Guidance

Information on the pricing of ACBS products

Published 12 April 2019

1. Background

This pricing document forms the basis of a voluntary agreement between the Department of Health, the Advisory Committee on Borderline Substances (ACBS) and applicants.

It forms part of a series of related information notes that the ACBS will use when considering applications. The aim of this document is to ensure consistency and transparency in the pricing of ACBS products.

2. Price of ACBS Products

When considering an application for inclusion in Part XV of the Drug Tariff (DT), the ACBS takes account of the clinical need for a product, its efficacy and the total price to the NHS. This document addresses the issue of total price to the NHS.

In line with the information to be included in nutritional applications (Appendix 2) and the information to be included in dermatological applications (Appendix 2) the ACBS will consider the issue of price according to the type of submission:

• type 1 – new formulations which the applicant perceives to have well characterised and substantiated advantages in terms of nutritional composition and patient tolerance/acceptability
• type 2 – formulations which are broadly similar in composition to existing products already on the market and which could be considered to be suitable alternatives
• type 3 – existing products to which price changes are proposed

Notes: any evidence of health economic benefits of the products will be welcomed by the ACBS.

The ACBS may conclude that a product is not suitable for ‘ACBS status’ in light of the total cost of the product to the NHS and the applicant will be so advised. If this is the case the applicant may ask for the decision to be reviewed and must provide additional evidence to support this request.

2.1 Type 1 – New formulations which the applicant perceives to have well characterised and substantiated advantages in terms of nutritional composition and patient tolerance/acceptability

A statement of the proposed total price of the product (ie single dispensing unit) to the NHS must be provided. This must include the NHS list price and any distribution costs that may be typically charged to dispensers.

2.2 Type 2 – Formulations which are broadly similar in composition to existing products already on the market and which could be considered to be suitable alternatives

A statement of the proposed total price of the product (i.e. single dispensing unit) to the NHS must be provided. This must include the NHS list price and any distribution costs that may be typically charged to dispensers.

The application must state into which category the product is perceived to fit (see information to be included in nutritional applications, Appendix 1 and information to be included in dermatological applications, Appendix 1).

The ACBS will recommend that the benchmark cost to the NHS for that category should be applied as a maximum in order to achieve ‘ACBS status’. Products will usually only be approved at a similar price to other products in the category. If the products suggested list price is different from similar products it is open to the applicant to give the reasons for this.

2.3 Type 3 – existing products to which price changes are proposed

Where a company wishes to increase their NHS list price and retain ‘ACBS status’, price increases will be benchmarked against a standard inflation comparator – the current Retail Price Index (excluding mortgages). The average Retail Price Index (excluding mortgages) for the preceding 12 months, at the time of application, will also be taken into consideration.

A re-alignment of market pricing may be allowed. Any proposed re-alignment of pricing must result in a total overall saving to the NHS. Detailed evidence of the total savings must be provided.

Companies are strongly encouraged to change their list prices not more than once a year. The notification should include details of the proposed price change for the product along with any background information.

An ACBS Product Price Increase Request Form can be obtained on request by emailing acbs@dhsc.gov.uk. Notifications of price changes should be sent to the ACBS at least 3 months before the price change is intended to take effect.

Notes: a review of a products price will not be considered within the first 12 months following its inclusion within Part XV of the DT. Therefore if the price was to increase within a year of its inclusion in the DT, it is likely that it would lose its ‘ACBS status’ unless there were exceptional circumstances.

Where an approved price change is not implemented within 6 months of being agreed, that price change will no longer apply. The product will, therefore, remain at the original price, which will be used as the basis for subsequent changes.

3. Notification to NHS Business Services Authority, Prescription Pricing Division (PPD)

3.1 Type 1 and Type 2 applications

Once the ACBS has agreed that a new product is suitable for ‘ACBS status the applicant will be informed of the decision. When the product is due to be launched the applicant will write formally to the ACBS Secretariat confirming the list price of the product(s), as agreed by the Committee and requesting that the PPD be informed of the product for inclusion in the DT. If the product is not brought to market within 12 months from the date of the approval letter, then the approval is no longer valid and a new complete application will be required.

3.2 Type 3 applications

If the ACBS has agreed that a product is still suitable for ‘ACBS status’ at its new price, the applicant will be informed of the decision. The Applicant is then required to write formally to the ACBS Secretariat requesting the PPD be informed of the implementation of these price changes.

The applicant must also send a copy of their revised price list to the PPD, clearly indicating the products affected and the effective date of these increases.

Where an approved price change is not implemented within 6 months of being agreed, that price change will no longer apply. The product will, therefore, remain at the original price, which will be used as the basis for subsequent changes.

The ACBS Secretariat will confirm with the PPD that a product is still suitable for ‘ACBS status’ in light of any price increase.

Notes: applicants should inform the ACBS Secretariat by the 1st of the month to ensure price changes are effective for the following month’s dispensed prescriptions.

If applicants inform the PPD of price changes that have not been considered by the ACBS and the ACBS considers that the new prices do not provide value for money for the NHS, the ACBS may then have to consider whether their continued recommendation of the product is appropriate.

Issue date: August 2015