Corporate report

2025 annual review of the Health Service Products (Provision and Disclosure of Information) Regulations 2018 and the Health Service Medicines (Price Control Penalties and Price Control Appeals Amendment) Regulations 2018

Published 10 February 2026

Review summary

This is the annual review of:

• The Health Service Products (Provision and Disclosure of Information) Regulations 2018 (the information regulations)
• The Health Service Medicines (Price Control Penalties and Price Control Appeals Amendment) Regulations 2018 (the penalties regulations)

The information regulations came into force on 1 July 2018. The main purpose of the information regulations is to require persons who manufacture, distribute or supply any UK health service products to record, keep and provide information to the Secretary of State about the purchase, supply, price and availability of those products in prescribed scenarios. They also require marketing authorisation holders and wholesalers to inform the Secretary of State about shortages and discontinuations of medicines.

Regulation 6 of the penalties regulations and regulation 36 of the information regulations requires the Department of Health and Social Care (DHSC) to review these provisions on an annual basis to assess that the regulations still meet the intended objectives of the regulations and that these objectives remain appropriate. DHSC acknowledges that this annual review is overdue since 2023. However, that time means that DHSC has been able to consider the implications for the information regulations in light of:

• developments in reimbursement policy
• more experience of using the data to support DHSC to help reduce medicines shortages and, where they do occur, manage them cost-effectively

By extension, this review also assesses the current frequency of review to better align the information regulations with what’s practicable and to allow sufficient time to gain more experience of operating the information regulations since any last review. This enables a more meaningful evaluation of the information regulations’ appropriateness in achieving their objectives. This review considers the extent to which the regulations have achieved their objectives from July 2022 to June 2025.

The objectives against which the information regulations are assessed are to:

• require information to be kept about sales and purchases of medicines, appliances and borderline substances
• improve the effectiveness of the community pharmacy reimbursement arrangements by requiring all suppliers to provide quarterly sales and purchase information
• enable the Secretary of State to request information about costs incurred with the manufacture or distribution of medicines and appliances
• support DHSC’s management of supply issues by requiring marketing authorisation holders to provide information on discontinuation and anticipated supply shortages

The information regulations created secondary legislation that replaced voluntary agreements that had limited effectiveness due to limited number of suppliers signing up. There was no leverage with suppliers if they did not provide data and the voluntary arrangements did not cover all of the market. The information regulations underpin the reimbursement arrangements to pay primary care dispensers for the medicines they dispense and medicine supply mitigation work to support patient access to medicine.

Although DHSC finds that the objectives remain appropriate, some amendments are required due to:

• DHSC’s experience operating the information regulations
• developments to primary care reimbursement policy
• the increasing need for a comprehensive view of supply to mitigate supply issues in a cost-effective way
• difficulties in enforcing the information regulations

The proposed amendments are to ensure that DHSC is able to obtain all the appropriate information to fulfil the information regulations’ purposes more effectively, with the aims to:

• improve the effectiveness and efficiency of the reimbursement arrangements, paying dispensing contractors fairly
• improve patient access to medicines and, in turn, increase taxpayer value for money

As part of this annual review, DHSC has identified several provisions that it would like to amend or add to the information regulations. The amendments or additions can be categorised into 3 distinct subheadings:

• reimbursement
• availability and value for money
• improved compliance regime

Alongside the publication of this annual review, DHSC is publishing a consultation for the proposed amendments. An overview of the proposed changes being considered includes:

• broadening the scope of data collection to enable the reimbursement price in the Drug Tariff of more products to be set using data and volume data from suppliers
• provisions to require data returns from pharmacy hubs to inform reimbursement prices
• requiring suppliers to notify DHSC of all new products and updates (for example, pack sizes and prices) to support accurate reimbursement
• expanding data requests to include products available both on prescription and for retail sale, enhancing supply overview to be able to prevent shortages and to take mitigating actions in the most cost-effective way when they do occur
• increasing and clarifying the scope for supply data requirements, especially where public health risks may arise, to enable timely and cost-effective mitigation of shortages
• amending references from ‘NHS Digital’ to ‘NHSBSA’ as the designated portal for submitting data, and similarly to update the specific delivery point for reporting supply issues and product discontinuations (currently the Discontinuations and Shortages (DaSH) portal)
• revising penalty arrangements for non-compliance and extending the frequency of the information regulation reviews to every 2 years

Hub and spoke dispensing allows the activities of dispensing to be split between 2 pharmacies of different legal entities (or one pharmacy and a dispensing doctor). One will be operating as a hub (this must be a pharmacy), concentrating on core dispensing activities such as assembly and labelling, making use of large-scale dispensing efficiencies such as automation. The other pharmacy (or dispensing doctor) will be operating as a spoke, dealing more with receiving the prescription and supplying the prepared medicines to the patient.

