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'Cynical' £10m cat M increase amounts to just £870 extra a month

Umesh Modi: The funding policy needs to be reversed, and sooner the better
Umesh Modi: The funding policy needs to be reversed, and sooner the better

The £10 million monthly increase in category M prices is a “cynical ploy” amounting to just £870 extra a month for contractors in England, a pharmacy accountant has said.

Funding for England’s pharmacies will remain at its current level of £2.592 billion from April, but category M prices "will increase by £10 million per month, as reductions to recover excess margin...come to an end", the Pharmaceutical Services Negotiating Committee announced on Friday (March 8).

However, chartered accountant Umesh Modi said the £10m is not an increase, as this is the amount contractors have been paying in the form of a category M clawback over the past five months.

“Therefore, in real terms, there is no increase over a period of 12 months to October – assuming the negotiations on new funding arrangements conclude [then],” Mr Modi told C+D this morning (March 11).

“This is just a cynical ploy to make contractors feel good, as all that has happened is that the government is giving back what it has taken.”

He estimates that on average, every contractor in England will receive £870 extra per month from April.

Contractors and patients suffering

It is also a concern that the overall funding for pharmacies in England has continued at its reduced level, he added.

“This is still £208m less than original funding at £2.8bn and has caused many contractors a real hardship. Some have closed, others are looking to sell and many continue to reduce staff and investment in [their] business,” Mr Modi said.

It is also “disappointing” that no further Quality Payments Scheme requirements have been set as part of the latest funding announcement, as these payments are a “valuable source of income to contractors”, he added.

“We are seeing many clients suffer severe cashflow problems and [they are] barely managing to stay afloat,” Mr Modi stressed.

Patients are suffering as a result, he claimed, as they “do not receive the level of services they rightly deserve”.

“The funding policy needs to be reversed, and sooner the better.”

How is your pharmacy coping with the funding pressures?

Sue Per, Locum pharmacist

More nonsensical rhetoric from Mr Modi. The 10M was clawed back because the contractors were not entitled to the relevant purchase profits, as determined in the High Court. The government has written off a lot, and spared the contrators from further claw back.

The closures Mr Modi, refers to, which incidentally amounts to less than 1% of the community pharmacy networks, pales into insignificance, compared to the thousands of other business that have closed simply because of the tough retailing conditions in the High Street.

The contractors need to be thankful to the HM Paymaster for keeping them afloat in buiness, and also rescinding from a much deeper claw back they had planned!!

Unlike the contractors who have enjoyed near 33% increase in payment in the past decade, the locums and employees have by contrast suffered a drop in income in excess of 33% in real terms!!. The latter is because the greedy contractors have taken advantage of contract limitation and depressed the fee payable to the Locums and Employee Pharmacists, and retained remainder as profits.

Given that the contractors are not prepared to pay a fair proportion of the NHS income to their pharmacist fee earner, but retain a large chunk of the profit for themselves, the only option for the HM paymaster is to reduce the payments to the contractors even further!!, until the contractors start selling off, closing, or start sharing their income with their fee earners!!



Rishi Adatia, Community pharmacist

And yet he is still trying to sell pharmacies at pound to pound in turnover or more.........

RS Pharmacist, Primary care pharmacist

I am not a contractor, but I would think any increase is better than a decrease. Also average of £870 per month or £10,440 over 12 months… is the glass half empty or empty?

Sue Per, Locum pharmacist

The maths indicates 12 months equates to £10,440.00,

A decent chunky amount.


C A, Community pharmacist

Enough to pay for a part timer and take the pressure off slightly...

N O, Pharmaceutical Adviser

No........ They are not giving any extra money. They have simply stopped deducting £10million as excess margin. Please why don't people understand that this is not even Straight away £ 870 to each pharmacy !! The £10million clawback from the cat M has just stopped, which means based on the product mix you have you will now earn more compared to months from Nov-18 to March-19. If the products for which the cat-M price will go up but is not a fast moving line for a certain pharmacy, then they will not get a penny more. As I pointed out earlier, this will only benefit the vertically integrated companies and not the small independents. Got it???

Tony Schofield, Community pharmacist

The gentleman is absolutely correct that this isn’t an increase it’s merely that the clawback will have been collected in full. £870 a month is a significant amount if you have to find it to pay out so it’s a significant amount to save. However this article demonstrates a lack of understanding of the state of negotiations. The quality payments and MURs are part of the global sum and, barring a reduction in that sum the money will be paid out in different ways in October. Personally, I think a more clinical services driven contract should be the aim of all pharmacists and it will perplex non pharmacist managers

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