The 2019 voluntary scheme for branded medicines pricing and access: payment percentage for 2023
Published 15 December 2022
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Summary
The payment percentage in 2023 is set at 26.5% based on growth in total measured sales as well as other updates in line with annexes 4 and 5 of the voluntary scheme for branded medicines pricing and access documents.
In part, the increase in the payment percentage to 26.5% is due to the impact of the amendment agreed in January 2022 to in effect defer part of the payment calculated to be owed in 2022 to 2023 (had this amendment not been agreed, the 2023 payment percentage would have been 22.6% rather than 26.5%).
Measured sales growth rates
In addition to other updates as outlined in annexes 4 and 5 of the 2019 voluntary scheme documents, the payment percentage in 2023 is the result of growth of measured sales between 2018 and 2019, between 2019 and 2020, between 2020 and 2021 and between 2021 and 2022.
Growth in measured sales for the 2019 voluntary scheme (that is a comparison of their respective measured sales) is calculated from sales in the 2019 voluntary scheme, the statutory scheme and parallel imports.
The 2018 to 2019 growth, 2019 to 2020 growth and 2020 to 2021 growth in measured sales are based on full-year data where available.
The 2021 to 2022 growth rate of measured sales is calculated on partial-year data, in accordance with annex 4, paragraph 31 of the 2019 voluntary scheme. The 2021 to 2022 growth rate is based on sales made between January 2021 to September 2021 (Q1 to Q3 2021) and January 2022 to September 2022 (Q1 to Q3 2022).
Furthermore, in accordance with annex 4, paragraph 34, companies whose sales exceed (or fall below) £5 million between years, and so are included or excluded from measured sales of subsequent years, are excluded from the growth calculations.
First, the growth rates are calculated across each component of measured sales for 2019, 2020, 2021 and 2022 as shown in tables 1, 2, 3 and 4.
Table 1: scheme-level measured sales included in the 2019 growth rate calculation
| 2019 voluntary scheme | Statutory scheme | Parallel imports | |
|---|---|---|---|
| 2018 | £8,847 million | £1,650 million | £770 million |
| 2019 | £9,093 million | £1,673 million | £698 million |
| Growth rate | 2.79% (LOVSGR%1d) |
1.38% (LOSSGR%1d) |
–9.37% (LOPIGR%1d) |
Table 2: scheme-level measured sales included in the 2020 growth rate calculation
| 2019 voluntary scheme | Statutory scheme | Parallel imports | |
|---|---|---|---|
| 2019 | £9,093 million | £1,673 million | £698 million |
| 2020 | £10,546 million | £379 million | £767 million |
| Growth rate | 15.97% (LOVSGR%2d) |
–77.33% (LOSSGR%2d) |
9.86% (LOPIGR%2d) |
Table 3: scheme-level measured sales included in the 2021 growth rate calculation
| 2019 voluntary scheme | Statutory scheme | Parallel imports | |
|---|---|---|---|
| 2020 | £10,637 million | £374 million | £767 million |
| 2021 | £11,690 million | £395 million | £806 million |
| Growth rate | 9.89% (LOVSGR%3d) |
5.39% (LOSSGR%3d) |
5.12% (LOPIGR%3d) |
Table 4: scheme-level measured sales included in the 2022 growth rate calculation
| 2019 voluntary scheme | Statutory scheme | Parallel imports | |
|---|---|---|---|
| Q1 to Q3 2021 | £8,549 million | £292 million | £580 million |
| Q1 to Q3 2022 | £9,389 million | £31 million | £718 million |
| Growth rate | 9.82% (LOVSGR%4d) |
–89.49% (LOSSGR%4d) |
23.91% (LOPIGR%4d) |
These growth rates are then applied to the latest outturn 2018 sales returns at scheme level to produce 2019, 2020, 2021 and 2022 sales figures. These are then summed to arrive at the growth rates for total measured sales, which can be seen in table 5.
