England April 2017 to March 2022
Published 10 November 2022
Key findings
The total cost to NHS commissioners (known as actual cost in primary care data) in England, for the issue of medicines, appliances, and medical devices in 2021/22 is estimated to be £17.2 billion. This includes a deduction of £619 million for central rebates. The total cost without central rebates was £17.8 billion, an increase of 8.32% from £16.4 billion in 2020/21.
In 2021/22, the cost to NHS commissioners in England for medicines:
- prescribed in primary care and dispensed in the community was £8.90 billion, 50.0% of total expenditure
- issued in hospitals was £8.77 billion, 49.3% of total expenditure
- prescribed in hospitals and dispensed in the community was £85.1 million
- prescribed by dentists and dispensed in the community was £29.3 million
In 2021/22, the BNF Chapter 8 – Malignant Disease and Immunosuppression had the highest spend across all settings of £3.11 billion when using Net Ingredient Cost (NIC) for items dispensed in the community, 16.9% of the total spend. Of this spend, £2.95 billion was for medicines issued and dispensed in hospitals.
The average costs per capita when using NIC for items dispensed in the community for medicines, appliances, and medical devices prescribed in England in 2021/22 across all settings was £324. This is an increase from £301 in 2020/21.
1. Introduction
1.1 Scope
These statistics cover NHS prescriptions and medicines issued in England. This includes:
prescriptions issued by GP practices and community prescribers in England that have been dispensed in the community in the UK (excluding Northern Ireland)
prescriptions issued by hospitals in England that have been dispensed in the community in the UK (excluding Northern Ireland)
prescriptions issued by dental practitioners that have been dispensed in the community in the UK (excluding Northern Ireland)
medicines issued in hospitals in England that have been dispensed via the hospital pharmacy, homecare companies and outsourced outpatient pharmacy partnerships
But excludes:
prescriptions issued through Justice and Armed Services health services in England commissioned by NHS England & Improvement (NHSEI) but not dispensed in the community – this covers pharmacy, appliances, Dispensing Doctors (DD) and Personally Administered Items (PADM)
any medicines issued in hospitals in England but not managed via the hospital pharmacy service
dressings and devices issued in secondary care as supply of these is usually made via the NHS Supply Chain
This publication aims to explore the costs of medicines prescribed within both primary and secondary care in England. These statistics detail:
cost breakdowns by financial year and month within each setting
cost breakdowns by BNF Chapter and BNF Section level by financial year and setting
financial year cost breakdowns in each setting by Integrated Care Board (ICB)
a view of the data down to financial year, BNF Chapter, BNF Section and ICB combined
1.2 Data sources
Data for this publication is collated from 2 sources. Rx-Info collect data from hospital pharmacy systems including the actual costs paid with discounts. This data is accessed and extracted using the Define system operated by Rx-Info. Data is available from April 2017 onwards.
Data for prescription items dispensed in the community are taken from the NHSBSA Enterprise Data Warehouse and contain 2 different cost measures, Net Ingredient Cost (NIC) and Actual Cost, full definitions for these measures can be found in section 1.3 – Definitions. Actual Cost has been included in these statistics alongside NIC at a national level to give a more accurate measure of the total cost to NHS commissioners for the prescribing of medicines, appliances, and medical devices.
For breakdowns below national totals, such as ICB or BNF section, NIC has been used for prescription items dispensed in the community due to limitations of Actual Cost and how it is calculated.
Data for Central Rebates is provided by the Commercial Medicines Unit, a part of NHSEI. It is not possible to include the central rebates in the figures broken down by ICB or BNF category owing to commercial confidentiality. The central rebate figure includes rebates from arrangements NHSEI have agreed with pharmaceutical companies following successful negotiations to commission a variety of treatments both in the cancer drugs fund (CDF) and in routine commissioning. This includes treatments for both rare diseases and more common conditions.
1.3 Definitions
Throughout this publication when ‘costs’ are referred to within hospitals they are the actual costs paid (including applicable VAT) for medicines, appliances, and medical devices which have been issued in NHS hospitals in England by the hospital pharmacy, following any discount.
For prescription items dispensed in the community, Actual Cost is the cost recharged to NHS commissioners for the provision of drugs, appliances, and medical devices by dispensing contractors. It is calculated as the basic price of a product (Net Ingredient Cost) less the national average discount percentage (NADP) plus payments for consumables, out of pocket expenses (OOPE), and payments for containers:
Actual Cost = NIC * (1 – NADP) + payments for consumables + OOPE + payment for containers
The NADP is calculated using the discount rates applied to individual dispensing contractors according to the Drug Tariff for England and Wales for Pharmacy and Appliance contractors and the General Medical Services Statement of Financial Entitlement Annex G Part 1 for Dispensing Doctors and Personal Administration accounts.
Actual cost is not reflective of the payment made to a dispensing contractor for the cost of the individual drugs dispensed and excludes other fees paid that a prescription item may attract.
Net Ingredient Cost (NIC) for prescription items dispensed in the community is the basic price given either in the Drug Tariff or is determined from prices published by manufacturers, wholesalers, or suppliers. Basic price is set out in Parts VIII and IX of the Drug Tariff. For any drugs not in Part VIII, the price is usually taken from the manufacturer, wholesaler or supplier of the product. This basic price also includes retained margin, where applicable. This retained medicine margin contributes to the provision of pharmaceutical services alongside the other agreed fees and allowances.
These statistics use the therapeutic classifications defined in the BNF to group medicines together based on their primary therapeutic indication. The NHSBSA uses and maintains the classification system of the BNF implemented prior to the release of edition 70, including the six pseudo BNF chapters (18 to 23) created by NHS Prescription Services used to classify products that fall outside of chapters 1 to 15.
ICBs are statutory organisations responsible for bringing the NHS together locally to improve population health and establish shared strategic priorities within the NHS. They took over the functions of Sustainability and Transformation Partnerships (STPs) in July 2022.
Prescribing volumes are not included in this publication. Unlike in the primary care dataset, where item level data is available, in secondary care, data is collated as quantities issued. The concept of a prescription item does not exist for secondary care medicines data.
2. Results and commentary
The charts in this report are interactive and allow you to isolate the topics that you are interested in by selecting or deselecting a series from the legend of the chart. For example, if you only want to view a single series on a chart, you can click the series names you are not interested in within the legend of the chart. This will remove the item from the charts. If you wish to subsequently include them, just click their legend entry again.
2.1 Costs by setting
Figure 1: Total costs to NHS commissioners by setting between 2017/2018 and 2021/2022
These figures use actual costs for both items dispensed in the community and those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table One
The actual cost of items prescribed in primary care in England in 2021/22 was £8.90 billion, 50.0% of total expenditure. In 2017/18 the actual cost of items prescribed in primary care in England was £8.26 billion, 54.9% of total expenditure.
The cost of medicines issued in hospitals in England in 2021/22 was £8.77 billion, 49.3% of total expenditure. In 2017/18 the cost of medicines issued in hospitals in England was £6.63 billion, 44.1% of total expenditure.
Figure 2: Total costs by setting between 2017/2018 and 2021/2022
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Two
The NIC of items prescribed in primary care in England in 2021/22 was £9.49 billion, 51.6% of total expenditure. In 2017/18 the NIC of items prescribed in primary care in England was £8.88 billion, 56.6% of total expenditure.
The cost of medicines issued in hospitals in England in 2021/22 was £8.77 billion, 47.7% of total expenditure. In 2017/18 the cost of medicines issued in hospitals in England was £6.63 billion, 42.3% of total expenditure.
Figure 3: Percentage change in costs from previous financial year by setting between between 2017/2018 and 2021/2022
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Three
The cost of items within primary care in the community in England in 2021/22 was £9.49 billion. This was a 0.74% increase of £70.0 million from £9.42 billion in 2020/21 and a 6.93% increase of £616 million from £8.88 billion in 2017/18.
The cost of items dispensed in hospitals in England in 2021/22 was £8.77 billion. This was a 16.8% increase of £1.26 billion from £7.51 billion in 2020/21 and a 32.2% increase of £2.13 billion from £6.63 billion in 2017/18.
In 2021/22 the total costs paid for drugs, dressing, appliances, and medical devices was £18.4 billion. This was an increase of 7.86% from the £17.0 billion paid in 2020/21 and an increase of 17.3% from the £15.7 billion paid in 2017/18.
Figure 4: Total costs by setting between April 2017 and March 2022
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Four
In March 2022, the total costs paid for medicines, appliances, and medical devices which have been issued in NHS hospitals in England was £814 million. This in an increase of 11.8% on the £728 million paid in March 2021 and an increase of 40.8% on the £578 million paid in March 2018.
2.2 Costs by BNF Chapter
Figure 5: Total costs by BNF Chapter in the 2021/2022 financial year
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Five
In 2021/22 the largest single spend for a BNF Chapter in any setting was for medicines in chapter 8 - Malignant Disease and Immunosuppression issued in hospitals at £2.95 billion. This represents 33.6% of the total spend within hospitals. This is also the BNF Chapter with the highest costs across all combined settings in 2020/21 at £3.11 billion, 16.9% of the total spend of £18.4 billion.
Within primary care in the community in 2021/22 chapter 2 - Cardiovascular System accounted for the largest spend at £1.61 billion. This was 17.0% of the total costs in primary care prescribing dispensed in the community.
Within hospitals in 2021/22 there was a spend of £382 million which is not accounted for under any of the BNF Chapters. These are drugs manufactured as specials, dressings, appliances, and medical devices which are not authored on the Dictionary of Medicines and Devices (dm+d).
