Sector bodies have objected to changes to the drug tariff which the government hopes will “improve medicine margin arrangements”.
The Department of Health (DH) sent an advance notice last month (December 22) on the new category H being introduced to part VIIIA of the drug tariff in March, as set out in the 2025/26 funding settlement.
Originally proposed by the DH in a 2019 consultation on drug reimbursement reforms, the introduction will involve changes to reimbursement price-setting arrangements for products in category C where there are multiple source products.
The DH said the current product reimbursement price listed in category C is “based on a specific product – often because it is the only brand available”.
Products with more than one supplier will be moved into category H in a “phased approach”, with the price set using information from suppliers.
Surprise
But Community Pharmacy England (CPE) has “objected” to introducing the new category “at this time” because it believes there is a “risk that further changes could disrupt the already turbulent medicines supply chain”.
In a statement posted on its website, CPE said it had “ongoing and very serious concerns about the functioning of the medicines pricing and margin system” and the “impact this is having on the network, as pharmacies continue to struggle to operate with severe underfunding”.
Read more: Government to ‘review’ margin system and faster Cat M process
“We are continuing to press government on this matter,” it said.
Independent Pharmacies Association (IPA) chief Dr Leyla Hannbeck said the “surprising announcement” at “this point in time is deeply concerning and it will have a further impact on community pharmacies’ cashflow and margin”.
She said the IPA has asked for further clarifications on the new category as there are “still a lot of uncertainties” on whether it will “attract a specific clawback”.
Unfit system
National Pharmacy Association (NPA) chief executive Henry Gregg said introducing category H is “more evidence” that the pharmacy contract is “fundamentally broken” and adds “further layers of complication to an already unfair system that is not fit for purpose”.
He added: “Tinkering will not improve a system so opaque and complex than pharmacies have little idea from month to month what funding they will receive.
Read more: Funding breakdown: Write-offs, service payments and activity fees
“The government must urgently commit to reforming this contract, as they have already done with GPs and dentists, or risk undermining their own ambition to move care into communities.”
Evergreen Pharmacy director Rifat Asghar-Hussain said she is “baffled” a new category is being proposed when the “current system needs a complete overhaul”.
Read more: ‘Impossible to absorb’: Cat M to slash pharmacy cash by £34m
“We have a fixed margin, despite continuous growth of prescriptions which we do not control. It’s like shifting deck chairs around on a sinking ship,” she said.
Asghar-Hussain added that it follows a pattern with previous governments of a “total disregard for community pharmacy and its survival”.
Read more: Kinnock: Pharmacy reimbursement ‘does not aim’ to repay ‘as much’ as drugs cost
“The timing of the new category is very close to the new contract. Is this setting a precedent as to what is coming?” said Asghar-Hussain.
It comes as the NPA last week (January 2) slammed the NHS’s “bombshell” move to claw back £158m from community pharmacy owners over the next 12 months.
