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Compassionate Use Medicine Schemes: VAT
11 June 2026
Lead MP
Karin Smyth
Debate Type
Ministerial Statement
Tags
TaxationNHS
Other Contributors: 7
At a Glance
Karin Smyth raised concerns about compassionate use medicine schemes: vat in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
It is vital for patients to have access to innovative medicines swiftly, especially in cases of unmet clinical need or lack of alternative treatment. The National Institute for Health and Care Excellence and the Medicines and Healthcare products Regulatory Agency are being streamlined to expedite patient access to new, safe, and effective medicines. Early access and compassionate use programmes can facilitate quicker access to these treatments but remain commercial decisions by pharmaceutical companies. Concerns have been raised about VAT applying to such donations due to established tax rules, despite no direct payment. The government is working with the Treasury and HMRC to explore solutions while engaging constructively with stakeholders to ensure British patients benefit from innovative medicines.
Caroline Johnson
Con
Sleaford and North Hykeham
Question
Compassionate use schemes provide hope for desperate patients. However, the recent imposition of VAT has caused significant distress, with companies like Bayer withdrawing from the programme due to financial burdens. This delay could cost lives, as treatments are at risk. The government must act swiftly.
Minister reply
The rules had been in place long before this Government took office and we inherited them. We have engaged with industry and partners across the Government to address concerns, including VAT on donated medicines. A range of options is being considered without making pre-emptive decisions.
Question
The pause introduced by HMRC was welcomed but charities like Sarcoma UK are asking for a permanent solution. Will the Minister invite a Treasury Minister to meet with such charities to understand their concerns better?
Minister reply
No decisions have been made and we continue to engage on this issue, including with all interested parties.
Question
The changes have caused significant uncertainty and poor communication from HMRC. The Government must ensure a workable long-term solution for pharmaceutical companies so that patients do not lose access to potentially life-extending drugs.
Minister reply
We engage with the sector regularly and will continue to work with bodies across the life sciences, patients, NHS, HMRC, and Treasury.
Question
Why has the Government decided to apply VAT now when these rules have been around for 30 years?
Minister reply
These are long-standing rules and we continue to engage on the issue with deep concern for patients with unmet clinical need.
Question
It is shameful that this Government imposes VAT on drugs donated for compassionate use. Was it the Health Secretary who signed off these changes when he was in the Treasury?
Minister reply
The hon. Gentleman's last comment reveals exactly why he raises this issue.
Jim Shannon
DUP
Strangford
Question
Hon. Members have raised concerns for compassionate reasons and on behalf of their constituents who feel the pain. Compassionate access schemes are a critical lifeline for terminally ill patients, often stepping in when the NHS has exhausted all standard funding avenues. Any move by HMRC to levy, to barter or to impose deemed supply VAT on free clinical treatment places an unacceptable risk on voluntary patient provision. I say this kindly, but will the Minister ensure that the Treasury works collaboratively with the devolved health Executive to create a permanent and water-tight VAT exemption, so that no patient, regardless of their postcode, is left behind and compassion is a UK-wide attribute, not a postcode lottery?
Minister reply
The hon. Gentleman works very hard in this area. He is right to use the word “compassion”, because that is exactly how we must approach the issue for patients who have an unmet clinical need and are desperate for innovation. That is why we are putting our collaboration and work with the life sciences sector front and centre and working closely with HMRC. My hon. Friend the Exchequer Secretary to the Treasury is on the Treasury Bench listening attentively to the issues and we will continue to work together. They are long-standing rules. As the hon. Gentleman would acknowledge, we have made huge progress in this area for patients in this category, particularly with our revision of the National Institute for Health and Care Excellence threshold, and we will continue to do so, on behalf of the patients we all want to help.
Shadow Comment
Caroline Johnson
Shadow Comment
As a paediatrician, compassionate use schemes are critical for patients without other treatment options. The recent imposition of VAT on donated drugs has caused significant distress, with companies like Bayer withdrawing from the programme due to financial burdens. This delay in resolving the issue could affect patient access and trial attractiveness in the UK. Questions raised include how much revenue this VAT is expected to generate, why urgent issues are not prioritised over less critical ones, and who signed off on these changes.
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