The NHS Business Services Authority (NHSBSA) is an arm’s length body of DHSC, responsible for providing platforms and delivering services that support the priorities of the NHS, government and local health economies. The DaSH portal is a system for market authorisation holders to inform DHSC about potential medicine supply issues (shortages or discontinuations).

The Health Service Products (Provision and Disclosure of Information) Regulations 2018

Aim and scope of the review

Regulation 36 of the information regulations requires the Secretary of State to carry out an annual review of the information regulations and publish a report with the conclusion of the review, which must:

• set out the objectives intended to be achieved by the information regulations
• assess the extent to which the objectives are being achieved
• assess whether those objectives remain appropriate
• if the objectives remain appropriate, assess the extent to which objectives could be achieved in another way that involves less onerous regulatory provisions

Overview of the information regulations

The Health Service Medical Supplies (Costs) Act 2017 amended the National Health Service Act 2006 (NHS Act 2006) to give the Secretary of State the power to make regulations requiring anyone manufacturing, distributing or supplying UK health service products to record, keep and provide information about those products. The information collected under these provisions may be used for the purpose of enabling or facilitating:

• the remuneration and/or payment of NHS chemists and primary medical service providers in, or in any part of, the UK
• the availability of products in, or in any part of, the UK and the assessment of whether the products represent value for money
• the cost control powers in the 2006 act

The information regulations came into force in 2018. Throughout this review, consideration was given to the application of the information regulations across Wales, Scotland and Northern Ireland. No changes to the current provisions were deemed necessary to exercise the existing arrangements with regard to the devolved governments.

The data provided in accordance with the information regulations includes:

• supply and purchase data of:
  • unbranded generic health service medicines
  • made and imported special health service medicines
• costs incurred by UK producers in connection with the manufacturing, distribution or supply of UK health service products
• the price and available quantities of health service medicines

This data substantiates the reimbursement arrangements by informing reimbursement prices set in the respective parts of the Drug Tariff that underpin significant NHS spending in primary care. It also informs DHSC’s work helping prevent supply issues and helps mitigate them in a cost-effective way when they do occur.

Reimbursement

Reimbursement arrangements are set out in the Drug Tariff and published each month on behalf of DHSC. It includes reimbursement prices to be paid to pharmacy contractors for products prescribed generically and dispensed on NHS prescriptions.

Reimbursement prices for generically written prescriptions listed in Part VIIIA of the tariff are placed in a category. The categories are A, C and M. The reimbursement price is established differently depending on the category in which the product is placed.

Category C lists products that are not readily available as a generic. The reimbursement price of those products is based on a particular proprietary product, manufacturer or supplier. The reimbursement price of generic products listed in categories A and M are set using volume and sales data from suppliers submitted under the information regulations. For special and imported unlicensed medicines (parts VIIIB and VIIID of the Drug Tariff), prices are calculated using average selling prices reported by suppliers under the information regulations.

Data supplied in accordance with the information regulations also supports the setting of temporary concessionary prices when pharmacies cannot source medicines at or below the listed Drug Tariff reimbursement price.

Overall, the system relies on timely and accurate data from suppliers to ensure fair pricing and value for money for the NHS. While this review concentrates on reimbursement arrangements in England, the reimbursement prices set out in the respective drug tariffs in the devolved governments are constructed in a similar way.

Availability and value for money

DHSC’s work to help prevent shortages and to take mitigating actions in the most cost-effective way when they do occur is underpinned by data provided from suppliers in accordance with the information regulations, which require marketing authorisation holders to inform the Secretary of State about shortages and discontinuations of medicines. Once a supplier issue notification has been received by DHSC, a structured decision-making pathway is followed. This is set out in NHS England’s guide to the systems and processes for managing medicines supply issues in England.

