Proposed update to the statutory scheme to control the cost of branded health service medicines

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. VPAG was agreed in late 2023 and replaced the 2019 voluntary scheme for branded medicines pricing and access from 1 January 2024.

The government is proposing updates to the statutory scheme to maintain broad commercial equivalence with VPAG. The consultation proposes to introduce a differentiated approach to setting payment percentages for newer medicines and older medicines, and includes proposals on:

• defining older and newer medicines

• setting the headline payment percentage for newer medicines

• setting the basic payment percentage and top-up payment percentage for older medicines

• calculating the price decline of older medicines

The consultation also proposes increasing the threshold for an exemption from scheme payments for small companies.