Contractors to be hit by significant drop in income
David Bukach/Dreamstime.com
Money from purchase profits will be recovered from this month |
Pharmacy contractors will be hit by significant and unexpected reductions in income over the next few months following the latest quarterly revision of reimbursement prices for generic medicines.
Substantial
reductions to Category M reimbursement prices in the October
2007 Drug Tariff were revealed by the Pharmaceutical Services Negotiating
Committee last week.
According to analysis by the Department of Health, contractors’ purchase
profits have “greatly exceeded the target levels” allowed
in the new community pharmacy contract. The DoH has, therefore, decided
to adjust Category M prices with the aim of removing £400m from
current margins for the financial year.
The PSNC is extremely concerned about the results of the DoH analysis
and has said that it will not accept the provisional adjustments to Category
M prices until its own analysis of the level of purchase profits made
by contractors is complete. The PSNC expects to have finished negotiations
with the DoH well in advance of decisions on the next quarterly changes
to Category M prices in January 2008.
Mike Dent, head of finance at the PSNC, told The
Journal: “Negotiations
on funding are ongoing. They are difficult and complex and of the utmost
importance. It is clear that buying profits secured by contractors are
in excess of amounts allowed under the contractual framework so some
adjustment to buying profit levels is undoubtedly necessary.”
He
explained that it is preferable for this to take place as early as possible
since the longer margins are out of line, the bigger the correction needed
in the future.
The revised Category M prices also apply in Scotland. Community Pharmacy
Scotland said that it is surprised by the reductions and is discussing
the results of spot checks on contractors’ purchase profits with
officials from the Scottish Government.
The PSNC also announced the 2007–08 changes to fees and allowances
for contractors in England and Wales. These will be applied from October
2007.
Practice payments have been reduced to compensate for overpayments made
in the first half of the financial year and will fall by 10.4 pence per
item. This compares with an increase of 5.9 pence per item last year.
The global sum has increased by 4.3 per cent to £1.94bn, which
includes extra funding to cover the costs of the increasing regulatory
burden on community pharmacists. “At a time when pay settlements
in the NHS have been tightly capped this level of increase, adjusting
for increased business costs, is good,” said the PSNC.
Global sum payments, including item fees and establishment payments,
will continue to be paid at the current rates. The prescription volume
threshold for establishment and practice payments has risen by 3 per
cent to 2,120.
Payment for medicines use reviews and prescription interventions has
increased from £25 to £27 — the ceiling on the number
of MURs each pharmacy can carry out remains at 400 per year. |
The
Pharmaceutical Journal
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