Adjustments are being made to Category M prices from August, despite clear opposition from Community Pharmacy England.
The Department of Health and Social Care made an error in the calculation of July 2024 Category M prices and informed Community Pharmacy England that they intend to make reductions in the August Drug Tariff. Community Pharmacy England have been very clear that downward adjustments are unaffordable and will further put the viability of the sector at risk. This decision has been imposed (forced through) despite Community Pharmacy England’s serious risk warnings and strong opposition. We have written to the Minister to make this clear.
Based on erroneous calculations, in July DHSC implemented an increase in Category M reimbursement of approximately +£21m per quarter.
Based on corrected calculations, DHSC have stated that the change in Category M reimbursement should have been a reduction of -£6m per quarter.
Therefore, the erroneous increase in July would result in £27m overall extra reimbursement over the July quarter (i.e. circa £9m per month).
NB. These amounts relate to systematic changes due to underlying movements in medicine buying prices in the market, they are not changes related to margin adjustments or the margin survey of Independent community pharmacies.
DHSC consulted with Community Pharmacy England about how to address this error, and our firm position was that DHSC should not seek to enact any mid-quarter correction in Category M prices. The impacts of the July reimbursement increase would be picked up and accounted for by the Margin Survey in due course.
DHSC have now informed Community Pharmacy England that they will enact price adjustments in Category M prices from August, with the aim of reducing reimbursement by circa £9m per month. Additionally, the extra reimbursement delivered in July will be taken back via further Drug Tariff price reductions between October 2024 to March 2025.
Community Pharmacy England CEO Janet Morrison said:
“Upon being informed of DHSC’s plans to further reduce Category M prices from August, we have reiterated our firm stance that this is not an acceptable resolution to the situation. The margin system is not working as it needs to, and we have been calling for a review of medicines margin.
Community pharmacy businesses are in a perilous and critical state due to the entrenched underfunding of the Contractual Framework. Community Pharmacy England’s firm position remains that the margin element of the CPCF, along with the overall funding quantum, needs urgent uplift as it is insufficient to reflect the ever increasing volume of dispensing and services provided by the sector. Any more reductions to funding are likely to exacerbate the stream of pharmacy closures we are seeing across the country, and put patient access to pharmaceutical services at risk.”
The post Category M Adjustments to occur in August 2024 – imposed by DHSC with Community Pharmacy England’s opposition appeared first on Community Pharmacy England.