The costs of branded medicine are controlled by the Pharmaceutical Price Regulation Scheme and the statutory scheme for branded medicines. For unbranded generic medicines, the Department encourages competition between suppliers to keep prices down. In primary care, community pharmacies are incentivised to source products at the lowest possible cost and in secondary care, competitive tenders ensure value-for-money to the National Health Service.
Where competition does not appear to be working, the Department alerts the Competition and Markets Authority (CMA). Where the CMA finds that a company has breached competition law by charging excessive prices, it can impose a fine as well as order companies to reduce their prices. In those instances the Department can and does seek damages and invests that money back into the NHS.