Managing medicines: Commissioning

Last updated: Thursday, February 18, 2016

Commissioning High Cost Medicines 

The services hospitals provide are either commissioned nationally by NHS England or locally by CCGs. The terms of the arrangements, including payment and reimbursement of high cost medicines, are managed via contracts between the provider (e.g. your Trust) and the responsible commissioner. 

Payment arrangements for High Cost Medicines 

National “Payment by Results (PbR)” tariff arrangements are reviewed and issued each year by Monitor, the regulator for health services in England. This includes a list of high cost medicines which are excluded from the normal tariff of payments and require separate reimbursement by the responsible commissioner. These are often termed “PbR excluded” or “PbRx” drugs.

Responsible commissioners 

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Although Monitor decides the tariff payment rules for medicines, Commissioners may choose not to adopt the tariff and issue a “block” of funding to the provider to manage expenditure on specified medicines. Commissioners also decide how medicines should be used. The Commissioner is responsible for deciding whether or not a treatment will be routinely funded for defined groups of patients and the process for dealing with “exceptions” – known as an individual funding request (IFR) approval process.

NHS England is responsible for commissioning specialised services and the related PbRx high cost medicines as agreed nationally, by guidance from NICE or consensus guidance from a Clinical Reference Group (CRG). The details are published in what is known as “The Manual” and the associated medicines in the Indications for NHS England Drugs List.

All other services and related PbRx medicines are commissioned locally by CCGs following NICE guidance or local arrangements agreed via Area Prescribing Committees. Details are often published on a CCG’s website.

Individual Funding Requests (IFRs) 

An IFR is a request to the responsible commissioner to fund healthcare for an individual who falls outside the range of services and treatments that they have agreed to routinely commission and fund. Requests generally fall into 3 categories:

  • The patient has a rare condition 
  • The patient has a more common condition but claims that the usual pathway doesn’t work for them 
  • The patient wants to take advantage of a medical treatment that is novel, developing or unproven 

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The principle of exceptionality is the key consideration for assessing IFR, typically demonstrating that:

  • The patient is significantly different to the general population of patients with the condition in question; AND 
  • They are likely to gain significantly more benefit from the intervention than might be normally expected for patients with that condition. 

When handling IFR requests it is important to ensure they are directed to the correct commissioner to avoid delays in patient care.


  • Find out how high cost medicines are reimbursed in your hospital- via tariff or block. What difference does this make to the incentives for making savings on their use? 

  • Does your hospital have a contract with NHS England for providing a range of specialised services? 

  • Find out the arrangements for processing IFR requests in your hospital.