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Drug pricing

Pharmacy negotiators consider move to quarterly margins survey

The Pharmaceutical Services Negotiating Committee (PSNC) is considering whether a quarterly margins survey would provide an “overall smoother delivery of margin” for community pharmacy.

The move from what is currently an annual survey was discussed at the PSNC’s quarterly meeting in November 2019.

In a summary report of the meeting, published on 3 December 2019, the PSNC said its funding and contract subcommittee had “considered estimates of the current margin run rate for 2019/2020 and whether the October 2019 Category M prices had fed through to contractors as intended”.

It added that the committee also considered whether a quarterly survey “might bring benefits for contractors in allowing for more frequent adjustments and overall smoother delivery of margin”.

The survey is intended to assess the level of profit that pharmacies are making for reimbursement of drugs in Category M of the NHS Drug Tariff.

The discussion comes after the government published proposals in July 2019 to reform the Category M drug reimbursement process to ensure that pharmacy contractors receive equitable access to the medicines margin, which is worth £800m annually.

During the same month, the PSNC announced that Category M reimbursement prices would increase by £15m per month to ensure the overall amount of margin delivered during the 2019/2020 financial year would reach the agreed annual sum.

However, community pharmacy had previously seen a £10m per month reduction in Category M reimbursement prices between November 2018 and March 2019, in order to repay excess margin earned by pharmacies in previous years. This resulted in some pharmacies losing £2,000 on their payments for January 2019.

The Department of Health and Social Care declined to comment.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2019.20207430

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