The Pharmaceutical Journal
Vol 273 No 7325 p703
13 November 2004

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PPRS will cut pharmacy profits as well as save money for the NHS

Community pharmacies will suffer reduced profits when the renegotiated Pharmaceutical Price Regulation Scheme takes effect at the start of next year, the managing director of AAH Pharmaceuticals has warned.

Steve Dunn said: “On top of the radical revision of generics remuneration this is just another way of stripping cash out of pharmacy and pharmaceutical wholesaling.”

Mr Dunn explained that pharmacies will lose out under the PPRS because the discount they get on wholesale purchases will be worth less when drug prices fall by 7 per cent.
“All this [is] at a time when pharmacists are being asked to sign up to a new contract which is demanding more work for the same money and when pharmacists and pharmaceutical wholesalers are being asked to make considerable further investment to comply with the latest thrust of the NHS contract. The real shame of it is that the key stakeholders of wholesalers and pharmacists will suffer collateral damage but were not part of the negotiation.”

Mr Dunn estimates that the combined effect of the PPRS and generics changes could reduce average pharmacy profits by £4,000.

So far as hospital pharmacy is concerned the impact is less clear cut because there is no guarantee that manufacturers covered by the PPRS will maintain the same levels of discount when they are forced to reduce their list prices.

Allan Karr, chairman of the Guild of Healthcare Pharmacists procurement and distribution interest group, said: “There might be a small impact. Perhaps for those brands where, up to now, there has been little or no discounting. But, at the moment, it is too early to tell what discounts hospitals will obtain.”