The Branded Health Service Medicines (Costs) Regulations 2018

SCHEDULES

Regulations 3, 4 and 18

SCHEDULE 1 General provisions for payment scheme

Payment scheme requirements

1.  Any payments required to be made by regulation 3 or by a direction given under regulation 4(2)(b) by a manufacturer or supplier to whom this Schedule applies must—

(a) be paid in accordance with table 1 so that they are made in respect of the period specified in column (1) within the period specified in column (2);

(b) be paid by electronic transfer no later than the last day of the period within which payment must be made; and

(c) be calculated, where relevant, in accordance with the rules in paragraphs 3 to 7.

Table 1

Column (1) Period to cover	Column (2) Period within which payment must be made
Each quarter	Within 30 days of the last day of that quarter
Each remaining period	Within 30 days of the last day of that remaining period

Information requirements

2.  Information required by regulation 18 must be—

(a) provided in accordance with table 2 so that for the period specified in column (1), the information specified in column (2) must be provided within the period specified in column (3); and

(b) provided, where relevant, in accordance with the rules in paragraphs 3 to 7.

Table 2

Column (1) Period to cover	Column (2) Information required	Column (3) Period within which information must be supplied
Each quarter	Sales report	Within 30 days of the last day of that quarter
Each remaining period	Sales report	Within 30 days of the last day of that quarter
Each financial year	Presentation report	Within 2 months of the last day of that financial year
Each financial year	Audited sales report	Within 9 months of the last day of that financial year
Each financial year	Statutory audited accounts	Within 9 months of the last day of that financial year

Rules

3.  The end date of the final period in the manufacturer’s or supplier’s financial year, be that the final quarter or remaining period, must be treated as extended or reduced by not more than seven days before or after that period, if the end date of the supplier’s or manufacturer’s financial year has, in accordance with section 390(2)(b) of the Companies Act 2006, also been reduced or extended by the same period.

4.  Where the requirement to make a payment set out in regulation 3(1) or under a direction given under regulation 4(2)(b) begins to apply to a manufacturer or supplier part way through any of their quarters, remaining period or financial year, the manufacturer or supplier must—

(a) in respect of that quarter or remaining period, calculate the payment and provide the sales report for the period from the date on which the requirement to make a payment in regulation 3(1) or under a direction given under regulation 4(2)(b) begins to apply until the end of the relevant quarter or remaining period; and

(b) in respect of that financial year provide the audited sales report and presentation report for the period from the date on which the requirement to make a payment in regulation 3(1) or a direction given under regulation 4(2)(b) begins to apply until the end of the financial year.

5.  Where the requirement to make a payment set out in regulation 3(1) or under a direction given under regulation 4(2)(b) stops applying to a manufacturer or supplier part way through any of their quarters, remaining period or financial year, the manufacturer or supplier must—

(a) in respect of that quarter or remaining period, calculate the payment and provide the sales report, for the period from the beginning of the quarter or remaining period to the date the requirement to make a payment in regulation 3(1) or under a direction given under regulation 4(2)(b) stops applying; and

(b) in respect of that financial year provide the audited sales report and presentation report for the period from the beginning of the financial year to the date that the requirement to make a payment in regulation 3(1) or under a direction given under regulation 4(2)(b) stops applying.

6.  Where a manufacturer or supplier changes the length of their current or previous accounting reference date under section 392 of the Companies Act 2006 so as to extend or shorten its current or previous accounting reference period, the manufacturer or supplier must in writing notify the Secretary of State of the new date of its accounting reference period and provide the Secretary of State with the relevant documents which show that the accounting reference period has changed within 30 days of the change.

7.  A manufacturer’s or supplier’s “previous accounting reference period” means the one immediately preceding its current accounting reference period.

Regulation 20

SCHEDULE 2 Small manufacturer or supplier

Determination of small manufacturer or supplier

1.  A small manufacturer or supplier means—

(a) with respect to a manufacturer or supplier referred to in paragraph 2, a manufacturer or supplier that, as determined by the Secretary of State, is likely to receive in respect of the total supply of all presentations, a total net sales income below the thresholds set out in column (2) of table 1 where it satisfies the corresponding description of the manufacturer’s or supplier’s current accounting reference period specified in column (1) of the table; or

(b) with respect to a manufacturer or supplier referred to in paragraph 3, a manufacturer or supplier that has received in respect of the total supply of all presentations, a total of net sales income below the thresholds set out in column (2) of table 2 where it satisfies the corresponding description of the manufacturer’s or supplier’s previous accounting reference period specified in column (1) of the table.

2.  The manufacturer or supplier referred to in paragraph 1(a) is a manufacturer or supplier that would be required to make payments under regulation 3 or under a direction given under regulation 4 for a period of less than one of their complete accounting reference periods were it not for the fact that regulation 3(6) or 4(5) applied.

3.  The manufacturer or supplier referred to in paragraph 1(b) is a manufacturer or supplier that would be required to make payments under regulation 3 or under a direction given under regulation 4 for a period of one or more of their complete accounting reference periods were it not for the fact that regulation 3(6) or 4(5) applied.

Table 1

Column (1) Length of current accounting reference period	Column (2) Likely net sales income
Twelve months	£5 million
Less than twelve months	£5 million as proportionately reduced to the number of months in the manufacturer’s or supplier’s accounting reference period
More than twelve months	£5 million as proportionately increased to the number of months in the manufacturer’s or supplier’s accounting reference period

Table 2

Column (1) Length of previous accounting reference period	Net sales income
Twelve months	£5 million
Less than twelve months	£5 million as proportionately reduced to the number of months in the manufacturer’s or supplier’s accounting reference period
More than twelve months	£5 million as proportionately increased to the number of months in the manufacturer’s or supplier’s accounting reference period

Information requirements

4.  A manufacturer or supplier referred to in paragraph 2 that considers that it is likely to receive in respect of the total supply of all presentations, a total net sales income below the thresholds set out in column (2) of table 1 where it satisfies the corresponding description of the manufacturer’s or supplier’s current accounting reference period specified in column (1) of table 1, must provide in writing to the Secretary of State information setting out—

(a) an estimate of the total net sales income it is likely to receive in respect of the total supply of all presentations for its current financial year within 30 days of the date on which the requirement to make payments under regulation 3 or under a direction given under regulation 4(2)(b) would begin to apply were it not for the fact that regulation 3(6) or 4(5) applied;

(b) the total net sales income in respect of the total supply of all presentations for its previous financial year within 30 days of the completion of the first financial year during which the requirement to make payments under regulation 3 or under a direction given under regulation 4(2)(b) would have first applied were it not for the fact that regulation 3(6) or 4(5) applied.

5.  A manufacturer or supplier referred to in paragraph 3 must provide, in writing, information setting out its total net sales income in respect of the total supply of all presentations for each complete financial year within 30 days of each financial year that the manufacturer or supplier remains a small manufacturer or supplier.

Rules

6.  This Schedule must be construed in accordance with the following rules.

7.  The end date of the final period in the manufacturer’s or supplier’s financial year, be that the final quarter or remaining period, must be treated as extended or reduced by not more than seven days before or after that period, if the end date of the supplier’s or manufacturer’s financial year has, in accordance with section 390(2)(b) of the Companies Act 2006, also been reduced or extended by the same period.

8.  Where a manufacturer or supplier changes the length of their current or previous accounting reference date under section 392 of the Companies Act 2006 so as to extend or shorten its current or previous accounting reference period, the new manufacturer or supplier must in writing notify the Secretary of State of the new date of its accounting reference period and provide the Secretary of State with the relevant documents which show that the accounting reference period has changed within 30 days of the change.

9.  A manufacturer’s or supplier’s “previous accounting reference period” means the one immediately preceding its current accounting reference period.

Regulation 19

SCHEDULE 3 New manufacturer or supplier

Information requirements

1.  A new manufacturer or supplier required to make payments under regulation 3 or a direction given under regulation 4(2) must provide in writing to the Secretary of State an estimate of the total of net sales income it is likely to receive in respect of the total supply of its presentations for its first financial year within 30 days of the date on which the requirement to make a payment under regulation 3 or a direction under regulation 4(2) begins to apply to the new manufacturer or supplier.

2.  Where the new manufacturer or supplier is not a small manufacturer or supplier, the new manufacturer or supplier must provide to the Secretary of State information in column (2) of the table in respect of each corresponding quarter, remaining period or financial year specified in column (1) of that table no later than within the corresponding time in column (3) of that table.

Table

Column (1) Period to cover	Column (2) Information to be provided	Column (3) Period within which information must be supplied
Each quarter	Sales report	Within 30 days of the last day of that quarter
Each remaining period	Sales report	Within 30 days of the last day of that remaining period
Each financial year	Presentation report	Within 2 months of the last day of that financial year
Each financial year	Audited sales report	Within 9 months of the last day of that financial year
Each financial year	Statutory audited accounts	Within 9 months of the last day of that financial year

Rules

3.  This Schedule must be construed in accordance with the following rules.

4.  The end date of the final period in a manufacturer’s or supplier’s financial year, be that the final quarter or remaining period, must be treated as extended or reduced by not more than seven days before or after that period, if the end date of the supplier’s or manufacturer’s financial year has, in accordance with section 390(2)(b) of the Companies Act 2006, also been reduced or extended by the same period.

