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Technical changes to Drug Tariff in England to go ahead

The Government is to progress all of the proposals put forward in a 2019 consultation on technical adjustments to the way it reimburses community pharmacy contractors in England for items dispensed against NHS prescriptions. The eight proposals are to be discussed in detail with the PSNC.

The proposals include using actual purchase, sales and volume information already obtained in the quarterly collection under the Health Service Products (Provision and Disclosure of Information) Regulations 2018 to set Category A reimbursement prices.

Currently manufacturers’ and wholesalers’ price lists are used to set prices, and these do not necessarily reflect actual selling prices to pharmacy contractors.

The Government says its proposed system would not be so dependent on the retrospective medicine margin survey to find the retained medicine margin or adjust reimbursement prices as needed to deliver the agreed amount of margin.

The Government also plans to split the discount deduction scale into 2 separate scales, one for generic medicines and one for branded medicines. This will, on average, improve fair access to the medicine margin for community pharmacies, it claims.

Around 40 per cent of expenditure on specials are on imported tablet and capsule products, the prices of which vary enormously, says the Government. It plans to include special capsules and tablets with a reimbursement price in Part V111 of the Drug Tariff.

To address the issue where suppliers of branded generics price them below the Category M price - making them appear cheaper and encouraging CCGs and prescribers to prescribe the product by brand rather than generically – the Government plans to add less medicine margin to those generic medicines for which branded equivalents are available, and add more medicine margin on all other Category M medicines.

Two options are to be explored for Category C products where the product is prescribed generically but there is more than one supplier. To ensure the Tariff price more accurately reflects the purchase price the Government proposes to use a weighted average of suppliers’ list prices, or use actual sales and volume data from suppliers.

Full details of the consultation and responses can be found here.



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