Contract funding up to £1.911bn
Funding for the community pharmacy contract in England and Wales will increase by 5 per cent for 2006–07, compared with 2005–06, the Pharmaceutical Services Negotiating Committee has announced.
Together with £56m being carried forward from underspends in the
global sum, practice payments and electronic transmission of prescriptions,
the increase will bring the total global sum for the year to £1.911bn.
The extra funds will be distributed via an increase in fees and allowances
from October until the end of March 2007, the PSNC said. With adjustments
for purchase profit income, the effect on most pharmacies will be an
increase in fees and allowances of around 10.4 per cent.
An additional £300m a year (£75m a quarter) will be removed
through adjustments to prices of products in Category M of the Drug Tariff.
This adjustment is based on invoice assessments conducted in October
2005 and February 2006, which the PSNC believes to be flawed. “The
PSNC is unhappy at the decision to make the changes on the basis of the
information available, and is particularly concerned to be sure that
reimbursement prices ensure that independent pharmacies, including singly
owned pharmacies, can earn profits at a level that delivers a fair return.
It is continuing to make representations to the Department of Health,” chief
executive Sue Sharpe said.
The fee for advanced services, namely medicines use reviews and prescription
interventions, will increase from £23 to £25 from October
onwards, and the ceiling on the number of MURs has also been increased
to 400. This new ceiling will be available to pharmacies which have made
arrangements to provide advanced services before 1 October. The limit
for pharmacies which enter arrangements on or after 1 October will be
200, up to the end of March.
The prescription volume threshold for establishment and practice payments
has also been increased, by 3 per cent, to 2,060. This is, the PSNC is
keen to point out, somewhat below the 5 per cent average volume increase.
Prices of products in category M from 1 October can be found on the PSNC
website. Final details of how the additional funding
will be distributed will be available later in the month.
A contractor’s view
The increase in the global sum should be cautiously
welcomed, Tony Schofield, an independent contractor with a single
pharmacy
in South Shields, commented. “A 5 per cent above inflationary
increase is, on paper, good news. It recognises the increased volume
of work we now have. However, we will have to see how it works
out. In principle, I have faith in the PSNC and if it says we are
being paid more that is a good thing. Unfortunately, with averaging
arrangements there are winners and losers. My gross profit for
2005–06 dropped by 2 per cent, which hasn’t thrilled
me, but there will have been winners who are delighted.”
The increase in fees is also welcome, he added, but it will be
needed to overcome the reduction to the prices of category M products. “The
cut in category M prices will certainly improve the position of
many primary care trusts’ drug budgets. It will be interesting
to see if the industry can maintain prices so low while still leaving
purchasing profit in for us,” he said. “I suspect there
will be a couple of casualties and when the number of suppliers
reduces there will be upward pressure in prices, further squeezing
our income.” |
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