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Funding Settlement for 2011/12
PSNC and the Department of Health have reached agreement on the funding package for 2011-12. The settlement package comprises:
- Funding for 2011/12 of £2.526 billion;
- Category M prices will be reduced by £39 million per quarter from October 2011 to March 2012.
- From April 2012 generic medicine prices (Category M) will be reduced by an additional £40 million per annum;
- Prescription volume thresholds for the establishment payment and practice payment will increase by 3% from October 2011, as in previous years;
- A number of changes will be made to drug reimbursement arrangements, including introduction of a ‘Specials’ Tariff from November 2011, and other changes later in the year;
- A CIP package of £20 million for pharmacy contractors, to recognise the impact of prescription payment inaccuracies;
- An increase in the practice payment of 3.2p, providing a practice payment of 73.5p per item.
Prescription volume forecasts indicate that there may be a slowing of volume growth seen in recent years. Therefore, practice payments are being increased from October 2011. Further adjustment may be needed in the light of monthly dispensing data. Other fees and allowances remain unchanged.
As part of the settlement PSNC has agreed to work with the Department of Health to finalise and implement a number of changes to simplify reimbursement arrangements. Details of the CIP package and guidance for contractors are being published separately. It is important for contractors to read these carefully.
PSNC CEO Sue Sharpe, said:
“In light of the current economic climate, including financial pressures facing the public sector and demands for efficiency savings, as well as the pressures faced by community pharmacies, and the effect of new openings, the negotiations this year have been especially difficult.
“PSNC has voiced concerns about the impact of cuts in reimbursement prices on pharmacy cash flow and viability, and has urged the Government to offer funding that provides stability for contractors, pending the conclusion of negotiations following the Cost of Service Inquiry (COSI). These concerns were listened to and accepted by the Minister in agreeing the settlement.”
Posted 8 September 2011