The process begins with an initial risk assessment of the potential effect on supply of products from that manufacturer and, if required, DHSC develops strategies to manage the supply issue. The initial risk assessment considers factors such as the nature of the problem, duration, market share, alternative products and clinical need. Once a decision is made as to the severity of the medicines supply issue, it is then assigned one of 4 clinical escalation tiers, from low to very high patient safety risk. If no significant impact is identified, the process stops.

Potential shortages trigger the use of different escalation or mitigation pathways such as serious shortage protocols (SSPs and Medicine Supply Notifications (MSNs), which aim to minimise patient impact by determining alternatives and engaging the NHS, or engaging with industry to assess their ability to fill gaps in shortfalls of health products.

Review methodology

To review the effectiveness of the information regulations DHSC has analysed, evaluated and assessed what data it has now (July 2022 to June 2025) compared with what it had prior to the information regulations being in place.

The main data DHSC receives and collects from relevant manufacturers, suppliers and wholesalers, pursuant to the information regulations is:

• the quarterly information collections of generic medicines and special medicinal products through the NHSBSA portal
• data on concessionary prices through NHSBSA
• DHSC ad hoc requests on generic medicines
• information on medicine shortages and discontinued medicines supplied through the DaSH portal

Assessment against the policy objectives

The assessment below outlines how the policy objectives are being met by the information regulations.

Objective 1: to require information to be kept about sales and purchases of medicines, appliances and borderline substances

Objective of the regulations

The information regulations were implemented to set out detailed arrangements for sections 264A and 264B(1)(k) and (l) of the NHS Act 2006, which permit DHSC to ask for any data from the pharmaceutical supply chain provided it is used to support the prescribed scenarios listed in section 264A(3) such as:

• for reimbursement of primary care dispensers
• to set a maximum selling price
• to enable DHSC to consider availability, value for money and cost control

Subsequently, an important objective for the information regulations is to require all manufacturers, importers, wholesalers and anyone supplying to patients other than by sale, to record and keep information about sales and/or purchases of medicines, appliances and borderline substances used by the NHS in England, Wales, Scotland or Northern Ireland. The period for which the information must be kept is 4 years. DHSC can ask for this information to be provided for the statutory purposes in section 264A of the NHS Act 2006.

Assessing the extent to which the objective is being achieved

Parts 2 and 3 of the information regulations require manufacturers to record and keep information for unbranded generic health service medicines and special health service medicines listed with a reimbursement price in Part VIII of the Drug Tariff, that are supplied to any UK primary medical services providers, Health Service chemists, or medicines wholesalers. This requirement captures the current and appropriate manufacturers that are supplying health service medicines to the primary care supply chain.

The same parts require wholesalers of unbranded generic health service medicines and special health service medicines to keep and record the following information:

• number or quantity of packs purchased and supplied
• pack size
• net purchase amount and net sales income
• excipient formulations (per specials)

The same parts also require importers of unbranded generic health service medicines to keep and record information on the same terms as manufacturers, and for special health service medicines on the same terms as wholesalers.

Additionally, part 4 of the information regulations provides DHSC with the ability to request general information about the supply of UK health service products (medicines, appliances and borderline substances). To support these requests, the information regulations include a provision mandating UK producers to record and keep data on the supply and purchase of their products which supports achieving this objective. UK producers are required to keep information pertinent to part 4 of the information regulations for 4 years.

By requiring producers to keep the recorded information, the information regulations seek to ensure that UK producers record and store the data, so they are able to supply it to DHSC if requested by DHSC under the provisions of the information regulations.

In the past, when DHSC has requested information in line with the various provisions in the information regulations, no supplier has told DHSC that they cannot provide the data because they have not recorded it. Therefore, DHSC considers that the objective is being met.

Assessing whether the objective remains appropriate

Reimbursement prices for certain products listed in Part VIII of the Drug Tariff and concessionary prices continue to be set using data obtained in accordance with the information regulations. DHSC continues to need suppliers to record and keep data to be able to comply with other provisions on the information regulations.

The provisions in the information regulations are fundamental in ensuring that producers have the processes for data collection, recording and reporting built into their business operations and subsequently provide DHSC with the data it may request under other provisions in the information regulations.

