Category M to claim back £12m each month over summer
May 16 2016
The Department of Health is to claim back £48 million from community pharmacies in England over Category M prices from June to September.
PSNC has said that the Department is introducing the price reductions to “reclaim excess margin that they believe was delivered to contractors in 2015-16 above the agreed allowed £800m. PSNC accepts that margin levels were high during the period, but has not agreed to the reduction.”
In its letter informing PSNC of the decision, the Department said that it felt its data was robust enough to support at least a £12 million a month reduction, and that a further review would be considered for October onwards. This would be in consultation with PSNC when the finalised 2015-16 medicine margin survey results are available, said PSNC. However, the Department’s projections “suggest that the October Drug Tariff is unlikely to see a significant recovery.”
Health and social care minister Alistair Burt has set out the amount of money that has been clawed back since 2005 when the Category M price category was introduced into the Drug Tariff. Lincoln MP Karl McCartney had asked in April “how much the Community Pharmacy Contractual Framework has accrued to the public purse through Category M savings since 2005.”
Mr Burt’s written answer last week said the adjustments to Category M generic medicine reimbursement prices have been made “to align total community pharmacy funding (including margin earned on the difference between reimbursement prices and purchase prices) with the target amount set for the community pharmacy contractual framework.
He included a table setting out the sums as follows: