The Department of Health has announced the new Category M prices which will apply to prescriptions from April until June 2014. The April 2014 prices can be viewed on the NHS Prescription Services website.

PSNC and the Department of Health (DH) assess the medicine margin achieved by pharmacy contractors and make adjustments, as necessary. DH and PSNC have agreed a reduction to generic medicine reimbursement prices (Category M) from April 2014 of £10 million per month, equivalent to £120 million in a full year. The Drug Tariff will be amended from April 2014, to reflect this change. The delivery of medicine margin will continue to be assessed, with further adjustments made, as necessary.

PSNC’s Head of Finance Mike Dent commented: ‘Whilst we have agreed this adjustment for April, it will be kept under review as further data becomes available on levels of margin being earned.  Our ambition is to move to a system that offers greater consistency of margin delivery for contractors, avoiding the large cuts in reimbursement prices seen in October for many years, and we are working with DH to revise the systems for adjusting Category M prices.’

Adjustments are being made to Category M generic reimbursement prices from October informed by the assessment of medicine margin in 2012/13. The adjustments will reduce medicine margin by £40 million (ie £20 million per quarter) for the period October 2013 to March 2014. This is 8.3 pence per item.

This adjustment has been agreed between the Department of Health (DH), which remains responsible for determining drug reimbursement prices, and PSNC.

An October adjustment is in keeping with usual practices and this adjustment is being made at this stage with the aim of maintaining smooth funding flows and avoiding significant corrections for pharmacy contractors and the NHS.

The level of adjustment being made is considered prudent, especially in the context of on-going funding negotiations for 2013/14.    PSNC, DH and NHS England remain fully committed to those on-going negotiations and good progress is being made.

PSNC have said that It is important to reach the right agreement, even if this takes some time.

October 2013 Category M price listsThe Department of Health has announced the new Category M prices which will apply to prescriptions from October until December 2013. To view the October 2013 price list please visit the Category M section of the PSNC  website.