However, to enable more effective and efficient reimbursement arrangements, amendments should be made. For example, DHSC currently uses regulation 9 of the information regulations to collect information on a subset of unbranded generic health service medicines (Category M of the Drug Tariff) and regulation 14 for information on special health service medicines (those in Part VIIIB of the Drug Tariff). Both of these data collections are at quarterly intervals. DHSC wants to add to the requirement for companies to keep and report data to include data for products that are not yet in the relevant parts of the Drug Tariff. This is to be able to make a decision as to whether the product qualifies to have a reimbursement price in the relevant part of the Drug Tariff based on suppliers’ sales and volume data. DHSC needs to consider sales and income of the product from suppliers and manufacturers and in turn requires UK producers to keep and report this data.

Similarly, one of the outcomes of the reimbursement reforms is to set the reimbursement price for some products in Part VIII Category C of the Drug Tariff on suppliers’ sales and volume data. Therefore, DHSC is proposing that UK producers that manufacture, distribute or supply unbranded and branded medicines in Part VIII Category C of the Drug Tariff are also required to record and keep this information quarterly. This will enable DHSC to ask for data under other provisions in information regulations and use the data to set a reimbursement price.

While the current provisions are functioning well and achieving this objective, there is scope to go further to ensure DHSC achieves this objective more completely by amending the information regulations to broaden the number of products for which UK providers are required to record and keep sales and volume data.

Assessing the extent to which the objective could be achieved through less onerous regulatory provisions

Prior to the information regulations, DHSC had voluntary agreements with a limited number of suppliers that included the recording, keeping and supplying to DHSC similar information for medicines:

• scheme M (with manufacturers of generic medicines)
• scheme W (with wholesalers of generic medicines)
• a ‘memorandum of understanding’ (MoU) on specials with manufacturers of specials

Going back to these or similar voluntary agreements is likely to result in DHSC receiving incomplete data as not all suppliers will agree to participate in voluntary arrangements. There would be no leverage or sanction if suppliers did not store and so were not able to supply the data. 

As the data recorded and kept in accordance with these information regulations provisions underpins the reimbursement arrangements and the accurate setting of reimbursement prices in the Drug Tariff, it is important that DHSC receives data from all suppliers. As such, the objective could not be achieved as thoroughly through less onerous regulatory provisions.

Objective 2: to improve the effectiveness of the community pharmacy reimbursement arrangements by requiring all suppliers to provide quarterly sales and purchase information

Objective of the regulations

The information regulations require all relevant manufacturers, importers and wholesalers of certain unbranded generic medicines (part 2 of the information regulations) and special medicinal products (part 3 of the information regulations) to provide DHSC with specified information about their sales and purchases. This information covers unbranded generic medicines listed in categories A and M in Part VIIIA of the Drug Tariff or special medicinal products listed in Part VIIIB and Part VIIID of the Drug Tariff, and it must be provided every quarter. DHSC uses this sales and volume data to establish reimbursement prices for these products.

Assessing the extent to which the objective is being achieved

Currently, DHSC contacts approximately 155 companies each month with a request for volume and price information. During the period July 2022 to April 2025, the data obtained in accordance with the information regulations was used to set, on average, the following reimbursement prices:

• 600 Category M products each quarter
• 290 unlicensed medicines each quarter
• 140 concessionary prices each month

Using volume and price information from manufacturers, importers and wholesalers obtained from suppliers in accordance with the information regulations has made DHSC’s reimbursement price-setting process more comprehensive than using data obtained under voluntary agreement or using suppliers’ list prices. It helps ensure that reimbursement prices better reflect the market, which in turn helps to ensure that dispensing contractors are paid fairly. Therefore, the data obtained in accordance with information regulations helps DHSC achieve its policy objective to improve the comprehensiveness and timeliness of the reimbursement arrangements.

Assessing whether the objective remains appropriate

As set out above, DHSC relies on data obtained in accordance with the information regulations to inform the community pharmacy reimbursement arrangements. It considers that current provisions are functioning well and the objectives remain appropriate.

However, as outlined under the first objective, there is scope to go further to enable DHSC to set the reimbursement price of more products using suppliers’ sales and volume data. Alongside expanding products where suppliers need to record and keep data, DHSC also wants to expand the products for which suppliers need to routinely supply data to DHSC to:

• enable it to consider whether a product that is not yet in the relevant category in Part VIII of the Drug Tariff could have its reimbursement price set on sales and volume data and so be listed in the relevant part in the Drug Tariff (currently this data is collected under part 4 of the information regulations rather than a routine data collection provision)
• enable it to set a reimbursement price for products in Category A (currently this data is collected under part 4 of the information regulations rather than a routine data collection provision)
• enable it to set a reimbursement price for some products in Category C (currently this data is collected under regulation 18 but will soon be needed routinely)

Further, the ‘hub and spoke dispensing’ regulations (The Human Medicines (Amendments Relating to Hub and Spoke Dispensing etc.) Regulations 2025 (statutory instrument 2025/758)) came into force on 1 October 2025. These regulations allow the activities relating to the dispensing of a medicine to be split between 2 retail pharmacy businesses that belong to different legal entities (or between one retail pharmacy business and an NHS dispensing practice (a dispensing doctor)), one of which acts as the hub (which must always be a retail pharmacy business) and the other as a spoke (which can be either a retail pharmacy business or a dispensing doctor).

The process is that a prescription is presented at a spoke, which then transfers the information on the prescription to the hub, where the prescription is dispensed. The dispensed medicines are then sent back to the spoke where they are supplied to the patient. The hub is expected therefore to concentrate on carrying out the core dispensing activities such as assembly and labelling, making use of large-scale dispensing efficiencies such as automation.

The spoke’s responsibilities will include:

• dealing with the receipt of prescriptions and possibly clinically checking those prescriptions
• supplying the dispensed medicines to the patient
• providing patient advice

This new model will provide another route for the manufacturing, distributing and supply of UK health service products to primary care dispensers. Therefore, as with any other supplier of a health service product, to ensure the reimbursement prices reflect all sales to pharmacies supplying to patients, the information regulations will need to be expanded to require hubs to record, keep and provide information about the purchase, sale and supply of products in the same way as other suppliers.

In addition, reimbursement for products not listed in Part VIII (or Part IX) of the Drug Tariff is often based on the NHS list price which is typically recorded in NHSBSA’s dictionary of medicines and devices (dm+d). It is therefore important that dm+d has up-to-date product information, such as pack and price, so community pharmacies have transparency and can be accurately reimbursed for products not listed in Part VIII (or Part IX). To support this, amendments to the information regulations to require suppliers and manufacturers to notify DHSC, through NHSBSA, about new products classified as health service medicines or changes made to existing products, including price and pack size, would ensure that NHSBSA as administrators of the dm+d can keep it up to date. This will ensure dispensing contractors have transparency as to what is marketed by which suppliers at what list price and DHSC can accurately reimburse them. 

While the current provisions are functioning well and achieving this objective, there is scope to go further to ensure DHSC achieves this objective more completely by amending the information regulations to:

• broaden the number of products for which UK providers are required to provide data to DHSC
• require hubs as a new type of supplier to provide data
• to ensure DHSC is notified of changes made to the product including its price and pack size

Assessing the extent to which the objective could be achieved through less onerous regulatory provisions

As with objective 1, prior to the information regulations, DHSC had voluntary agreements with a limited number of suppliers that included the recording, keeping and supplying to DHSC similar information for medicines:

• scheme M (with manufacturers of generic medicines)
• scheme W (with wholesalers of generic medicines)
• an MoU on specials with manufacturers of specials

Going back to these or similar voluntary agreements will result in DHSC receiving incomplete data as not all suppliers will agree to participate in voluntary arrangements. There would be no leverage or sanction if suppliers did not store the data and so were not able to supply it. 

As the data recorded and kept in accordance with the information regulations underpins the reimbursement arrangements and the accurate setting of reimbursement prices in the Drug Tariff, it is important that DHSC receives data from all suppliers. As such, the objective could not be achieved as thoroughly through less onerous regulatory provisions.

Objective 3: to enable the Secretary of State to request information about costs incurred with the manufacture or distribution of medicines and appliances

Objective of the regulations

The information regulations require manufacturers, importers and wholesalers to provide information on the costs incurred in connection with the manufacture and distribution of health service products, where the Secretary of State requires the information for the statutory purpose (part 5 of the information regulations).

