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DHSC bins plans to introduce multiple quotes for sourcing non-Tariff specials

Labour costs for dispensing GPs could run to £20K

November 18th 2021

Tagged: DM Zone news DDA news political news Pharmacy owners' news

By Ailsa Colquhoun

DHSC has abandoned plans to introduce a system of securing multiple quotes for sourcing non-Tariff specials, in light of the estimated labour cost to dispensing doctors of between £15,000- £20,000.

However, in an impact assessment published to support its response to the 2019 community pharmacy reimbursement consultation, the DHSC notes that any margin adjustments made (in particular via the Category M Drug Tariff) to maintain pharmacy contractor margin at £800m per annum will affect dispensing doctors. This could also introduce additional cashflow implications for the sector, admits the DHSC.

The Government’s response to the 2019 primary care reimbursement consultation pledges to take forward changes to reimbursement in the following areas:

  • Reimbursement prices of medicines in Category C which are prescribed generically but have multiple suppliers
  • Inclusion of drugs (other than licensed and unlicensed medicines) with a reimbursement price in Part VIII
  • Reimbursement prices for non-part VIIIA products
  • Reimbursing and procuring unlicensed medicines (‘specials’)
  • Reimbursement of generically prescribed appliances and drugs dispensed as ‘specials’.

Next-stage discussions with pharmacy representatives will acknowledge the general principles championed by the DDA that dispensers should not dispense at a loss and that branded generic prescribing does not generate long-term financial benefits for the NHS. One proposal to be specifically discussed with pharmacies is to develop two discount deduction scales reflecting different levels of discount for branded and generic medicines. This proposal does not affect dispensing GPs, which operate their own discount scale.

However, implementation of generic substitution by pharmacies will not be progressed.

The DHSC’s response outlines the perceived problems with the current arrangements, namely that manufacturers’ and wholesalers’ price lists do not reflect actual selling prices to pharmacy contractors by the manufacturers and wholesalers.

It also notes that any change to the reimbursement arrangements for dispensing doctors would need to be separately addressed through negotiations on the GMS SFE.

Read the DDA’s response to the reimbursement consultation, made in 2019.