UK Law and Practice Contributed by: Adela Williams, Ewan Townsend, Libby Amos-Stone and Eleri Abreo, Arnold & Porter
Medical Devices Medical devices will only be routinely dispensed in primary care in England through the NHS if they are included in the Drug Tariff. The DHSC/NHS Business Services Authority (NHSBSA) agrees the reimburse- ment price of the medical device with the manufac- turer at launch, and this is principally determined by comparing the device with similar products on the market and their respective prices. If there are no com- parable devices or if the applicant submits evidence to support a different price, the reimbursement price is determined by negotiation between the parties. There is no price control scheme for medical devic- es equivalent to VPAG or the Statutory Scheme for medicines. However, the government does in principle have a general statutory power to control the maxi- mum price that may be charged for a medical device. 8.2 Price Levels of Pharmaceuticals or Medical Devices There is no formal system of international reference pricing, although the cost of the presentation in other markets is specifically listed as a relevant criterion to which the DHSC should have regard when agreeing or directing a price for a medicine under VPAG or the Statutory Scheme. 8.3 Reimbursement From Public Funds All authorised medicines validly prescribed on an NHS prescription may in principle be reimbursed from pub- lic funds, unless expressly excluded. In primary care, patients receive medicines prescribed by their GPs from community pharmacies. Patients in England must pay a fixed price for NHS prescrip- tions, unless exempt. Prescription charges have been abolished in Northern Ireland, Scotland and Wales. Medicinal products used in NHS hospitals are funded by commissioners in accordance with the “NHS Pay- ment Scheme”, a set of prices or tariffs for defined procedures and items of care. Hospitals are paid for procedures performed or care provided (including the costs of associated medicines and devices), based on amounts fixed in the tariff. Certain new and high-cost medicines and medical devices are reimbursed out-
lated as a percentage of eligible net sales) to cover excess expenditure. The rebate percentages are calculated using different formulas for “newer” and “older” medicines. New branded health services medicines that contain a new active substance and are supplied by VPAG mem- ber companies are subject to free pricing at launch, as are line extensions of such medicines launched within 36 months of licensing of the initial indication in the UK. The prices of such products must be notified to the DHSC prior to launch. The price for all other branded health service medicines supplied by VPAG member companies must be agreed with the DHSC. Statutory Scheme If a company is not a member of VPAG, its sales of branded health service POMs are controlled by the parallel Statutory Scheme. Since 1 April 2018, this has involved a payment scheme calculated as a percentage of net sales, and from 1 January 2025, the Statutory Scheme has differentiated between older and newer medicines in a manner similar to VPAG. The maximum price that may be charged for a branded health service medicine within the Statutory Scheme is that directed by the Secretary of State. The DHSC aims for broad commercial parity between the schemes and has in recent years made various amendments to the Statutory Scheme to bring it fur- ther into line with VPAG, including harmonising certain exemptions from the requirement to make payments. Prices may also be limited as a result of competition, including through tenders. In primary care, the price of some medicinal products may be indirectly controlled by the reimbursement price, as set out in the Drug Tariff (a monthly publication specifying the amounts to be paid to contractors for providing relevant goods and services in England). These prices are calculated based on sales information provided by pharmacies, manufacturers and wholesalers. Where the Drug Tariff does not list a reimbursement price for a medicine, or where a product is prescribed by brand name, it will be reimbursed at the manufacturer’s NHS list price.
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