Abbvie Ltd v The NHS Commissioning Board (NHS England)

In procurement, equal treatment does not require identical treatment of bidders whose relevant competitive positions differ. A difference must be assessed in context, having regard to the objective of effective competition. A contracting authority has a margin of appreciation when determining whether situations are comparable and selecting award criteria, but no such margin remains once unequal treatment is established.

Differential treatment is lawful if it is not arbitrary or excessive and, where required, is a proportionate means of achieving a legitimate aim. Proposed contractual terms are part of the procurement documents and fall within the procurement equality and transparency obligations.

The claimant pharmaceutical company challenged NHS England’s procurement of hepatitis C treatments and elimination initiatives. It alleged that the dummy price mechanism under the Revenue Capped Model unfairly advantaged a bidder unable to supply the whole market, and that fixed fees under the Unmetered Access Model could require suppliers to provide treatments beyond their commitments without equivalent remuneration.

The claimant sought declarations that the Invitation to Participate in Dialogue and Invitation to Submit Final Tenders were unlawful and orders setting them aside under regulation 97 of the Public Contracts Regulations 2015. The issues were whether the mechanisms breached the equal treatment duty and, if so, whether they were objectively justified.

1. RCM and dummy price mechanism. MSD and AbbVie were not in comparable positions for MS2 because MSD could supply only MS1, whereas AbbVie could supply MS1 and MS2. That difference pre-existed the procurement design. The dummy price mechanism therefore did not, in itself, breach equal treatment. The fact that the same evaluation methodology applied to all bidders did not alter that conclusion.
2. The authority nevertheless had no free rein to adopt differential treatment. It could not use a measure that was arbitrary or excessive, unduly favoured a bidder, or prevented assessment of the most economically advantageous tender under regulations 18 and 67 of the Public Contracts Regulations 2015. The evidence showed that AbbVie could beat MSD and win the Gold Lot through its bids. No breach was established.
3. Alternatively, the dummy price mechanism was objectively justified. Its legitimate aims included facilitating whole-market, three-way competition; securing better prices and elimination investments; maximising health benefits; and enabling like-for-like comparison. The mechanism was suitable and proportionate. The Bridging Tender and alternative dummy prices were not shown to be equally effective or less restrictive.
4. UAM and fixed fees. The fixed-fee provisions applied the same rules to comparable bidders in a free-prescribing environment. Differences in product popularity were competitive advantages which the procurement rules were not required to neutralise. The claimant’s assumption that MSD would make unrealistic treatment commitments was inconsistent with the tender documents and the reimbursement and disqualification safeguards.
5. Proposed contractual terms are procurement documents and fall within the scope of the procurement obligations. The fixed-fee provisions were therefore reviewable under the Regulations. Even if they involved unequal treatment, they were objectively justified by the legitimate aim of encouraging investment in elimination solutions. The claim was dismissed.