Commons Library analysis of the Health Service Medical Supplies (Costs) Bill

The Health Service Medical Supplies (Costs) Bill was introduced on 15 September 2016. It is tabled to have its Second Reading on the 24 October 2016.

The Bill intends to make a number of amendments to the National Health Service Act 2006 on matters related to the control of medicine prices.

The prices of the sale of NHS branded medicines is regulated in the UK through two schemes, the voluntary Pharmaceutical Price Regulation Scheme (PPRS) and a Statutory Scheme, both of which use measures to control the prices of branded medicines.  Manufacturers and suppliers of NHS branded medicines can choose to sign up to the PPRS or will automatically fall under the control of the Statutory Scheme for their branded medicines.  The prices of unbranded generic medicines are not controlled, competition within the market is relied upon to control prices.

The provisions within the Bill intend to address a number of concerns that the Government have expressed relating to medicines pricing.  These include that the Statutory Scheme is providing lower savings for the NHS than the PPRS and the two schemes should be more aligned; and that a number of single source unbranded generic medicines manufacturers have recently been able to significantly increase prices, often by over 1000%.

The Bill would seek to provide powers for the Secretary of State for Health to:

• make changes to the statutory scheme to make it more aligned with the PPRS;
• control the prices of unbranded generic medicines; and
• require all medicines manufacturers and suppliers to provide information relating to prices.

This briefing paper will provide background on the issues, an outline of the contents of the Bill and relevant comment.