If more companies had followed Bayer and withdrawn, then further people would have lost access to medicines that could extend their lives. We are grateful to the Chancellor, and to the MPs who carried our concerns to Government, for giving these schemes certainty.’
Maddie Cowey was diagnosed with incurable alveolar soft part sarcoma more than ten years ago. It has spread to both lungs. She is on a compassionate use treatment. She said: ‘There are no approved treatments for my type of sarcoma in the UK, and so my survival is completely reliant on clinical trials and compassionate use drugs. This has often felt very scary, lonely and hopeless. This change will benefit many patients like me who are living with rarer sarcomas and have no other treatment options. These schemes are a lifeline, and any threat to them would have been devastating.’
Sarcoma UK’s Policy and Public Affairs team has been campaigning on this issue for many months. We heard first-hand how it was affecting sarcoma patients and the care that oncologists could give, and we’ve been raising the issue with MPs from across the political parties in the House of Commons, who have helped us highlight to Ministers how urgent it is that the Government finds a better and fairer way forward, to ensure that people with rare cancers can get access to the life-saving treatments they need under compassionate access.
Andy French, Policy and Public Affairs Manager at Sarcoma UK, said: ‘When HMRC began applying VAT to free-of-charge drugs, it was not clear that anyone had considered what it would mean for patients with rare cancers. Our job was to make sure ministers understood. We took the evidence to MPs from both sides of the House, and they took it further, into the Commons and to Government. We are proud of the part we played, and glad that the sarcoma community’s voice was heard.’
