UK Public Procurement Landscape Transformed: What Does It Mean for Medicines?

On February 24, 2025, new rules came into force in the UK transforming the public procurement landscape. The new regime aims to provide a simplified and flexible framework for contracting authorities when conducting procurement processes, including the purchase of medicinal products by the National Health Service (NHS). We set out some of the key aspects of the new regime below.

Key takeaways

• The Procurement Act 2023 consolidates the previous public procurement legislation into a single framework and came into force on February 24, 2025.
• The new procedures give much more flexibility to authorities in how to run the tender. Authorities may take advantage of the competitive flexible procedure to negotiate and discuss tenders with suppliers, but can only do so within the scope of the tender notice. We are increasingly seeing more complex processes being used by the NHS.
• Potential bidders can expect more early market engagement from contracting authorities. Make sure you review pre-tender notices as they give important information about the proposed tender.
• Suppliers should familiarize themselves with the new exclusion grounds, and if any of those apply, should be prepared to provide explanations and mitigations in their tenders. Similarly, suppliers should review the KPIs associated with any new contract, and be aware that their performance may be publicized in a contract performance notice. There is a focus on “underperformance;” it is currently unclear how product shortages would be seen under these provisions.
• Framework agreements can be longer, and allow for new suppliers to be added within the lifetime of the framework agreement. The NHS has already been seeking to include this flexibility in existing tenders.
• The deadlines to issue the claim form for a challenge are still very short (30 days from when the grounds arose), and it is important to be organized and prepare your evidence and contemporaneous notes throughout the tender process.
• Remember that the NHS may also publish clinical guidance alongside the tender, and this may be subject to separate challenge or procedures.

Structure of new regime

The Procurement Act 2023 (Act) consolidates the previous public procurement legislation into a single framework. This is intended to simplify the rules, as the previous regime was spread across multiple pieces of legislation, but was primarily based on the Public Contracts Regulation 2015 (PCR) that implemented the EU Regulation into UK law.

Nonetheless, the Act is not the only applicable legislation to public procurement by the NHS in the UK. The Provider Selection Regime came into force on January 1, 2024 by way of regulations made under the Health and Care Act 2022. This created a new set of rules for arranging healthcare services in England, and it takes NHS healthcare services outside the scope of the Act. This does not however apply to the supply of products.

The legislation that made up the previous framework will remain relevant for any procurements started before February 24, 2024. In those cases, the procurement process and the resulting contract will be governed throughout their life cycle by the relevant legislation that was applicable when the process commenced. In addition, both the Act and the Provider Selection Regime do not apply in Scotland, as these are devolved matters where the pre-existing regime will remain in place.

Key changes to procurement processes

A number of elements of the new public procurement processes have now changed. For tenderers, the changes are mainly procedural, including the framework for the tender process and the timelines, rather than fundamental changes to how the procurement will operate. Nevertheless, it is important to take note of the new procedures.

• New procedures. The regime streamlines the different types of procurement processes, and there will now be two procedure types:

(i) The open procedure
(ii) The competitive flexible procedure

The second is intended to cater for more complex procurements, granting authorities greater flexibility by allowing for negotiations, commercial dialogues, and variant tenders (on the condition that these flexible features are adequately described in the tender notice). While we expect that the open procedure will often be used to procure medicinal products, the flexibility of the competitive flexible procedure may be used for tenders for complex medicinal products and therapies where the NHS prefers to conduct a “therapeutic tender” and where the relevant “solutions” cannot easily be determined without first engaging with suppliers.

• Transparency. The new framework introduces two voluntary notices that authorities may publish:

(i) The “Planned Procurement Notice” is designed to give as much advance information to the market as possible.
(ii) The “Preliminary Market Engagement Notice” is designed to tell the market about the intention to carry out market engagement.