The information requested is information that a UK producer can reasonably be expected to record and keep for the purpose of understanding their own relevant costs. Where this information is in connection with a particular presentation of a medicine or appliance (as opposed to overall costs) an information notice must be issued by the Secretary of State requesting that information. This provision enables the Secretary of State to exercise cost control powers where necessary in accordance with the NHS Act 2006.

Assessing the extent to which the objective is being achieved

To date, DHSC has not considered it necessary to request information, so it cannot be stated that the objective is being achieved. However, because there are, and it is anticipated there will continue to be, situations where the cost of a product has caused concern, it remains appropriate for the provision to be retained. This will enable DHSC to understand the costs of manufacturing and distribution of a product should it wish to consider utilising its price limiting powers for products not already covered by a voluntary scheme.

Assessing whether the objective remains appropriate

As with the previous objectives, prior to the information regulations, DHSC relied on the voluntary schemes (schemes M and W), which allowed DHSC to request an analysis of the direct and indirect manufacturing and/or supply costs of products that had increased in price. These requests were not obligatory, due to the voluntary nature of the agreements, so the information regulations make these requests more comprehensive and more appropriate to achieve this objective.

Even though DHSC has not used these powers and therefore it has not been necessary to achieve this objective, the powers and objective remain pertinent as a useful tool if and when DHSC has concerns about the cost of a product and wants to understand the costs of manufacturing and distribution to consider utilising its price limiting powers for products not already covered by a voluntary scheme.

Assessing the extent to which the objective could be achieved through less onerous regulatory provisions

Similar to above, returning to the voluntary arrangements that preceded the information regulations would mean that DHSC would only be able to request data on the costs associated with manufacturing or distributing a health service medicine from members of the voluntary schemes and there would be no leverage or sanction if those members did not supply cost data as requested. 

This objective could not be achieved to the same extent through less onerous regulatory provisions.

Objective 4: to support DHSC’s management of supply issues by requiring marketing authorisation holders to provide information on discontinuation and anticipated supply shortages

Objective of the regulations

The information regulations require manufacturers or marketing authorisation holders to notify DHSC of:

• their plans to discontinue the manufacture or supply of any health service medicine that they consider could have a direct effect on patients
• any anticipated supply shortages of health service medicines that could have a direct effect on patients (part 6 of the information regulations)

This requirement came into force on 1 January 2019 and supporting guidance on the reporting requirements for industry has been published. DHSC can also require manufacturers, importers and wholesalers to provide information about available volumes when there is a supply shortage.

Assessing the extent to which the objective is being achieved

This legal requirement replaced voluntary guidelines with the industry under which DHSC estimated that only about half of all supply shortages were notified. Therefore the information regulations have been pivotal in providing DHSC with a more representative picture of the supply of medicines in the UK. This has been more important than ever as the UK’s exit from the EU and the COVID-19 pandemic both tested the resilience of supply chains, meaning DHSC and the NHS needed to consider mitigating strategies to prevent shortages from affecting patients.

To support DHSC in achieving this objective, there is a designated online portal for companies to report relevant data. The portal was put in place in October 2020 to improve the process by which marketing authorisation holders of relevant products notify DHSC of potential shortages and discontinuations that may affect the supply of their medicines marketed in the UK. By the end of June 2025, over 7,400 shortages and over 2,800 discontinuations had been reported through the portal, which has provided DHSC with crucial information in understanding supply issues when they occur.

The introduction of the information regulations has increased both the quality and quantity of information provided on supply shortages and discontinuations. This supports DHSC in its role of managing those supply issues and substantiating its preparations in mitigating the effect on patients in a cost-effective manner.

By getting advanced notification of supply issues, DHSC can identify risks in advance and can develop and implement contingency plans so the effect on patients can be reduced or sometimes avoided altogether. DHSC and the NHS can work with suppliers to ensure that mitigating measures are put in place by DHSC before the shortage affects the public. Therefore, DHSC considers that this objective is being met.

Assessing whether the objective remains appropriate

DHSC’s work to help prevent medicine shortages and to help take mitigating actions in a cost-effective way when they do occur is underpinned by the information regulations which may require marketing authorisation holders to inform the Secretary of State about shortages and discontinuations of medicines. Information obtained in accordance with the information regulations supplements value for money considerations, such as analysing the cost of additional medicines, but also associated costs of a potential public health crisis resulting in or from a supply shortage, such as increased monitoring, GP visits or hospitalisations.

