Published 18 March 2024
Last updated 18 October 2024 — See all updates
This consultation has concluded
Read the full outcome
Consultation
response
Impact assessment: update to the
statutory scheme to control the cost of branded health service
medicines
Detail of outcome
There were 30 responses to this consultation. The majority (87%)
of these responses were from pharmaceutical companies or trade
bodies.
Following detailed consideration of consultation responses, the
department has decided to maintain broad commercial equivalence
with the voluntary scheme by implementing the following
changes:
- adjusting baseline sales in the statutory scheme by £150
million in 2025, £330 million in 2026, and £380 million in
2027
- introducing a differentiated approach to setting payment
percentages for newer medicines and older medicines
- setting the headline payment percentage for newer medicines
at 15.5% in 2025, 17.9% in 2026 and 20.1% in 2027
- setting the basic payment percentage for older medicines at
10.6% in 2025, 11% in 2026 and 10.9% in 2027, with a top-up
payment percentage for older medicines of between 1% and 25%, if
applicable, based on the level of observed price erosion from a
reference price
- introducing exemptions to the top-up payment percentage for
relevant plasma derived medicinal products and company sales that
total less than £1.5 million of a health service medicine in a
particular virtual therapeutic moiety (VTM) each year
- increasing the exemption threshold from scheme payments for
small companies, from sales below £5 million to sales of less
than £6million
Due to delayed implementation and subsequent availability of Q1
2024 sales data (leading to revisions in forecasts for newer
medicines and parallel import sales), the payment percentages
that the department intends to implement are different to those
consulted on. Additionally, these figures extend to 2027 to
reflect scheme implementation from Q1 2025 as opposed to Q3 2024.
More information on why these changes were required can be found
in Annex G of the accompanying impact assessment.
The policy intent has not changed.
Original consultation Summary
This consultation seeks views on proposals to update the
statutory scheme to control the cost of branded health service
medicines.
This consultation ran from
4pm on 18 March 2024 to 11:59pm on 26 April 2024
Consultation description
The statutory scheme is set out in legislation in The Branded
Health Service Medicines (Costs) Regulations 2018. It is one
of 2 schemes, alongside the 2024 voluntary scheme for branded
medicines pricing, access and growth (VPAG),
that control the costs of branded medicines to the NHS.
VPAG was agreed in late 2023 and replaced the 2019
voluntary scheme for branded medicines pricing and access from 1
January 2024.
The government is proposing updates to the statutory scheme to
maintain broad commercial equivalence with
VPAG. The consultation proposes to introduce
a differentiated approach to setting payment percentages for
newer medicines and older medicines, and includes proposals on:
-
defining older and newer medicines
-
setting the headline payment percentage for newer medicines
-
setting the basic payment percentage and top-up payment
percentage for older medicines
-
calculating the price decline of older medicines
The consultation also proposes increasing the threshold for an
exemption from scheme payments for small companies.
Documents
Proposed update to the statutory
scheme to control the cost of branded health service
medicines
Impact assessment: proposed
update to the statutory scheme to control the cost of branded
health service medicines
