Concessions – the next frontier for the clawback mechanism

By Dispex

Prior to April 2024, the DHSC clawed back any profit that pharmacy was making over and above the
allowed profit. The profit is assessed on the purchase prices paid by randomly selected pharmacies
each month. Any over
or under performance on profit was adjusted using the Category M prices,
which was why each quarter, we
saw changes in prices, more often with a net decrease in Category
M prices over the whole bundle of Category
M products. This in turn led to many items being
reimbursed at a lower price than the acquisition costs
and subsequently Community Pharmacy
England (CPE) lobbied the DHSC to offer concession price increases to cover most of those losses.

The concession prices had a positive effect on dispensing doctors as the reimbursement price
increased, but as all reimbursement has clawback (11.18%) taken off, there are still many items
dispensed at a loss. Pharmacy benefitted form concession prices
by also having all of them

It looks as if the DHSC has squeezed out as much as they can from Category M and have slipped
8 BASIC PRICE B. 2. which states: ” Ordinarily, under the agreed process, Part VIIIA
Category M reimbursement prices for April to June 2024 would contain adjustments for the results
of the medicine margin survey (latest results up until the end of September 2023).

This would have meant a downward margin adjustment for April to June 2024 of £16.2million, so
some prices in the April to June 2024 Drug Tariff would have been lower than they are. Instead of
making that downward adjustment to Category M, a downwards adjustment will be made to
concessionary prices during April to June 2024.
The Department will accept concessionary price
requests from Community Pharmacy England as normal but will change its approach so that the
concessionary prices granted may be lower than they would have been.”

Effectively the Concession prices will be less generous, most probably causing even bigger losses
on many drugs. CPE will be monitoring this. Unfortunately Dispensing doctors get caught up in
this despite having no input.


Dispex Concession Price Updates

As Concession Prices are added to the Drug Tariff for a particular month, Dispex will publish the full list.
Check out our behind the scenes tour of our Update pages…..