Figure 6: Top 10 BNF Sections by spend across all settings in the 2021/2022 financial year
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Six
In 2021/22 the largest single spend for a BNF Section in any setting was for medicines in section 0801 - Cytotoxic Drugs issued in hospitals at £1.98 billion. This represents 22.6% of the total spend within hospitals.
Within primary care in the community in 2021/22 section 0601 - Drugs Used in Diabetes accounted for the largest spend at £1.25 billion. This was 13.2% of the total costs in primary care prescribing dispensed in the community.
2.3 Costs by ICB
Figure 7: Total costs by ICB in the 2021/2022 financial year
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Seven
NHS Greater Manchester was the ICB with the highest costs across all settings of £1.11 billion in 2021/22.
Data under the ‘Undefined’ ICB relate to costs in both the primary and secondary care datasets which we have been unable to map to an ICB.
Data around dental in the community has not been included in figure 5 as dental data is captured under a national code and not available at ICB level.
ICB costs in secondary care are based on the ICB in which the hospital is located. Not all spend is specifically for that ICB (for example, patients may be referred to a hospital outside of their usual ICB of residence).
Figure 8: Average costs per capita by ICB in the 2021/2022 financial year
These figures use Net Ingredient Costs (NIC) for items dispensed in the community and actual costs for those issued in hospitals.
Source: Summary Tables - Prescribing Costs in Hospitals and the Community - Table Seven
The average cost per capita for medicines issued in all settings in England in 2021/22 was £324. This is an increase from £301 in 2020/21 and an increase from £274 in 2017/18.
NHS Birmingham and Solihull was the ICB with the largest average per capita costs in 2021/22 at £516. NHS Hertfordshire and West Essex was the lowest at £224.
3. Changes to this publication
We have included the Actual Cost for prescription items dispensed in the community at national level to provide a more accurate measure of the total cost to NHS commissioners for the provision of medicines, appliances, and medical devices in England. Data for Actual Cost can be found in the supporting summary tables for this publication. Please see section 1.3 - Definitions for guidance on the different cost measures presented in these statistics.
In July 2022 ICBs replaced STPs as legal entities within the NHS. These statistics have been presented with the latest NHS organisational structure, including historical data to allow easier comparisons to be made across the time period. Users should always use the latest statistics available when carrying out any analysis.
For full details of the changes made please refer to the Background Information and Methodology note released alongside these statistics.
4. About these statistics
4.1 Uses of these statistics
These statistics have a variety of uses including:
obtaining a national view of costs for prescriptions dispensed in hospitals and the community in England across the financial year
analysis of cost trends by BNF Chapter, BNF Section and ICB
allowing public scrutiny of national prescribing habits
4.2 British National Formulary (BNF)
The primary care data used in this publication comes from the NHSBSA Enterprise Data Warehouse (EDW). This includes the split of the data down to BNF Section. The data for secondary care is provided by Rx-Info. Rx-Info use an extract from the dm+d to obtain BNF classifications.
4.3 Time periods reported in this publication
From the 2021/22 publication onward the starting point has switched to April 2017. Secondary care data provided by Rx-Info is only available back to this point. As the RX-Info Define database only holds data from up to 5 years ago, this publication will present a rolling 5 year timescale.
4.4 Geographies included in this publication
Integrated Care Boards (ICB) are health geographies that are formed by NHS organisations, local councils, and others to set out proposals to improve health and care for the local population.
In primary care data the ICB geographies shown use NHSBSA administrative records, not geographical boundaries, and more closely reflect the operational organisation of prescribing organisations than other geographical data sources. Within the secondary care data ICB is provided by Rx-Info who use the NHS Digital Organisation Data Service (ODS) as their source.
4.5 Population statistics included in this publication
Populations by ICB throughout this report are the same for each year and come from the latest ONS population estimates.
4.6 Measures of average
Per capita costs measure the average costs across all settings per person in a given area (England, ICB) in the specified year. It is calculated by dividing the area’s total costs by its total population.
4.7 Planned changes to this publication
This is an experimental official statistic release. Experimental statistics are newly developed or innovative statistics. These are published so that users and stakeholders can be involved in the assessment of their suitability and quality at an early stage. More information on how users can give us their feedback can be found in section 6 of this summary. We will regularly be reviewing the methodology used within the statistics.
4.8 Monthly SCMD data
NHSBSA Information Services also release a monthly data set for Secondary Care Medicines Data via the Open Data Portal (ODP). The ODP is the platform where we host our open data products. The monthly data set is produced from data provided by Rx-Info. This data includes indicative costs rather than actual costs, these are derived from current medicines pricing data held in NHSBSA data systems including the Common Drug Reference (CDR) database and dm+d calculated to a Virtual Medicinal Product (VMP) level.
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6. Feedback and contact us
We invited feedback on the changes made to the Prescribing Costs in Hospitals and the Community Official Statistics publication, including the change of data source. The consultation took place between 15 November 2021 and 4 February 2022. You can find details of this consultation on our website.
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