5.  Where the requirement to make a payment set out in regulation 3(1) or under a direction given under regulation 4(2)(b) begins to apply to a manufacturer or supplier part way through any of their quarters, remaining period or financial year the manufacturer or supplier must—

(a) in respect of that quarter or remaining period, calculate the payment and provide the sales report for the period from the date on which the requirement to make a payment in regulation 3(1) or a direction given under regulation 4(2)(b) begins to apply until the end of the relevant quarter or remaining period; and

(b) in respect of that financial year provide the audited sales report and presentation report for the period from the date on which the requirement to make a payment in regulation 3(1) or a direction given under regulation 4(2)(b) begins to apply until the end of the financial year.

6.  Where the requirement to make a payment set out in regulation 3(1) or under a direction given under regulation 4(2)(b) stops applying to a manufacturer or supplier part way through any of their quarters, remaining period or financial year the manufacturer or supplier must—

(a) in respect of that quarter or remaining period, calculate the payment and provide the sales report, for the period from the beginning of the quarter or remaining period to the date the requirement to make a payment in regulation 3(1) or under a direction given under regulation 4(2)(b) stops applying; and

(b) in respect of that financial year provide the audited sales report and presentation report for the period from the beginning of the financial year to the date that the requirement to make a payment in regulation 3(1) or under a direction given under regulation 4(2)(b) stops applying.

7.  Where a manufacturer or supplier changes the length of their current or previous accounting reference date under section 392 of the Companies Act 2006 so as to extend or shorten its current or previous accounting reference period, the new manufacturer or supplier must in writing notify the Secretary of State of the new date of its accounting reference period and provide the Secretary of State with the relevant documents which show that the accounting reference period has changed within 30 days of the change.

8.  A manufacturer’s or supplier’s “previous accounting reference period” means the one immediately preceding its current accounting reference period.

Regulation 14

SCHEDULE 4 Recoverable Sums

1.  For the purposes of regulation 14, the recoverable sum will be the sum of—

(a) the difference between the amount which the manufacturer or supplier would have received in any month where there is a contravention (that month starting on the date of the first contravention that relates to the presentation) had the product been supplied at the maximum price and the amount that the manufacturer or supplier actually received; and

(b) the amount calculated by multiplying that difference by the appropriate additional percentage specified in the table.

2.  In respect of a contravention described in column (1) of the following table, the appropriate additional percentage is specified opposite in column (2).

Table

Column (1) Contravention	Column (2) Additional percentage
First contravention	5%
Second contravention	15%
Third contravention	25%
Fourth contravention	35%
Fifth or subsequent contravention	50%

3.  For the purposes of this Schedule—

(a) “second contravention” occurs where a presentation continues to be supplied in contravention of these Regulations for a period of two months after the first contravention which relates to that presentation;

(b) each subsequent contravention occurs where the same presentation continues to be supplied for a further period of one month from the date of a previous contravention which relates to that presentation;

(c) if the period between contraventions means that the amount calculated under paragraph 1(a) is zero, the next month for which there is an amount calculated under paragraph 1(a) that is greater than zero in respect of that presentation is treated as a new first contravention for the purposes of paragraph 2.

Regulations 6, 16 and 26

SCHEDULE 5 Penalties

1.  Subject to paragraph 2, the daily penalty payable by a manufacturer or supplier must be calculated by reference to—

(a) the entry in column (1) of table 1 within which the total value of its net sales income for total supply of all presentations falls;

(b) the amount specified in column (2) opposite that entry in respect of each day of the contravention; and

(c) the amount specified in column (3) opposite that entry in respect of each subsequent day of that contravention.

Table 1

Column (1) Total values of its net sales income for the total supply of all presentations in most recent complete financial year or if not available, total estimate value of its net sales income for its current financial year	Column (2) Daily penalty for first 14 days	Column (3) Daily penalty for subsequent days
Less than £100 million	£2,500	£5,000
£100 million or more	£5,000	£10,000

2.  Where the Secretary of State is unable to reasonably determine the net sales income specified in the first column of table 1, the daily penalty payable by a manufacturer or supplier must be calculated by reference to—

(a) the manufacturer or supplier’s Total United Kingdom sales in column (1) of table 2;

(b) the amount specified in column (2) opposite that entry in respect of each day of the contravention; and

(c) the amount specified in column (3) opposite that entry in respect of each subsequent day of that contravention.

Table 2

Column (1) Total United Kingdom sales	Column (2) Daily penalty for first 14 days	Column (3) Daily penalty for subsequent days
Less than £100 million	£2,500	£5,000
£100 million or more	£5,000	£10,000

3.  Subject to paragraph 4, for the purposes of table 2, the Total United Kingdom sales will be calculated at the time the penalty becomes payable by reference to the manufacturer’s or supplier’s total sales in the United Kingdom as shown in its statutory audited accounts or where the manufacturer or supplier does not have statutory audited accounts, its individual accounts, for its most recent complete financial year.

4.  For the purposes of table 2, the Total United Kingdom sales of a new manufacturer or supplier will be assumed to be less than £100 million.