Both of these notices will serve a similar role to the Prior Information Notices (PIN) under the PCR. But the amendments show the government’s heightened emphasis on transparency from the beginning of the procurement process. This will be particularly important for companies where the NHS chooses to use the competitive flexible procedure, as it will set out some of the intentions for the procedure.

In addition, contracting authorities will be obliged to provide assessment summaries to each supplier that submitted an assessed tender. These notices serve the same function as Award Decision Notices under the PCR.

• Procurement principles. The overarching procurement principles have been reformulated. Previously, contracting authorities had to have regard to equal treatment, non-discrimination, transparency, and proportionality.

Equal treatment has been retained as a procurement “objective” under the Act, now being rephrased as an obligation to “treat suppliers the same unless a difference between the suppliers justifies different treatment,” which is terminology based on case law arising from the hepatitis C tender. Transparency and proportionality are no longer mentioned as explicit principles or objectives, but are arguably implicit in the new requirements of the Act and will still be relevant to authorities. For example, the new pre-tender notices show that transparency remains important.

In addition, contracting authorities must have regard to the importance of the following:

(a) Delivering value for money
(b) Maximizing public benefit
(c) Sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions
(d) Acting, and being seen to act, with integrity

• Moving from Most Economically Advantageous Tender to Most Advantageous Tender. Under the previous regime, the legislation required contracting authorities to choose the most economically advantageous tender. The Act removes the term “economically,” requiring contract awards to be made to the “most advantageous tender.

Pricing will still be a highly relevant consideration under the new regime. However, as we set out above, the Act introduces new factors that contracting authorities must regard when assessing tenders. For example, a broad range of factors could be considered under the heading “maximising public benefit,” so its inclusion arguably represents a shift in the emphasis away from price. However, in relation to medicinal products, we anticipate that price will still be the primary factor in determining the outcome of a tender.

• Framework agreements. Framework agreements have been retained under the Act, although can now be for up to eight years, rather than four. Further, the new regime has an additional “open framework” procedure. Authorities can use this procedure to appoint new suppliers within the lifetime of the framework agreement. We know that the NHS is keen to admit companies to a tender throughout the lifetime of the framework agreement, for example, if a new product is launched or a generic company enters the market. The new regime makes this process easier and more transparent.
  
  
• Expanded list of exclusions. The Act introduces new mandatory and discretionary grounds for exclusion from a tender process. Discretionary grounds have been expanded in areas such as poor performance, labor misconduct, and national security threats, which the UK government says will enable “contracting authorities to take tougher action on underperforming suppliers and suppliers who pose unacceptable risks.” It is currently unclear how product shortages would be seen under the provisions.

The effort to exclude and discourage underperforming suppliers can also be seen in the new requirement for contracting authorities to establish KPIs in respect of contracts valued over £5 million, and to publish annual contract performance notices, detailing the success of the contract against these KPIs.

Challenging a tender

The deadlines to challenge public procurement decisions remain extremely tight. Under the PCR, the publication of an Award Decision Notice would trigger a standstill period of 10 calendar days, during which time the contracting authority was not permitted to enter into the contract. Under the Act, the mandatory standstill period is a similar period of eight working days.

Where a challenge is brought within eight working days from the date of the Contract Award Notice, an automatic suspension is granted. The legal test for whether the court should lift an automatic suspension has changed under the Act. Previously, the test largely favored the contracting authorities, as claimants had to demonstrate that damages would not be an adequate remedy. While this is still a feature of the test, this is now one factor for the court to consider, instead of a reason to strike out a claim. It remains to be seen whether there will be any difference to the judicial approach when automatic suspensions under the new regime are challenged.

The overall time limit for commencing proceedings for a challenge remains 30 calendar days from the date on which the bidder knew or first ought to have known about the circumstances giving rise to the claim. It is important to remember that this period may begin to run before the publication of the Contract Award Notice or assessment summary. For example, if an issue comes to light in the preliminary market engagement notice before a tender is even submitted, the clock would start as soon as the supplier was aware or should have been aware of their potential cause of action.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.