The Branded Health Service Medicines (Costs) (Amendment) Regulations 2024

5 Insertion of new regulation 3A

After regulation 3 (payment scheme), insert— Older presentation additional payments 3A (1) Subject to paragraphs (2) to (4), the manufacturer or supplier responsible for the first relevant supply of an item of presentation that is an older presentation must pay in relation to the observed price decline specified in the first column of the table below, the payment percentage specified in the corresponding entry in the second column of that table of the net sales income for that item of presentation during the relevant period. Table 1 Observed price decline | Payment percentage 10% or less | 25% 11% | 24% 12% | 23% 13% | 22% 14% | 21% 15% | 20% 16% | 19% 17% | 18% 18% | 17% 19% | 16% 20% | 15% 21% | 14% 22% | 13% 23% | 12% 24% | 11% 25% | 10% 26% | 9% 27% | 8% 28% | 7% 29% | 6% 30% | 5% 31% | 4% 32% | 3% 33% | 2% 34% | 1% 35% or more | 0% (2) Subject to paragraphs (3) and (4), the observed price decline for a relevant supply made by a manufacturer or supplier of an item of presentation that is an older presentation, where the average presentation selling price for the relevant period is lower than the reference price, is one minus the quotient of the average presentation selling price for that relevant period divided by the reference price expressed as a percentage rounded to the nearest whole number. (3) If the average presentation selling price of an item of presentation that is an older presentation is higher than the reference price for a relevant period, the observed price decline for that relevant period is to be 10% or less and the corresponding payment percentage in the second column of the table in paragraph (1) is to apply to the net sales income of the presentation for the relevant period. (4) Where— (a) there is a commercial relationship in relation to an item of presentation that is an older presentation supplied by a manufacturer or supplier who is not an originator, originator licensee, vaccine originator or vaccine originator licensee; and (b) that commercial relationship is between that person and a manufacturer or supplier who is an originator, originator licensee, vaccine originator or vaccine originator licensee, the payment percentage in Table 1 applicable to the relevant item of presentation supplied by the manufacturer or supplier in accordance with regulation 3(1AA) is to be no less than that which would apply to the originator, originator licensee, vaccine originator or vaccine originator licensee had they made the supply. (5) The “relevant period” in relation to the supply of an item of presentation that is an older presentation is the calendar year in which the supply is made except if, part way through the calendar year— (a) the presentation becomes an older presentation, in which case the relevant period is to be from the start of the next calendar quarter following the day on which the item of presentation ceased to be a newer presentation and runs to the end of that calendar year then (subject to any further application of this paragraph) each subsequent calendar year thereafter; (b) the supply is the first relevant supply by a manufacturer or supplier who is not an originator, originator licensee, vaccine originator or vaccine originator licensee, in which case the relevant period starts on the day of the first relevant supply of the item of presentation and runs to the end of the calendar year then (subject to any further application of this paragraph) is each subsequent calendar year thereafter; or (c) the manufacturer or supplier becomes liable to make a payment in accordance with regulation 3 for the first time, in which case the relevant period starts on the day after the manufacturer or supplier becomes liable to make a payment and runs to the end of that calendar year then (subject to any further application of this paragraph) is each subsequent calendar year thereafter. (6) In this regulation— “average presentation selling price” means, in relation to the supply of an item of presentation by a manufacturer or supplier during a relevant period, the quotient of the total net sales income during the relevant period divided by total quantity supplied during the relevant period (the calculation is to be based on information in the relevant presentation report, provided that the Secretary of State considers that information is accurate); “commercial relationship” means a contractual or other business relationship, whether or not legally enforceable, regarding the manufacturing or supplying of an item of presentation including, but not limited to, licensing; “reference price” has the meaning given to it in regulation 3C(9). .