The price rise is “to correct a predicted shortfall in the margin delivery rate for the current financial year”, the Pharmaceutical Services Negotiating Committee (PSNC) announced this afternoon (July 15).

At the same time, the 1p rise in the single activity fee will “ensure delivery of the correct amount of funding to contractors this year”, it added.

For the past year, the margin delivery rate has had to be set lower than £800m as the Department of Health and Social Care (DH) sought to recover sums owing from over-delivery of margin in previous years, PSNC explained.

While category M prices were increased by £10m a month in April, “contractors have not seen the positive cashflow impact that would have been expected”, it said.

PSNC suggested this was “driven by movement in the drug mix in April”.

Financial relief for contractors

Commenting on the price increases, PSNC chief executive Simon Dukes said: “The past few months have been incredibly difficult for many community pharmacy contractors.

“These August price increases are being made to try to correct margin delivery for this financial year and this should bring some relief for contractors.”

PSNC will continue to press for “improvements to the funding and margin distribution systems to try to avoid this sort of scenario in the future”.

With negotiations for a funding contract ongoing, PSNC “felt that an immediate increase in category M reimbursement prices was the best course of action to ensure that contractors receive all the funding to which they are entitled this year”, Mr Dukes added.