Cost of Medication

Thank you for contacting me about the cost of medications in the NHS. I appreciate your concerns.

I would like to assure you that excessive pricing is taken very seriously. I know the Government is committed to making sure the supply of medicines to the NHS is as competitive as possible.

A large part of the NHS budget is spent on medicines, with total expenditure in England estimated at £16.7 billion in 2020/21. The Department of Health and Social Care (DHSC) has various mechanisms to reduce that level of spending. The costs of branded medicines are controlled by the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) and the statutory scheme for branded medicines.

When VPAS expires at the end of 2023, it is expected to have generated around £7 billion of income for the NHS over nearly five years. At present, 90 per cent of companies supplying eligible health service medicines to the NHS are members of the Voluntary Scheme.

For unbranded, or generic, medicines, the Department relies on competition to keep prices down. This has led to some of the lowest prices in Europe. Four in five medicines prescribed in the NHS are also non-branded, helping the health service to achieve further savings. A total of £1.2 billion has been saved on medicines in three years.

I know there are instances where there is little competition, or competition is working ineffectively and, as a result, the NHS is paying higher than expected prices for generic medicines. I am glad therefore that the Competition and Markets Authority has opened several investigations into pharmaceutical companies’ suspected breaches of the Competition Act, which have resulted in large fines for companies found to be abusing their position by charging excessive and unfair prices. Examples of this include phenytoin, prochlorperazine, hydrocortisone and liothyronine.

Thank you again for taking the time to contact me.