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New products entering Cat M

Another factor affecting reimbursement will be new products entering Cat M for the
first time. This generally happens when products with reasonably high volumes become
available as generics. This will typically result in a net downward impact on overall
reimbursement, because the generics will be cheaper than what was previously available.
The overall intended NIC for the new Cat M entrants will be added on-top of the existing
Target NIC for Cat M. In other words, when new products are included, the overall Cat M
Target NIC increases.

Practical example – October 2023 Drug Tariff

In the October 2023 Drug Tariff, there was a significant reduction in overall
Category M reimbursement levels. This was the aggregation of several components.

The following figures are based on CPE’s estimates.
a. Adjustments for Apixaban market movements: c.-£55m
b. Adjustments for other medicines market movements: c.-£11m

c. Margin adjustment - -£21m
i. Of which, ad-hoc adjustment due to phasing out of the extra £100m that
had previously been given in the Drug Tariff - -£16.7m
d. New entrants to category M – c.-£5.9m

Oct DT movements - quarterly impact (£m)
£0.0

-£10.0
-£20.0
-£30.0

-£40.0
-£50.0
-£60.0 -£54.8

-£70.0 -£11.0
-£5.9
-£80.0
-£90.0
-£21.0 -£92.7
-£100.0
Apixaban Other like-for- New entrants Margin Total Oct DT
reductions like medicine adjustments movement
reductions

Although the overall reimbursement Component Change
movement in the October 2023 Drug Tariff
was very large, this was mainly due to Apixaban market movements c. -£55m
components which are tracking the underlying Other medicine market movements c. -£11m
market, or following routine procedures.
New entrants c. -£5.9m
Only the margin survey outturn component is
subject to negotiation, which was the smallest Margin adjustment due to phasing -£16.7m
out of extra £100m
component of the Oct 2023 changes. Margin adjustment due to outturns
from margin survey -£4.3m

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