The Department of Health and Social Care (DH) will impose a downwards adjustment worth around £9 million per month to Category M (Cat M) prices from August, Community Pharmacy England (CPE) revealed today (July 29).

CPE said that "downward adjustments are unaffordable and will further put the viability of the sector at risk" as it voiced its “clear opposition” to the measure.

According to the negotiator, the DH "made an error in the calculation of July 2024 Category M prices" and increased Cat M reimbursement by around £21m per quarter.

Read more: ‘Unacceptable’ lack of April concessions ‘likely’ due to DH changes

Instead, Cat M reimbursement should have decreased by £6m per quarter, it added.

CPE said that the DH will now reduce Cat M reimbursement "by circa £9m per month" from August to correct this mistaken adjustment, which uncorrected would result in £27m overall extra reimbursement over the July quarter as a whole.

It added that the “extra” reimbursement that the sector received in July "will be taken back via further Drug Tariff price reductions between October 2024 and March 2025".

Read more: £5m retained margin uplift ‘approved’ in Northern Ireland

CPE chief executive Janet Morrison said that the imposition is "not an acceptable resolution to the situation".

Morrison added that the margin “needs urgent uplift” adding that it is “not working as it needs to”.

The DH clarified that the Cat M tariff prices mistake was due to an analytical processing error and that prices for August and September have already been adjusted to their proper level.

 

End the clawback cycle

 

Company Chemists' Association (CCA) chief executive Malcolm Harrison told C+D that “further clawbacks will only serve to place additional strain on pharmacies’ cashflow”.

Harrison said that the retained margin system must be reviewed to end “the cycle of adjustments and clawbacks”.

He added that despite “a decade of increases to both the volume and cost of prescribed medicines”, the retained margin has not seen an increase since 2014.

Read more: ‘Sustainable footing’: Pharmacy First funding writes off £112m clawback

And National Pharmacy Association (NPA) chair Nick Kaye said that it is “outrageous that pharmacy finances can be tossed about in this careless way by the DH”.

“When financial margins are already very tight, a clawback of this amount could worsen cashflow problems for independent pharmacies and risks further cutbacks and closures,” he added.

Kaye urged the government to “urgently address” the sector’s “overall funding crisis” and “reform this up-down payment system that toys with the finances of a critical healthcare service”.

Read more: Pharmacy clawbacks are a perverse windfall tax

“This infuriating announcement goes to show why the NPA has already called a second day of protests, in September, calling for fair funding,” he said.

The NPA revealed to C+D earlier this month that pharmacies across the UK are set to sound an alarm or ring a bell in a coordinated protest action on September 19.

 

CPE 'no longer fit for purpose'

 

With the adjustment coming on the same day that the British Medical Association (BMA) secured a pay rise for junior doctors of over 20%, a spokesperson for the Independent Pharmacies Association (IPA) told C+D that the adjustment showed that officials are “out of touch”.

Read more: BMA asks pharmacists to ‘show support’ for GP protest action

They said that the sector is struggling under a “non-inflationary and highly damaging deal” that expired months ago “with no adjustment payments yet for the inflation that still ravages it”, reiterating that CPE is “no longer fit for purpose”.

“We have only been paid a fraction of the promised Pharmacy First money,” the IPA spokesperson added, owing to CPE agreeing to an “ill-considered” deal with “increasingly unattainable” terms.