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'5 ways PSNC must overhaul dispensing payments in the new contract'

"Category M payments have to go"

Negotiations for the next pharmacy contract should eliminate category M payments, among others, says contractor Hitesh Patel

It was good to see the letter sent to C+D by the pharmacy minister, Seema Kennedy, last week. We all broadly welcome the commitment to an expanded role for community pharmacists in the contract that is being negotiated by Pharmaceutical Services Negotiating Committee (PSNC) chief executive Simon Dukes and his team. But I think the bulk of our income may still come from the dispensing contract.

I would like to gently remind Mr Dukes and his team that there are several bugbears in the current contract, which was negotiated almost 15 years ago. We would not want to repeat the same mistakes in the next one.

Money for MDS

The monitored dosage system (MDS) really needs to be addressed in the new contract. The Equality Act – which is used to decide who should receive MDS packaging – is open to interpretation. The universal fee for providing MDS under the Act was inadequate and has disappeared under the single activity fee.

Patients and carers are constantly clamouring for MDS provision while clinicians and academics pour cold water over its use, with community pharmacists left holding the bag. We need to see proper guidance and a robust payment mechanism for MDS in the new contract.

Fair reimbursement for generics

This is a classic case of robbing Peter to pay Paul. Contractors dispensing large volumes of branded generics are left out of pocket, compared to those who do not. Firstly, they are invariably dispensing at a loss.

Secondly, they are assured by PSNC that the loss of income from buying branded generics will be reimbursed through price concessions, but that reimbursement is based on national estimations, not an individual’s actual costs.

The ideal situation would be to reimburse every branded generic with the drug tariff price, or allow pharmacists to switch generics on prescriptions.

Rethink branded discounts

The case for 'averaging' and 'swings and roundabouts' for the losses that contractors are making on almost all branded products does not hold water anymore. It was fine when we had cheap generics balancing the losses, but that is no longer the case. Direct-to-pharmacy schemes have decimated any discounts that contractors were getting.

There is a strong case for a much-reduced discount clawback for branded products or stopping discounts altogether. I definitely want to see something in the new contract about this.

Limit treatment periods

The number of days of treatment a prescription is for should be limited to a maximum of 56 or 28 days, as most clinical commissioning groups recommend. Some GPs have started issuing 84-day treatment periods to reduce their workload, but this leads to more wastage.

GPs have no excuse of resource constraints, as the electronic repeat prescription service is fully functional.

Category M must go

Category M payments were most likely thought up by an economist to create a non-transparent and inequitable system to befuddle contractors. They have to go. Any overpayments or underpayments should be adjusted with the discount clawback, as happens in Scotland.

We do want see community pharmacy being an integral part of the NHS long-term plan, but the dispensing contract needs to be fixed first.

Hitesh Patel is a contractor in London


Brian Plainer, Locum pharmacist

Agree with all of Hitesh's proposals but I would suggest going even further , that being to to re-introduce between 5-10% on-cost applied to basic cost of all medicines and appliances to rapidly restore contractor cash-flow.  This ought to be a must if the DoH insist on retaining discount clawback . I'm staggered it hasn't been re-adopted over the past decades of decreased discounts to contractors - ever since GSK first introduced their notoriously disadvantageous agency scheme.

Divyakant Mazny, Community pharmacist

Agree with evrything Hitesh mentioned above.

Community pharmacy can not be an integral part of the NHS long-term plan, unless dispensing contract is fixed first.

Funding cuts causing staffing issues due to which “Capacity for doing extra services is not great"

Leon The Apothecary, Student

Treatment periods should effectively be done through eRD. From my experience there's low uptake in a lot of areas, and this might be a training or staff availablity issue. It's a good job for a prescriptionist role.

Leon The Apothecary, Student

100% agree with MDS. It is a very timely endeavour and puts a lot of pressure onto the workloads. I recall one carehome that received MDS packages from a pharmacy. It was calculated profits could be increased by not serving them at all. It was better to not dispense!

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