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NPA ‘very concerned’ over deduction scheme’s impact on independents

The National Pharmacy Association (NPA) is “very concerned” about the potential impact the new discount deduction scheme could have on “many” independent pharmacies, it has told C+D.

The Pharmaceutical Services Negotiating Committee (PSNC) announced last month that a new discount deduction system will gradually be introduced from later this year as part of a series of drug reimbursement reforms agreed by the negotiator and the government.

But the NPA has seen “worrying calculations” from several of its members about the forecasted impact the new scheme might have on their businesses, its director of corporate affairs Gareth Jones told C+D earlier this week (September 13).

Read more: Not fair: Public backs calls for increased pharmacy funding as pressures intensify

“We have yet to see a detailed analysis of the likely impact of this change across the board,” Mr Jones added.

Both these elements leave the NPA “very concerned” about any potential repercussions that could follow the introduction of the new scheme, “given the already challenging financial position in the sector”.

“There will be winners and losers from this and for the contactors worst affected, this could be another significant problem,” Mr Jones added.

PSNC has defended the move to the new system, citing a predicted “levelling out” effect on the deductions paid by different pharmacies.


The new deduction groups

Rather than continuing to be based on “one set value” for all items dispensed, the new discount deduction system will see the introduction of three deduction groups:

  • Appliances, meaning products listed in Part IX of the Drug Tariff, will be deducted at 9.85%

  • Generic medicines, meaning category A and M products in Part VIIIA of the Drug tariff, will be deducted at 17.52%

  • Branded medicines will be deducted at 5%.

AIMp: “Actively investigating”


Meanwhile, the Association of Independent Multiple pharmacies (AIMp) told C+D that it is “actively investigating the effects of the discount scale restructure”.

“We will reserve our comments until the first NHS Business Services Authority payment is received under the new scheme to verify our conclusions, so we can make an informed and educated response then,” AIMp added.


PSNC: Move from “unfair” system


But PSNC's committee gave “very careful consideration” to the changes coming in with the new system, director of pharmacy funding Mike Dent told C+D.

“The changes will lead to a levelling out for all pharmacies, which the committee believes is the right thing to do – the changes will help those contractors who were being disadvantaged by the previous unfair system, while giving those losing benefits from that unfair system some time to adapt,” Mr Dent added.

Read more: New deduction scheme will not lose the average contractor money, says PSNC

He said that 70% of respondents to a public consultation on whether the discount deduction scale should be split voted in favour of the move.

Earlier this week, C+D reported that Bharat Shah – the co-founder of wholesaler Sigma Pharmaceuticals – fears that community pharmacy owners could face bigger losses during the transition period to the new discount deduction system and following its full implementation.

However, Mr Dent said it is not correct to assume that the average contractor will make a loss.

PSNC has recently developed a tool to help contractors estimate the impact the new deduction scheme is likely to have on their payments, and it is inviting them to attend a webinar about the new scheme on October 12, at 7:30pm. 

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