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Funding Changes from April 2011
The Department of Health has confirmed a number of changes to pharmacy contract funding from April 2011. These are subject to the confirmation of the 2011/12 settlement, which will be informed by the results of the Cost of Service Inquiry.
The changes are as follows:
- Up to £55m a year will be invested for the next two years in pharmacy service development, including a national New Medicines Service, targeted MURs, and strengthening of clinical governance.
- From April 2011, fees and allowances will be set to deliver £20 million less over the course of the year by reducing the Practice Payment level from 70.9p per item to 70.3p per item and by the removal of the Transitional Payment. In October 2010 PSNC secured agreement from DH to postpone recovery of £20m excess margin until 2011/12 and this reduction in fees and allowances is intended to repay this £20m.
- Generic medicines prices (Category M) will be reduced by £10 million per quarter for 2011/12. In order to defer the recovery of the aforementioned £20m excess margin, for the final two quarters of 2010/11 Category M prices were kept higher than the level required to achieve full recovery and this reduction addresses that.
- A further adjustment amounting to a £50 million reduction will be made to Category M prices for 2011/12. In September 2010 PSNC agreed to a prospective reduction of Category M prices from April 2011, subject to the provisional results of the 2010-11 margins survey. This reduction is based on early indications from the current margins survey that margins are substantially exceeding the agreed £500m.
Posted 15 March 2011