The UK has robust measures in place to ensure that medicines and vaccines are both clinically and cost-effective before they can be used in the NHS.

The Department of Health and Social Care and the Association of the British Pharmaceutical Industry regularly conduct a ‘waterfall analysis’ to understand the actual sales of UK branded medicines for the NHS across the UK.

Often, the total ‘list price’ (or ‘public’ price) of NHS medicines sales are reported, and this gives a misleading picture for how much the NHS actually spends on branded medicines because it excludes any discounts or rebates.

Analysis of UK medicines sales in 2019

This analysis reports a more accurate view because the left-hand side of the waterfall chart shows sales of branded medicines net of all discounts. From this the actual branded medicines sales in 2019 was £11.8 billion (excluding the payment made by industry through the Voluntary Scheme or Statutory Scheme in 2019).

The ‘Discount/ residual’ segment contains the effect of discounts given in any form, including those achieved through commercial access agreements and patient access schemes. The residual also reflects discounts to wholesalers and pharmacies, generics and products subject to brand equalisation deals, as well as sales from products exempt from the scheme.

Download larger version of waterfall chart

This analysis illustrates that actual branded medicine sales, and growth are significantly lower than what is reported at list price levels.

It must be noted that under the Voluntary Scheme, net branded medicines sales will not grow by more than an average of 2% annually over the 5 years of the scheme.

The voluntary scheme quarterly net sales and payment information is available online here.

The DHSC webpage, Waterfall Analysis of UK Medicines Sales also provides additional material, such as the data sources.