Review of the scheme to control the cost of branded health service medicines
Download the full outcome
Detail of outcome
There were 102 responses to the consultation from a range of stakeholders across the UK.
The majority of the respondents thought that the government should maintain the policy of broad commercial equivalence between the voluntary and statutory schemes. However, the majority disagreed with the proposals related to allowed growth rate and payment percentages, and for a life cycle adjustment.
Having considered these consultation responses and wider engagement with key stakeholders, the UK government has therefore decided to:
- continue to operate the statutory scheme in a way that is broadly commercially equivalent to the voluntary scheme
- set amended payment percentages for 2024 to 2026 based on an allowed growth rate that has been increased to 2%
- implement an exemption from payment for medicines containing a new active substance
- include exemptions from payment for exceptional central procurements and centrally procured vaccines
Upon consideration of consultation responses, the government has decided not to implement the proposals for a life cycle adjustment in the statutory scheme.
However, we intend to consult on alternative proposals to maintain broad equivalence with the terms agreed in the 2024 voluntary scheme for branded medicines pricing, access and growth for setting statutory scheme payment percentages in a way that distinguishes between medicines at different stages in the product life cycle.
Detail of feedback received
A summary of responses received is contained within the government’s consultation response.
Original consultation
Consultation description
The statutory scheme is set out in legislation in the Branded Health Service Medicines (Costs) Regulations 2018 (the regulations). It is one of 2 schemes, alongside the 2019 voluntary scheme for branded medicines pricing and access (VPAS), that control the prices of branded medicines to the NHS. The 2019 VPAS agreement expires at the end of 2023.
The Department of Health and Social Care is negotiating to agree with industry a successor to VPAS to take effect from 1 January 2024.
The government is proposing updates to the statutory scheme to make sure that the scheme can continue to meet its objectives from 2024 onwards, whether this is alongside a successor voluntary scheme or as a standalone scheme in the absence of this.
The consultation sets out proposed amendments in 3 main areas:
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increasing the allowed growth rate, which will have the effect of changing the payment percentages
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revising which sales of branded medicines are exempt from scheme payments
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a new approach to control spending on older branded medicines (the ‘life cycle adjustment’)
Documents
Last updated 4 December 2023 + show all updates
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Added the government's response to this consultation and final impact assessment.
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Updated the 'Exemptions' section of the 'Proposed review of the 2023 scheme to control the cost of branded health service medicines' to correct for an incorrect reference to ‘exceptional central procurements’ (ECPs) in a paragraph discussing centrally procured vaccines (CPVs) and an incorrect reference to CPVs in a paragraph discussing ECPs. Updated the impact assessment with a corrected version: on page 4 the policy option was labelled 2b, it is now correctly labelled 1b.
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First published.