Proposed review of the statutory scheme for branded medicines pricing
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.
The statutory scheme was last amended on 1 January 2025 to align terms of that scheme with certain aspects of the 2024 VPAG. At the time of the consultation response, sales data was available up to quarter 1 (Q1) 2024, and the calculated statutory scheme headline payment percentage for 2025 (15.5%) was broadly commercially equivalent to the forecast VPAG headline payment percentage for 2025 (15.3%). However, sales data for Q2 and Q3 2024 has subsequently become available showing higher than expected newer medicines sales growth.
As a result, the VPAG headline payment percentage for 2025 was set at 22.9%. Therefore, the statutory scheme is no longer considered to deliver on the department’s longstanding policy of broad commercial equivalence between the 2 schemes.
The consultation sets out the department’s proposals to update the statutory scheme such that payment rates are set on the basis of the most up to date data and to maintain the principle of broad commercial equivalence.
The consultation proposes to:
- increase the statutory scheme headline payment percentage to 23.8% in 2025, 24.7% in 2026 and 26.4% in 2027
- maintain allowed growth at 2% each year and amend the baseline adjustments made in the previous consultation such that the total value is unchanged, but the implementation of two-thirds of the adjustment intended for 2025 is delayed to 2026. This gives baseline adjustments of £50 million, £430 million, and £380 million each year in 2025, 2026 and 2027 respectively
- introduce new data assurance requirements for presentation level data returns