Setting current on Diodes Inc PAM2863 LED driver IC, with external resistor AND driving different voltage to VSET
in page 4 of the datasheet, it is mentioned that the maximum voltage on the Vset pin = 2.5V. As with any IC you do not want to apply higher voltages then recommended on any of the pins. 

So, try using a voltage divider on the output of your microcontroller.