However, experience of operating the information regulations has identified instances where, due to a lack of clarity in the wording of regulation 29, a supplier may not report a shortage or discontinuation as they do not anticipate it influencing the wider market. Therefore, to ensure that provisions are appropriate for achieving this objective, DHSC is proposing to amend the wording to ensure that all situations that could lead to a supply shortage in the market are reported. This will improve the ability of DHSC to understand and react to supply shocks and price rises.

Additionally, there are gaps in the data DHSC is able to access as currently there is no legal provision to require suppliers to provide stock positions and anticipated supply details unless they are directly experiencing a supply issue or are discontinuing a product. This means that any data DHSC receives to inform its market oversight is reported solely through voluntary arrangements.

Further, under current provisions, DHSC cannot ask for sales data of a product that is intended for retail but maybe used in the NHS, even if there is a supply issue. This means that DHSC does not have a complete market view of the supply of medicines to identify medicine supply issues. It therefore cannot help to prevent potential shortages or, where they do occur, implement cost-effective mitigations, particularly with regard to over-the-counter medicines also used by the NHS and when there is an identified public health risk.

To better achieve this objective, DHSC is proposing to introduce a requirement for companies to share information on products that can be used in the NHS even if they are intended for retail sale in the event a shortage is identified.

These amendments should help achieve objective 4 more completely by ensuring DHSC has a more complete market view of the total supply of medicines, to support better cost-effective planning and help manage supply issues and discontinuations, increasing patient access to medicines and provide better taxpayer value for money.

Assessing the extent to which the objective could be achieved through less onerous regulatory provisions

Given DHSC is seeking to develop the way in which it addresses this objective, particularly with respect to gaining more information from suppliers and manufacturers regarding their supply, it is deemed that this is not possible to be achieved with fewer regulations. Amendments remain appropriate to achieve this objective more completely.

Recommendation

Overall, this review finds that the objectives of the information regulations remain relevant and the provisions are still required to achieve the objectives that cannot be done in a less regulatorily onerous way. DHSC has identified several areas where the current provisions should be developed to ensure the data reporting requirements under the information regulations are fit for purpose in light of:

• DHSC’s experience of operating the information regulations since they came into force
• recent developments to DHSC’s reimbursement policy
• the increasing complexity of the supply chain and the public health challenges that arise

DHSC intends to consult on making several changes to the information regulations based on the knowledge gained from the experience of their operation since 2018.

Summary of the proposed 12 amendments

Reimbursement:

• increase the scope of data collection for an increased number of products that are not currently covered by the regulations in order to make a decision about setting a reimbursement price
• formalise regular quarterly data collections for medicines listed in Part VIIIA Category C of the Drug Tariff that includes branded medicines
• notification for all new products being put on the market and updates to pack sizes and prices to ensure that dm+d can be populated with a reimbursement price
• introduce provisions to require product data returns from hubs to inform reimbursement prices
• clarify what is meant by an invoice in returns required from pharmacies to support the medicine margin survey

Availability and value for money:

• removing subjectivity where producers need to give notice on a supply shortage
• supply data requests for products available on a prescription and as a retail sale where a product may be subject to NHS use as well as retail sale to inform a whole-market view of supply levels to support DHSC’s mitigation of supply issues
• expanding the scope to enquire on a product’s supply level where there is a possibility of public health risk to support DHSC to manage any shortage in a cost-effective manner

Improved compliance: 

• amending the reference to NHS England’s online gateway as the delivery point for submitting data to DHSC due to NHS England’s online gateway ceasing to exist since the establishment of NHSBSA. This should now reference NHSBSA
• reporting of supply issues and discontinuations to a specific delivery point (DaSH portal)
• changes and improvements to arrangements for penalties for contraventions
• extend the frequency of the review of information regulations every 2 years to support a representative evaluation of their effectiveness in practice

A formal consultation is being published alongside this annual review. The proposed amendments will seek to:

• improve the comprehensiveness of the data collected
• improve the operationalisation of the information regulations to better substantiate the reimbursement regime
• enable DHSC to manage supply issues in a cost-effective way and therefore better fulfil the objectives of the information regulations