Table 5: scheme-level and total measured sales and total growth rates
| 2019 voluntary scheme | Statutory scheme | Parallel imports | Total measured sales | Growth in total measured sales | |
|---|---|---|---|---|---|
| Latest outturn 2018 | £8,847 million (LOVS0d) | £1,650 million (LOSS0d) | £770 million (LOPI0d) | £11,266 million (LOT0c) | - |
| Latest outturn 2019 | £9,093 million (LOVS1d) +2.79% | £1,673 million (LOSS1d) +1.38% | £698 million (LOPI1d) –9.37% |
£11,464 million (LOT1d) | 1.75% |
| Latest outturn 2020 | £10,546 million (LOVS2d) +15.97% | £379 million (LOSS2d) –77.33% |
£767 million (LOPI2d) +9.86% | £11,691 million (LOT2d) | 1.98% |
| Latest outturn 2021 | £11,589 million (LOVS3d) +9.89% | £400 million (LOSS3d) +5.39% | £806 million (LOPI3d) +5.12% | £12,795 million (LOT3d) | 9.44% |
| Provisional 2022 | £12,728 million (LOVS4d) +9.82% | £42 million (LOSS4d) –89.49% |
£998 million (LOPI4d) +23.91% | £13,768 million (LOT4d) | 7.61% |
Table 5 shows that the total measured sales growth rate between provisional 2022 sales and latest outturn 2021 sales is 7.61%.
Adjusted forecasts and payment profile
Table 6 sets out for each year of the scheme to 2022, the adjusted forecasts and profile of payment percentages following the latest outturn of scheme data in November 2022.
Table 6: adjusted forecasts and profile of payment percentages
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Growth rate of total measured sales | 1.75% | 1.98% | 9.44% | 7.61% | - |
| Adjusted forecast of the growth rate of total measured sales | - | - | - | - | 5.63% |
| New active substance (NAS) and medium-sized company exempted (MSE) sales as a share of voluntary scheme measured sales | 3.30% (LOFEX%1d) |
4.99% (LOFEX%2d) |
6.15% (LOFEX%3d) |
4.98% (LOFEX%4d) |
- |
| Adjusted forecast NAS and MSE sales as a share of voluntary scheme measured sales | - | - | - | - | 6.97% (FaEX%5) |
| Annual payment percentage | 9.6% (P%1) |
5.9% (P%2) |
5.1% (P%3) |
15.0% (P%4) |
26.5% (P%5) |
Table 6 shows the adjusted forecast growth rate of measured sales in 2023 and revised forecast NAS and MSE sales as a share of voluntary scheme measured sales.
These have contributed to a payment percentage in 2023 (P%5) of 26.5%.
The Department of Health and Social Care (DHSC) and the Association of the British Pharmaceutical Industry agreed to amend paragraph 77 in annex 5 of the voluntary scheme for branded medicines pricing and access to set the 2022 payment percentage (P%4) at 15% rather than the calculated 19.1%.
This amendment to the 2022 payment percentage impacts the calculation of the 2023 payment percentage. Had the 2022 payment percentage been set at 19.1%, the 2023 payment percentage (P%5) would have been 22.6% rather than 26.5%.
In accordance with annex 4, paragraphs 28 to 30 and annex 5, paragraphs 98 and 99, 2 rounds of end of scheme reconciliation will be conducted following the close of the third quarter of 2024 and 2025 where a revised 2023 payment percentage will be calculated.
The revised 2023 payment percentages will be calculated using the same methodology for setting the original 2023 payment percentage, but it will be based solely on the latest outturn data and will be to 2 decimal places. Any change arising in the payment due from scheme members in 2023 will be payable or refundable in the first quarter of 2025 and 2026.
General notes
Note 1: the information in all tables is that held on DHSC’s database at 15 November 2022.
Note 2: totals may not sum due to rounding.
Note 3: all tables are subject to future correction, such as where audited data replaces best available data. They will be updated at each quarterly publication point to reflect the latest available information. The audit and reconciliation arrangements are set out in paragraphs 4.26 to 4.31 of the voluntary scheme for branded medicines pricing and access.