Danny Beales

I begin by welcoming the Government’s decision at the start of the summer to pause the application of VAT on medicines donated for free to patients through compassionate access, early access and related schemes. The health charities, patients and industry bodies that I have worked with are grateful to Ministers for recognising that this issue needs to be addressed, and in particular for the ministerial statement setting out the Government’s intention to introduce a new approach to VAT on free-of-charge donations of medicines. I know that my right hon. Friend the Financial Secretary to the Treasury, and previously my hon. Friend the Exchequer Secretary, have both worked a great deal on this issue. I thank them for their commitment to find a resolution. Without a permanent solution, however, pharmaceutical companies do not have the legal certainty to fully re-engage with early access programmes. Although, to date, only Bayer has withdrawn from these schemes outright, I have heard from a number of other companies that tell me that the uncertainty is causing them to reconsider, drug by drug, whether they can afford to continue offering free access, for fear of creating open-ended VAT liabilities. Tragically, the people who are paying the price for the delay are patients. I know that the Government recognise the consequences for patient outcomes, which is why they have committed to bringing forward a new approach, either through changes to VAT rules or through a reimbursement scheme. I welcome the fact that the new approach, once introduced, will apply to donations made on or after 23 June 2026. However, a pause is simply not good enough to resolve this issue fully. I called for this debate to ask the Government to reconfirm their commitment to find a permanent solution and to ask them to move forward as quickly as possible in determining that comprehensive solution.