The Health Service Medicines (Price Control Penalties and Price Control Appeals Amendment) Regulations 2018

Aim and scope of the review

Regulation 6 of the Health Service Medicines (Price Control Penalties and Price Control Appeals Amendment) Regulations 2018 (the penalties regulations) requires the Secretary of State to carry out an annual review of the regulations and publish a report with the conclusion of the review. This must:

• set out the objectives intended to be achieved by the penalties regulations
• assess the extent to which these objectives are achieved
• assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation

Overview of the penalties regulations

The penalties regulations primarily apply where, for the supply of a health service medicine, a manufacturer or supplier charges in excess of the limit specified by direction under section 262(1)(a) of the NHS Act 2006.

Where the above applies, the penalties regulations make a manufacturer or supplier liable for the payment of a penalty to the Secretary of State.

The penalties regulations also amend the Health Service Medicines (Price Control Appeals Regulations 2000 (the appeals regulations). The appeals regulations make provision for the appeals process where a manufacturer, supplier or, where relevant, other UK producer of health service medicines or health service products has a right of appeal in relation to an enforcement decision made under sections 260 to 265 of the NHS Act 2006.

Review methodology

No price control determinations have been made by the Secretary of State pursuant to the penalties regulations in the period July 2022 to June 2025. Therefore, this review concentrates on whether the penalties regulations remain appropriate from a policy perspective.

Assessment against the policy objectives

The objectives of the regulations

The penalties regulations came into force on 11 April 2018. The policy objectives of the penalties regulations are set out in section 7 (policy background) of the explanatory memorandum that accompanied the penalties regulations.

The main objective of the penalties regulations was to ensure the Secretary of State can issue penalties where a manufacturer or supplier charges in excess of the limit specified in a direction made under section 262(1)(a) of the NHS Act 2006. In relation to this objective, the penalties regulations also specified the level of penalty and provided a right of appeal against any penalty notice issued. Separately, the penalties regulations updated some of the references in the appeals regulations.

Assessing the extent to which the objectives are being achieved and their continued appropriateness

Under section 262(1)(a) of the NHS Act 2006, the Secretary of State can, subject to consultation with the industry body, limit the price of any health service medicine that is not covered by the voluntary scheme for branded medicines pricing and access. While no price control determinations have been made, there are still situations where the cost of a product has caused concern. For example, there may be instances when a product’s price considerably increases with no obvious justification. It therefore remains appropriate for the provision under section 262(1)(a) of the NHS Act 2006 to be retained by the Secretary of State, should this price limiting power be used in the future.

The Health Service Products (Pricing, Cost Control and Information) Appeals Tribunal has been set up to hear appeals from UK producer against the enforcement of decisions made under sections 260 to 265 of the NHS Act 2006 and there is a right of appeal. Further to that, DHSC is currently considering what additional operational guidance would be helpful to support the process.

Assessing the extent to which the objective could be achieved through less onerous regulatory provisions

As outlined above, the ability to issue penalties is essential for the enforcement of any direction under section 262(1)(a) of the NHS Act 2006 that limits the price of a health service medicine. Penalties cannot be issued without the power to do so in legislation.

DHSC considers that the penalties regulations are proportionate and that the objectives cannot be achieved with less regulation.

Recommendation

The review finds that the penalties regulations have continued to broadly achieve their objectives and that the objectives remain appropriate. DHSC does not consider that the objectives could be achieved without the regulations or with a reduction in the regulations.

Conclusion

The review finds that while the objectives of the regulations remain appropriate, and the objectives could not be achieved without the regulations, amendments to the information regulations are necessary in order to meet those objectives to a greater extent.

The review period

The information regulations and the penalties regulations currently require an annual review. However, as part of this review DHSC proposes a number of changes and developments for consideration. As part of this DHSC will also consider whether the annual review is necessary and proportionate or could be less frequent.

The current proposal is to reduce the review to a frequency of every 2 years due to the nature of the regulations, and the duration of which analysing them can conclude their effectiveness.

Legal duties

A full and considered assessment of the Secretary of State’s legal duties with regards to the NHS Act 2006, the public sector equality duty and the Family Test were undertaken before the regulations were laid. DHSC considers that those documents set out the implications and effects of those duties and continue to be relevant to this annual review.