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Understanding the Drug Tariff preface

What does it tell you, and what should you do about it?

October 8th 2020

Tagged: Dispensary guidance news

By Greg Bull, dispensing doctor consultant

In England and Wales, the Drug Tariff preface summarises the latest additions to that month’s Tariff, and gives information on expected changes to the coming month’s Tariff.

Examples of the information included in the Tariff preface:

Under ‘other’ changes (Section 5.7): Drugs for which discount is not deducted

This is a list of items that will not offer discount, and for pharmacies (which share the Tariff) items on this list are excluded from any ‘clawback’ deduction . Unfortunately, dispensing practice are not eligible to receive this concession, and the dispensing doctor clawback still applies to these items, usually at the highest rate of 11.18 per cent.

There are about 100 lines listed in this section in the October Drug Tariff.

It is worth keeping an eye on these items as they are unlikely to attract any discount from your wholesaler, and so you will dispense at a loss.

Drug Tariff Changes

The preface highlights drug tariff category changes, and this is important information for dispensaries as it will affect your endorsing and your buying. In October this reads:

Drug namePack SizeDrug Tariff priceDrug Tariff CategoryOther information
Bimatoprost 100mcg/ml eye drops3ml1339A
Bimatoprost 100mcg/ml eye drops3ml1010M
Cefadroxil 500mg capsules20645A
Cefadroxil 500mg capsules202238CSandoz Ltd
Nizatidine 150mg capsules30502M
Nizatidine 150mg capsules30753A
Tamsulosin 400mcg/Dutasteride 500mcg capsules301980CCombodart
Tamsulosin 400mcg/Dutasteride 500mcg capsules301006M

Questions to consider

  • What has happened to the reimbursement price of cefadroxil capsules 500mg x 20?
  • How does the change to the reimbursement price of nizatidine capsules 150mg x 30 affect your dispensary?
  • What impact will the reduction in the price of Tamsulosin 400microgram / Dutasteride 500microgram capsules have on the margin on the stock you hold on shelf?

Move from Category A to Category M.

Following the move from Category A to M, from October 1, Bimatoprost 100micrograms/ml eye drops 3ml will be reimbursed at the Drug tariff price [for October 2020] of £10.10 regardless of which brand has been dispensed or the purchase price of the item. Endorsing the prescription to claim reimbursement for the brand you dispense is the only way to avoid losses caused by reimbursement at the new Category M generic price.

A Category M line tends to have its reimbursement price adjusted each quarter, based on the purchase margins reported by community pharmacies. Changes in Category M prices can be significant, and are detailed by the DDA usually two weeks in advance of the price change. DDA members are encouraged to view the library of Category M adjustments  to see the detail of the adjustments, history and analysis.

Price rises/changes

Price changes are marked in the body of the Tariff with a PPA Symbol K or PPA Symbol L. It is well worth keeping an eye on your common expensive items to check the extent of any change (particularly, reduction)  in reimbursement, as this will affect profitability.

The October 2020 Drug Tariff for England and Wales is online, published by NHS BSA.