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Update to audit reports for branded medicines schemes

Author: ICAEW Insights

Published: 02 Mar 2023

The Department of Health and ICAEW have reviewed the audit reports required under the scheme to ensure they continue to comply with International Standards on Auditing (UK).

ICAEW has joined the Department of Health and Social Care to review the audit report required under the 2018 Branded Health Service Medicines (Costs) Regulations. 

The report must accompany the Audited Annual Sales Report for the voluntary and statutory schemes that the Regulations encompass, and the review aims to ensure that it continues to comply with International Standards on Auditing (UK) issued by the Financial Reporting Council, including ISA (UK) 800 and ISA (UK) 805.

To ensure that branded medicines stay within affordable limits and deliver value for money for the NHS, the Department of Health and Social Care operates two price regulation schemes. These apply to all branded, licensed medicines that are available on the NHS.

The two schemes are the 2019 Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) and the Statutory Scheme set out in the 2018 Branded Health Service Medicines (Costs) Regulations.  

Manufacturers or suppliers of branded medicines can elect to sign up to the VPAS. Most choose to do so, as the scheme contains several incentives that are not provided in the statutory scheme. If a company does not choose to join the voluntary scheme, then it will be subject to the Statutory Scheme.

Despite the differences between the two schemes, both contain a requirement for manufacturers or suppliers of branded medicines to submit an Audited Annual Sales Report in addition to their statutory accounts, which must be submitted within nine months of the end of the entity’s financial year end.

This review has led to some revisions and an updated audit report for each scheme, which can be accessed below. Auditors can choose to apply the revised reports to any existing unsigned engagements if they wish. However, it will be mandatory to use the updated Audit Reports for all audit engagements undertaken for Audited Annual Sales Reports December 2022 or later.

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