Total pharmaceutical expenditure falls for third year in a row

Total pharmaceutical expenditure has fallen for the third year in a row, new official figures show.

Data from the Office for National Statistics (ONS) shows that total pharmaceutical expenditure in 2024 was £35.7 billion in real terms, 3.9% lower than the £37.1 billion real terms expenditure reported in 2023.

This is down from a peak of £46.2 billion in 2021 and the lowest level of real-terms expenditure in ONS figures going back to 2017.

Meanwhile, total pharmaceutical expenditure in nominal terms has fallen three years in a row from a peak £38.2 billion in 2021 to £34.4 billion in 2024, the ONS figures show.

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The ONS attributed this change to a fall in both government and non-government spending.

It said: ‘An overall fall of 3.9% in total pharmaceutical expenditure in real terms was caused by reductions in both government and non‑government spending.

‘A fall in spending on over-the-counter medicines and drugs used as part of wider treatments contributed to lower pharmaceutical spending in 2024.’

The ONS said that total pharmaceutical expenditure incorporated spending on prescribed drugs, over-the-counter (OTC) medicines, vaccines, and the consumption of pharmaceuticals within wider courses of treatment.

Its figures also showed that the amount spent on OTC medicines fell to a new low of £7.6 billion in 2024, making up 21.3% of the total pharmaceutical expenditure that year. This compares with £8.1 billion and 24.1% in 2023.

More than half (54.0%) of the total expenditure in 2024 related to community-prescribed medicines, 7.0% related to immunisation programmes, and 17.8% related to medicines administered as part of courses of treatment.

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The drop in pharmacy expenditure comes as the ONS figures show that healthcare expenditure grew by 3.8% in real terms from 2023 to 2024 – from £320 billion to £332 billion.

The ONS said that its measure of total pharmacy expenditure represents net expenditure on medicines, accounting for pharmaceutical rebates, as well as payments made through voluntary and statutory payback schemes such as the 2024 voluntary scheme for branded medicines pricing, access and growth (VPAG).

It added that the scale of payments made through payback schemes each year may be affected by previous years’ sales and payments, which can influence growth in overall pharmaceutical expenditure.

Earlier this year a report by PAGB found that the OTC medicines sector saves the NHS £6.4bn a year and delivers significant economic and productivity benefits.

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The consumer healthcare association said wider adoption of self-care could unlock a further £1.7bn in annual NHS savings by reducing demand for GP appointments and prescription medicines.