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Don Lavoie is alcohol programme manager at Public Health England and Gul Root is lead pharmacist, Health and Wellbeing Directorate, Public Health England
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PSNC logo high resOctober 26 2017

Community pharmacy contractors will receive an increase in their November 1 advance payments of 15p per prescription item, PSNC has announced.

The increase will be for one month only, and has been agreed with the Department of Health “in recognition of the extraordinary cashflow challenges” that pharmacy contractors have seen in recent months. These include:

  • reductions in pharmacy remuneration, as imposed by the Government from December 2016;
  • reductions in reimbursement prices from August 2017, to correct for previous over-delivery of margin; and
  • a sharp rise in generic purchase prices in recent months.

“The increase has been confirmed for one month only, and full and final payment for services provided in September will be reconciled as usual at the end of November,” said PSNC. “This means that contractors will not receive any additional funding overall, but the impact of the reduction expected to be seen in the November 1 payment, following Drug Tariff price reductions put in place from August, will be smoothed out.”

The payment has been calculated to reflect the effect of reductions in Category M prices in August: “At the beginning of October, a pharmacy would have received an advance payment for the dispensing month of August,” said PSNC. “This was an estimated payment, taking into account the pharmacy’s number of declared items for August, and the pharmacy’s average item value (AIV) from the dispensing month of July.

“Because of the reductions in Category M prices in that month, the advance for August is likely to have overstated the value of August’s prescriptions. Subsequently in the November 1 payment, the pharmacy will receive the balancing payment for August, and the advance payment will be recovered. This means that the November 1 payment is the point at which the impact on contractors will be most significant as the balance for August will be lower than the recovery of the advance.

“As well as the November 1 balancing payment, contractors will receive an advance payment at the same time for declared items for September. By increasing the value of this payment by 15p per item, the impact of the expected drop in payment is smoothed out.”

Links:
PSNC statement                
Today’s Pharmacist coverage of SAF increase       

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