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Prescription pricing complexity

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By Ranveer Bassey
10 Feb 2013

Give three pharmacists a calculator, the drug tariff and a prescription.  Ask them how much they will be paid for dispensing the prescription.  I bet you'll get three different answers.

That's no reflection of the incompetence of pharmacists.  We're meant to be quite good with numbers given that, in our profession, lives can depend on them.  Instead, it's a reflection of the complexity of prescription pricing.

NHS Business Services (NHSBS) must employ wizards to price prescriptions.  Only the tap of a wand can possibly reveal how much a prescription is worth.  But it appears not, as NHSBS don't seem to know how much prescriptions are worth either.

Is it any wonder?  Consider what makes up a payment (take a deep breath): there is a professional fee, potentially one of 11 additional fees, a practice payment which includes a payment for complying with the Equality Act, a consumables & container allowance and the basic price of the medicine prescribed less a deduction based on the total value of medicines dispensed in a given month, unless the medicine is considered non-deductible.  You might also make an out of pocket or broken bulk claim.

Category M adds further complexity.  Community pharmacy is guaranteed £500m in purchase profit (money made from buying a medicine for less than is reimbursed).  It's delivered through quarterly changes in the reimbursement prices of generic drugs.   It's mostly seen as "clawbacks" following excessive purchase profit being earned.

The process requires forecasting of expected medicine spend and, later, an assessment of actual spend.  Cat M makes it difficult for contractors to budget and can cause cash flow worries.  The share a pharmacy will receive from the purchase profit pot depends on the mix of drugs they dispense.

It all seems unnecessarily complicated.  Why not allocate the purchase profit proportional to the number of items dispensed?  It's also worth noting that the profit figure was agreed in 2005 and has not changed.  It would need to have increased by around £120m to have kept its value today.

Generally, complexity is used to hide things.  It's why government talks of ‘realignment of service provision to meet future fiscal constraint', rather than ‘cost-cutting'.  I'm unsure whether the complexity of prescription pricing benefits pharmacy or the government.  I suspect it's the latter.

Either way, a simplified and more transparent funding arrangement should be the aim.  Let's hope the new pharmacy contract delivers that.