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Selling Medicines to the NHS as Carbon Requirements Expand

Selling Medicines to the NHS as Carbon Requirements Expand

Pharmaceutical companies now face a significant shift in how they sell medicines to the NHS. Environmental performance has become a formal procurement requirement, not a voluntary commitment. Since April 2024, any company bidding for NHS England medicines frameworks must submit a compliant Carbon Reduction Plan alongside its commercial proposal. This marks a fundamental change in what the NHS expects from suppliers.

The policy reflects something broader than environmental ambition. The NHS controls enormous purchasing power across healthcare supply chains. It has committed to reach net zero for direct emissions by 2040 and for indirect emissions by 2045. Consequently, it now uses procurement rules to push suppliers toward measurable carbon reductions.

Medicines represent a substantial portion of the NHS carbon footprint. Inhalers and anaesthetic gases alone account for roughly 20% of total NHS emissions. Manufacturing, supply and prescribing of other pharmaceutical products contribute a further 17% of the broader carbon footprint. That represents approximately 4.7 million tonnes of carbon dioxide equivalent each year.

These figures explain why procurement policy now extends beyond hospital operations. The NHS increasingly requires suppliers to measure emissions, publish reduction plans and demonstrate progress over defined timescales. For pharmaceutical manufacturers, this means carbon reporting has moved from corporate responsibility departments into core commercial processes.

How the requirements developed between 2022 and 2024

The NHS introduced these obligations progressively through its Net Zero Supplier Roadmap. In April 2022, all new procurements began incorporating a minimum 10% weighting for net zero and social value. This applied across NHS England contracts and established the principle that environmental criteria would influence supplier selection.

By April 2023, suppliers bidding for contracts worth more than £5 million annually were required to publish a Carbon Reduction Plan. Initially, this covered UK Scope 1 and Scope 2 emissions, plus a defined subset of Scope 3 emissions. The requirement applied to large procurements but did not yet extend proportionately across all contract values.

From January 2024, NHS England medicines tenders began requiring the Evergreen Sustainable Supplier Assessment. This separate sustainability questionnaire operates as a procurement condition for pharmaceutical suppliers. It collects environmental data and assigns a maturity score to each company.

In April 2024, Carbon Reduction Plan requirements expanded proportionately to all new NHS procurements, including medicines tenders. Suppliers can no longer treat carbon disclosure as relevant only to large infrastructure or service contracts. Therefore, every pharmaceutical company pursuing NHS business must now prepare compliant documentation regardless of contract size.

The roadmap continues beyond 2024. From April 2027, the NHS plans to require proportionate public reporting of targets, emissions and reduction plans covering global Scope 1, 2 and 3 emissions. This shifts the focus from UK operations to worldwide manufacturing and supply chains. Moreover, from 2028, NHS England is considering product-level carbon footprinting requirements for individual medicines. By 2030, suppliers are expected to demonstrate measurable progress through published reporting as a condition of contract qualification.

What a compliant Carbon Reduction Plan must contain

A Carbon Reduction Plan is not a statement of intent or aspirational policy document. NHS procurement guidance sets specific requirements for content, approval and publication. Each plan must be publicly available on the supplier's website. It must be approved by the board or an authorised company director, which creates formal governance accountability.

Plans must be updated at least annually. This requirement prevents suppliers from submitting a single document and leaving it unchanged for years. Additionally, each plan must include a commitment to achieve net zero by 2050 or earlier for UK operations.

Suppliers must report current UK Scope 1 and Scope 2 emissions. Scope 1 generally covers direct emissions from owned or controlled sources such as company facilities and vehicles. Scope 2 concerns purchased electricity, heat or steam. Furthermore, plans must include a defined subset of relevant Scope 3 emissions.

Scope 3 presents particular challenges for pharmaceutical companies. These value-chain emissions arise from raw material production, contract manufacturing, packaging, freight, distribution, product use and disposal. For many medicines manufacturers, the most material emissions occur outside their own sites. Consequently, a credible plan must address suppliers and manufacturing partners, not only corporate offices and warehouses.

The plan should describe environmental management systems and specific reduction measures that will apply to the contract. It must report emissions in carbon dioxide equivalent across the relevant greenhouse gases covered by the reporting framework. Generic commitments or vague improvement statements do not meet the standard.

