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Price of branded medicines: clarification of regulations

Clarification of the statutory scheme regulations for the price of branded medicines supplied to the NHS.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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The Department of Health wishes to clarify the application of the Health Service Branded Medicines (Control of Prices and Supply of Information) (No.2) Regulations 2008 as amended to certain framework agreements tendered under European and UK procurement law.

The Health Service Branded Medicines (Control of Prices and Supply of Information) (No.2) Regulations 2008 were amended by the Health Service Medicines (Control of Prices and Supply of Information) (Amendment) Regulations 2013. The 2013 Regulations introduced a limit on the maximum price which may be charged for the supply of a presentation to the price at which that presentation was on sale for health service purposes on 1 December 2013 less 15%, without regard to any discount or other variation in price which did not have general application on that date.

The Department has reviewed the impact of European and UK procurement law on the regulations and has concluded that the price cut under the 2013 regulations does not apply to any presentation:

  • which is procured under one or more framework agreements under the Public Contracts Regulations 2006 (as amended) that were entered into on or before 31 December 2013 and/or that were entered into following a tender which closed on or before 31 December 2013
  • where the price specified under such framework agreement is more than the price at which that presentation was on sale for health service purposes on 1 December 2013 less 15% (without regard to any discount or other variation of the price which did not have general application on that date).

The effect of this interpretation is specifically limited to transactions called off such frameworks and only until the end of the relevant framework agreement.

Any company that considers that it is affected by this clarification of the regulations should contact the Department of Health at PPRSContact@dh.gsi.gov.uk by 1 January 2015 to ascertain whether any of their presentations were affected. The department will then advise whether the prices of any presentations may be increased and whether any compensation is due for the period during which the price was reduced.

Compensation will be strictly limited to transactions called off frameworks as set out at paragraph 3 above, for sales from 1 January 2014 up to the point at which the framework ended, or if it is still extant, up until the next price review point following this notification, when the company could have increased the price in agreement with the department as outlined in paragraph 4 above.

The department will require detailed evidence that the sales concerned meet the criteria set out at paragraph 3 above, and invoices for each sale for which the company is seeking compensation.

Published 6 November 2014