Question to the Department of Health and Social Care:

To ask Her Majesty’s Government why small and medium-sized enterprises with sales between £5 million and £25 million are exempted from the protection in the new Pharmaceutical Price Regulation Scheme.

Companies with sales of less than £5 million a year of branded medicines to the health service (i.e. excluding their global sales) are exempted from making Pharmaceutical Price Regulation Scheme (PPRS) payments to the Department. All companies in the Scheme with £5 million or more a year of such sales are covered by the provisions of the scheme. The level of sales threshold for the exemption was agreed with the Association of the British Pharmaceutical Industry as part of the 2014 PPRS negotiations. Small companies were represented in the negotiations.

Companies that choose not to join the PPRS are covered by the Statutory Scheme for controlling branded medicine prices. Companies in the statutory scheme with branded medicine sales of less than £5 million to the health service (i.e. excluding global sales) are exempted from the limit on maximum price and the information requirements.

The Government has consulted on a further limit to the maximum price of branded health service medicines in the statutory scheme. This is available at:

www.gov.uk/government/consultations/branded-medicines-controlling-prices.

As stated in the consultation document, Amendments to the Statutory Scheme to Control the Prices of Branded Health Service Medicines, published on 10 October 2014, the Government is aware of the need to broadly align the effect of the two schemes while taking account of the differences between them. As the consultation document says that the Government is particularly interested in the impact of an additional price cut might have on small companies, the Government has asked for views on the impact of any price adjustment on companies that are close to the £5 million exemption threshold.

The consultation document discusses strengthening information requirements. Companies would only be asked to provide this information on the rare occasions when the Department suspected a possible breach of the regulations.

The Government will take account of a range of factors set out in the consultation document and the consultation impact assessment when reaching a decision on its consultation proposals, as well as responses to the consultation, including responses from small and medium-sized companies.