PSNC complacent over purchase profits, say Tories
Shadow health secretary Andrew Lansley has accused the Pharmaceutical Services Negotiating Committee of complacency over the large recovery of excess purchase profit that pharmacy contractors in England are now facing.
The Journal understands that the recent cut in reimbursement prices means
that some contractors are now receiving monthly payments from the NHS
that are smaller than their wholesalers’ bills.
Mr Lansley told The Journal: “It worries me that the PSNC now appears
to be utterly complacent [about] the fact that large overpayments now
have to be repaid. The Government has so mismanaged the prices of reimbursable
medicines that pharmacy is now in a boom and bust situation.”
He added that the PSNC should be able to say what the retained profit
situation was on a quarterly basis, because the contract called for it
to be assessed quarterly. If the PSNC had not been complacent, he said,
it would be able to describe what the situation had been in the past
three quarters.
PSNC head of finance Mike Dent responded: “The
PSNC is committed to making an accurate assessment of the levels of purchase
profit available
to independent contractors.
“The inquiries used to achieve this are conducted
annually jointly with the DoH. They are inherently time consuming, involving
detailed audit and analysis using sophisticated statistical techniques.
The results are then fed into subsequent negotiations.
“The PSNC recognises
the need for measurements of profit to continue to be made using the
actual purchase prices paid by independent contractors and is committed
to working with the DoH to develop the system to allow earlier adjustment
of profit levels to smooth delivery of income to contractors.”
Mr Lansley spoke to The Journal after he accused the Government last
week of mismanaging the pharmacy contract so badly that community pharmacies
were paid £811m more profit by the NHS than they were entitled
to in 2005–07.
Taking his criticism of the Government further, Mr Lansley added that
it had failed to deliver the health check opportunities available through
the new pharmacy contract.
Mr Lansley’s claim was based on figures provided to him by the
Department of Health in response to a Parliamentary question. Health
minister Dawn Primarolo’s reply did not mention the recovery process.
In a written response to Mr Lansley’s criticism of the Government,
the PSNC said: “PSNC believes that there has been a misunderstanding
of figures provided to Mr Lansley. The figure mentioned in the statement
fails to take into account the measures taken to ensure repayment by
contractors of profit beyond the levels agreed in the contractual framework.
PSNC and the Department of Health expect that total funding for this
year will be on target by the end of the financial year.”
In a letter to Mr Lansley, the PSNC said: “It is particularly regrettable
that your accusations came this month when, far from earning excess profits,
community pharmacies are suffering financially from the combined reductions
in prices and fees.”
In response, Mr Lansley issued a further statement to say that there
was no misunderstanding. “Even if there are compensatory savings
elsewhere within the global sum, the negative effect of that is that
other valuable services for the public are not being commissioned, hence
my reference … to the lack of such advanced services,” he said.
He challenged the PSNC to explain whether the margin to be achieved in
2007–08 will be £500m or whether it will be lower because
of a claw-back of previous overpayments.
“I doubt it is the latter,” he
said. “But if it were, it would imply a dramatic boom and bust
for high street pharmacy which would have severe adverse commercial consequences.
… The PSNC, on behalf of the pharmacy sector, should themselves be
publishing this profit margin data and pressing for the original purposes
of the pharmacy contract to be fulfilled.” |
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