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Category M clawback money will not be sent straight to CCGs

Category M savings are normally passed straight on to CCGs
Category M savings are normally passed straight on to CCGs

The estimated £120 million being clawed back from community pharmacies will not be sent straight to clinical commissioning groups (CCGs), C+D has learned.

The Pharmaceutical Services Negotiating Committee (PSNC) announced last month that category M prices will be reduced by £15m per month for a 12-month period from August, to "correct overpayments of retained margin for both 2015-16 and 2016-17".

According to a letter sent by NHS England's chief financial officer Paul Baumann to CCGs on July 26 – and seen by C+D – the estimated £120m “windfall benefit” that will be clawed back from pharmacies would “normally accrue to CCGs through reduced medicines expenditure”.

However, Mr Baumann said that this year the money would be withheld by the NHS Business Services Authority (NHS BSA) to “create a central fund” to plug a system-wide deficit expected to accumulate across the health service in coming months.

Mr Baumann said NHS England “fully recognises” the financial challenges CCGs are facing, and added that the benefit of the clawback should still become available to them later in 2017-18 or in subsequent years.

“Pressures across the NHS”

An NHS spokesperson confirmed that given the financial pressures faced “across the NHS”, the “one-off repayment” of “higher than expected profits” made by pharmacies would be “held in reserve”.

“Since CCGs weren’t expecting this benefit, they are certainly no worse off, and in fact have...opportunity to benefit, since the intention is that funding will subsequently be available to CCGs who deliver their financial plans at the end of the year,” the spokesperson added.

PSNC told C+D yesterday (August 15) that how the clawback money is used is “a matter for NHS England to determine and comment” on.

Announcing the clawback last month, the negotiator said it will represent an average drop of around 17-18 pence per item on current drug tariff prices, although the impact on individual pharmacies “could differ” according to their “dispensing mix”.

PSNC chief executive Sue Sharpe warned at the time that the reduction would have a “severe” impact on the sector.

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