Pharmacy leaders have called for an urgent overhaul of the NCSO (no cheaper stock obtainable) system after PSNC found that a quarter of claims are going unpaid.

Contractors were losing hundreds or even thousands of pounds a month because of a system that was not fit for purpose, pharmacy representatives said in response to a year-long analysis published by PSNC last week (May 21).

PSNC said the study had already prompted urgent discussions with the Department of Health. However, one financial expert pointed out that many losses were "due simply to careless mistakes" by contractors not endorsing properly. This reflected PSNC's findings that seven in 10 unsuccessful claims were because pharmacies missed out details such as initials, date, pack size, supplier, manufacturer or brand name.

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	The remaining claim failures were down to errors at the NHS pricing authority, which declined to comment until it had seen the findings in detail.

The Independent Pharmacy Federation (IPF) said some contractors had lost more than £5,000 in a single pharmacy in one month because of NCSO. "The system is absolutely not fit for purpose," said IPF chairman Fin McCaul.

Gateshead and South Tyneside LPC chair David Carter said the system needed to change "without a doubt". "In my LPC, I'm aware of many contractors who have lost large sums of money under the scheme, as either the NCSO wasn't agreed or the concessionary rate was too low," Mr Carter told C+D. "The people pricing your prescriptions are not very forgiving."

NPA chief executive Mike Holden said the system had led to "financial loss and additional administrative burden", although the organisation could not quantify this.

Numark head of information services Gary Choo reported that his team spent up to a quarter of its time dealing with queries about medicines supply and most of these calls were about remuneration. He said the team was "frustrated" at being unable to help contractors source stocks at an acceptable price and said the dispensing process had clearly become more burdensome over the past two years.

Pharmacy accountant Umesh Modi said he suspected contractors were losing "hundreds of pounds each month" because of endorsing errors and said it was "imperative" that contractors checked their claims.

PSNC said contractor endorsing had improved between 2011 – when just 16 per cent of claims were successful – and the latest study of 333 pharmacies between November 2011 and November 2012, which showed a success rate of 76 per cent.

PSNC stressed that supply issues had "significantly" increased the volume of NCSO items, and that claims were only put in for 40 per cent of the 3,233 eligible items in the 2011-12 analysis.

It was impossible to know the total amount contractors had lost, the negotiator told C+D, and any new system would have to be fair to contractors, with the timing of shortage announcements vital.

The NHS Business Services Authority said it could not comment on its ability to reduce its own error rates until it had seen the PSNC findings in detail. "We would, however, welcome an opportunity to meet with PSNC to gain a better understanding of its study and its findings," a spokesperson said.

NCSO concessions have been agreed for two items on May prescriptions in England and Wales, the Department of Health announced today (May 30). Cyclophosphamide 50mg tablets will have a concessionary price of £59 and trazodone 50mg/5ml oral solution S/F will be £31.91.

*Source: PSNC study on NCSO claims, November 2011-November 2012

A total of 3,233 items were examined from 333 different pharmacies.

Read C+D's guide to NCSO endorsing.

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