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Publication, Part of

Prescribing Costs in Hospitals and the Community 2019-2020

Official statistics

Sources and definitions

Definition of terms

Cost at list price

The basic cost of a drug excluding VAT and is not necessarily the price the NHS paid. It does not take account of any contract prices or discounts, dispensing costs, fees or prescription charges income, so the amount the NHS paid will be different.

Net Ingredient Cost (NIC)

The basic cost of a drug as used in Primary Care. This is the cost at list price excluding VAT, i.e. the price listed in the national Drug Tariff or in standard price lists.  NIC is used in Prescription Services reports and other analyses, as it standardises cost throughout prescribing nationally, and allows comparisons of data from different sources.


When a hospital pharmacy supplies medication to a ward or operating theatre, or to a patient who is being discharged.

Data sources

The figures in this report are derived from both the HPAI database provided by the commercial company IQVIA and the data warehouse maintained by the NHS Prescription Services Division, part of the NHS Business Services Authority. Direct comparisons between the databases is not straightforward as medicine classification in the HPAI is by the European Pharmaceutical Marketing Research Association (EphMRA) version of the Anatomical Therapeutic Chemical (ATC) system, whereas in the data provided by NHS Prescription Services, the British National Formulary (BNF) classification is used.

Hospital data

Data for hospital use of medicines is provided by IQVIA who collect data from pharmacies in hospital Trusts across the UK, to produce the Hospital Pharmacy Audit Index (HPAI) database. The data relating to England has been made available by IQVIA. Access to the HPAI data is regulated by a contract between IQVIA and NHS Digital. Details of the major conditions imposed by the contract are outlined in Limits on access to hospital data. IQVIA updates historic data as they receive revised figures from individual hospitals. The figures in this report may therefore differ from figures published previously.

Unlike primary care, there is no central NHS collection of information on medicines issued and used in NHS hospitals. IQVIA collects and collates this data on a commercial basis. The HPAI is based on issues of medicines recorded on hospital pharmacy systems. The information is sent to IQVIA each month electronically by hospital pharmacy departments. Issues refer to all medicines supplied from hospital pharmacies to wards, departments, clinics, theatres, satellite sites and to patients both in out-patient clinics and on discharge. Therefore, the HPAI monitors usage levels by hospitals rather than purchases by Trusts. This avoids any bias introduced by some hospitals which purchase on behalf of a consortium of Trusts.

Data on medicine use is collated as quantities issued (packs) and no financial information is collected. There is no equivalent to the concept of an item as is commonly used in analysing primary care data. Costs are calculated from quantities by IQVIA using the Drug Tariff and other standard price lists. Many hospitals receive discounts from suppliers, particularly for high volume drugs, which are commercially confidential.  Therefore, the costs reported in this publication do not represent the actual amount paid by hospitals. They are a proxy for utilisation and are not suitable for estimating financial pressures. In this report hospital costs are referred to as estimated costs.

Primary care data

Data for medicine use in primary care is obtained from the electronic Prescribing Analysis and Cost tool (ePACT2) system, maintained by NHS Prescription Services, a division of NHS Business Services Authority, which covers prescriptions prescribed by GPs, nurses, pharmacists and others in England and dispensed in the community in the UK. The data available is from April 2014. Prescriptions written in England but dispensed outside England are included. Prescriptions written in hospitals or clinics and by dentists that are dispensed in the community, are also now included in the publication.

Prescriptions issued and dispensed in hospitals and private prescriptions are not included in the data. 

All figures in this report have been revised and may differ slightly from those in previous publications.

The primary care figures in this report differ from the figures given in the statistical series, Prescription Cost Analysis. The latter report uses calendar year figures relating to all prescriptions written in the UK and dispensed in the community in England including those written by hospital doctors and by dentists but excludes those prescriptions written in England but dispensed elsewhere.

Last edited: 12 November 2020 1:39 pm