The Pharmaceutical Journal Vol 265 No 7108 p189
August 5, 2000 Business

Pharmacy Partners offers daily cash payments for NHS dispensing

Pharmacy Partners (PP), a new business service for community pharmacy contractors, is offering to make daily cash payments to pharmacies based on their National Health Service dispensing. The new service works in a similar way to merchant credit card arrangements. Each day, the contractor records the total number of prescriptions dispensed, the number of prescription charges collected, the total number of items dispensed and details of any high-value prescription items. These details are transmitted to PP using a credit card terminal supplied by the company. The prescriptions are sent to the Prescription Pricing Authority for pricing in the normal way. PP calculates the amount owed, using a previously determined average prescription value for each pharmacy, and makes payment by electronic bank transfer on the third day. The company charges a fee, typically 2 per cent, of the payments made. High-value items are priced separately using the Drug Tariff. At the end of the month, PP receives the normal summary from the PPA and performs a reconciliation and any necessary adjustments to the payments. The PPA makes its payment directly to PP under an established mechanism for redirecting payments to contractors.

Details of prescription numbers and items dispensed are transmitted by credit card terminal

In addition to the ongoing daily payments, PP would also make an initial payment covering the previous 52 days' dispensing when a pharmacy signed up for the service.
Speaking at a press briefing in London on July 27, Mr Ian Paterson (chairman, PP) said that the company's service would free the cash which pharmacists had locked away by the 52-day NHS payment cycle and allow them to invest in their businesses. Pharmacists could invest in refurbishing their premises or take advantage of early settlement discounts with creditors.
Mr William Burkett (executive vice-chairman, PP) and Mr Andrew Douglas (chief executive, PP), the co-founders of the company, explained that they were combining existing techniques of finance and information technology in a new service. They were targeting community pharmacy because it had a high level of credit transactions with a secure payer (the NHS) but limited access to funding. In addition, the number of prescriptions dispensed each year was rising. The service was being aimed at independent community pharmacies, rather than multiples, to start with.
PP has been backed in its initial stages by a number of major financial institutions. Mr Douglas told The Journal that the company planned to raise further funds by the process of securitisation - securing money on the basis of its regular income stream. The payments from the PPA were a "Government-quality asset" which City institutions would be keen to invest in. The company would not be selling its data to third parties, but each pharmacy would receive reports on its NHS turnover and the payments made.