A U.K. government proposal to raise mandatory rebates that drug companies are required to pay to bolster the National Health Service has sparked criticism from an industry trade group, which argues the move will undermine efforts to make life sciences a key pillar of the economy.

At issue is a program called the statutory scheme, which was created several years ago and is one of two initiatives in which the government uses rebates to cap the cost of brand-name medicines for the NHS. However, the programs have grown controversial, partly because the rebates had historically been in the single-digit percentages but rose sharply during the Covid-19 pandemic.

Medicines represent the second-highest proportion of NHS spending, and were worth approximately $27 billion in England in the 2023-to-2024 financial year, $18.6 billion of which was on spent brand-name medicines, according to the government. Price control schemes are used to cap the cost of brand-name medicines, but prices of generic drugs are usually left to the marketplace.