The Evergreen assessment operates separately from carbon plans

The Evergreen Sustainable Supplier Assessment is NHS England's main information-gathering mechanism for supplier sustainability. It gives suppliers a maturity score and provides NHS organisations with a consistent route for collecting environmental and wider sustainability data. However, it operates separately from the Carbon Reduction Plan requirement.

NHS guidance confirms that the Evergreen assessment was introduced for medicines procurement from January 2024. Meanwhile, the Carbon Reduction Plan requirement applies to relevant tenders from April 2024. Suppliers must therefore be prepared to provide both documents where the tender requires them.

The assessment operates as a procurement condition rather than a conventional price-scoring exercise in medicines tenders. NHS England explains that medicines procurement mechanisms do not allow the standard 10% net zero and social value weighting to be applied in the same way as other procurements. Instead, the Evergreen submission implements the policy proportionately.

Submission occurs through the NHS procurement portal. The mechanism involves a pass or fail approach, or a condition of award. Suppliers complete the assessment annually rather than for every individual tender. NHS England monitors submissions to ensure that suppliers maintain or improve their sustainability position over time.

NHS Supply Chain has separately stated that from April 2026, suppliers must meet at least Level 1 of the Evergreen assessment to continue doing business with NHS Supply Chain. This creates a baseline threshold that all pharmaceutical suppliers must reach to remain eligible for NHS contracts.

Practical consequences for tender preparation and supply chains

These expanding requirements change the commercial preparation involved in NHS bids. Companies now need sustainability documentation at the same stage as pricing, supply commitments, regulatory information and evidence of product quality. Several practical consequences follow.

Emissions data must be gathered before a tender is published. This includes information from manufacturing and logistics partners, which may require new data-sharing agreements with contract manufacturers, active pharmaceutical ingredient suppliers, packaging providers and freight companies. Therefore, pharmaceutical companies cannot treat carbon reporting as an internal corporate function. It requires supply chain coordination.

Scope 3 emissions are likely to become increasingly important as NHS requirements extend to global operations from 2027. Many pharmaceutical manufacturers operate international supply chains with raw materials sourced from multiple countries, manufacturing sites on different continents and distribution networks covering global markets. Gathering reliable Scope 3 data across these complex networks presents significant operational challenges.

Carbon plans require formal board approval and annual maintenance rather than one-off tender drafting. This creates ongoing governance obligations. Companies must establish internal processes to update emissions data, review reduction measures and approve revised plans each year. Responsibility cannot sit solely with procurement teams or sustainability officers.

The possible introduction of product-level carbon footprinting from 2028 could require data for specific formulations, packaging formats, manufacturing sites and distribution routes. This represents a step change in granularity. Currently, most pharmaceutical companies report emissions at corporate or facility level. Product-level footprinting would require attribution of emissions to individual medicines, potentially down to specific presentations or pack sizes.

Companies with credible reduction programmes may be better positioned as environmental criteria become more demanding. Conversely, those treating carbon disclosure as a compliance exercise risk falling behind competitors who integrate emissions reduction into manufacturing, procurement and logistics strategies. Differentiation may increasingly occur on environmental performance as well as price and clinical value.

Missing or non-compliant documentation can prevent a supplier from qualifying for a framework or being awarded a contract, even where the medicine itself is clinically and commercially competitive. This creates genuine commercial risk. A pharmaceutical company could lose NHS business not because its product is unsuitable, but because its Carbon Reduction Plan is outdated, lacks board approval or fails to cover required emissions scopes.

Summary of key requirements and timelines

The following points summarise the most important information for pharmaceutical suppliers:

Why this policy matters beyond individual tenders

The NHS is one of the world's largest healthcare purchasers. By incorporating carbon disclosure into procurement, it can influence pharmaceutical manufacturing and distribution beyond NHS facilities. The approach also reflects a wider public sector trend in which suppliers are expected to report environmental performance as a condition of accessing government-backed business.

Procurement has become a lever for industrial change. The NHS does not need to regulate every emissions source directly to influence industry behaviour. By requiring plans, disclosure and measurable progress in tenders, it can encourage suppliers to invest in renewable energy, lower-carbon manufacturing, efficient refrigeration, lower-emission transport and reduced packaging. Pharmaceutical companies that might otherwise delay these investments now face commercial pressure to act.

Carbon data may become a product attribute comparable to price or clinical value. The possible move toward product-level carbon footprints would represent a significant development. It could allow procurement teams to compare medicines not only by price, clinical value and supply reliability, but also by emissions associated with a specific product or presentation.

Such comparisons will require consistent methodologies. NHS England has said it will work with suppliers and regulators to determine the scope and method for product-level footprinting. Without common standards, comparisons could be difficult because pharmaceutical emissions may be distributed across complex international supply chains. Different calculation methods could produce incomparable results.

Environmental requirements must be balanced against clinical priorities. Medicines procurement cannot treat carbon reduction as an isolated objective. The NHS must also protect continuity of supply, patient safety, affordability and access to clinically appropriate treatment. Some lower-carbon options may not be suitable for every patient, and changes to manufacturing or logistics must not increase shortage risks.

The emerging framework appears designed to be proportionate. Suppliers are first required to disclose information and maintain a credible plan, while more detailed global and product-level requirements are phased in over time. This gives pharmaceutical companies a transition period to build data systems, engage supply chains and implement reduction measures before the most demanding requirements take effect.

What pharmaceutical companies should consider now

For pharmaceutical companies, the immediate priority is ensuring that every NHS tender submission contains a current, compliant Carbon Reduction Plan and the required Evergreen assessment. Missing documentation can disqualify an otherwise competitive bid. Therefore, procurement teams need access to approved, up-to-date plans before tenders are published.

Companies should establish internal processes for annual plan updates. This includes assigning responsibility for data collection, engaging finance and operations teams to gather emissions information and securing board approval within defined timescales. Carbon Reduction Plans cannot be prepared solely by sustainability or environmental teams. They require input from procurement, manufacturing, logistics and senior leadership.

Supply chain engagement becomes increasingly important as Scope 3 requirements expand. Pharmaceutical manufacturers should review existing contracts with active pharmaceutical ingredient suppliers, contract manufacturers, packaging providers and logistics partners. Data-sharing agreements may need to be established or amended to support emissions reporting. In some cases, supplier selection criteria may need to include environmental performance alongside price, quality and reliability.

Companies should monitor NHS policy developments closely. The roadmap extends to 2030, with significant milestones in 2026, 2027 and 2028. Requirements for global emissions reporting and product-level footprinting will demand substantially more detailed data than current UK-focused plans. Early preparation will reduce compliance risk and may provide commercial advantage as environmental criteria become more demanding.

Internal carbon reduction measures should be evaluated not only for environmental benefit but also for commercial positioning. Investments in renewable energy, efficient manufacturing processes, reduced packaging or lower-emission transport may improve a company's Evergreen maturity score and strengthen its competitive position in future tenders. Conversely, delaying action may create disadvantage as NHS procurement teams gain experience in evaluating supplier sustainability performance.

We support pharmaceutical companies with carbon reporting and ESG compliance for public sector procurement. This includes preparing Carbon Reduction Plans that meet NHS requirements, gathering Scope 1, 2 and 3 emissions data and developing credible reduction strategies aligned with net zero commitments.

The direction of travel is clear. NHS medicine procurement is shifting from a system focused predominantly on price, clinical value and supply terms toward one that also evaluates how products are manufactured, transported and managed across their lifecycle. Companies that treat carbon reporting as a strategic supply chain function will be better placed as the NHS moves toward global emissions reporting in 2027 and potential product-level requirements from 2028.

Where to find authoritative guidance and policy documents

The NHS England Greener NHS supplier page provides comprehensive guidance on environmental requirements for suppliers, including the Net Zero Supplier Roadmap and procurement policy updates.

The Cabinet Office Procurement Policy Note 06/21 sets out the cross-government framework for Carbon Reduction Plans in public sector procurement, which forms the basis for NHS requirements.

NHS Supply Chain publishes detailed sustainability guidance for suppliers, including information on Carbon Reduction Plans, Evergreen assessments and environmental obligations for companies doing business with NHS Supply Chain.

The Specialist Pharmacy Service provides medicines-specific sustainability resources, including guidance on how environmental requirements apply to pharmaceutical procurement and frameworks.

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