Home Summary of 2011/12 Funding Agreement
The detail of the changes in contractor funding for 2011/12 are set out below. These changes were published in the October 2011 Drug Tariff and took effect from 1st October 2011.
Note these changes may not all apply to England and Wales. Check the Drug Tariff for more details.
(For information on the 2010/11 agreement click here)
2011/12 Funding Agreement
Total contractor funding has increased to £2,526m.
The 2011/12 settlement is intended to reflect an interim years funding. 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.
The settlement includes:
Copies of the Category M reimbursement price lists can be found in the National Contract Funding section of the site.
Changes in Fees and Allowances
There is no change to the fee levels of the dispensing fee, additional fees, repeat dispensing payment, and EPS Allowances. Transitional payments ceased in England from April 2011. The arrangements for the following fees and allowances will change with effect from 1st October 2011:
Establishment Payments
The level of the Establishment Payment remains unchanged however there has been an increase in the payment thresholds of 3%.
More detailed information on Establishment Payments can be found in Part VIA of the Drug Tariff.
Practice Payments
The threshold to receive the Practice Payment, other than a contribution for provision of auxiliary aids for people eligible under the Disability Discrimination Acts has risen by 3% to 2360 items per month.
For contractors dispensing over 2360 items per month, the Practice Payment for the top level has increase to 73.5p per item.
More detailed information on Practice Payments can be found in Part VIA of the Drug Tariff.
Funding Frequently Asked Questions
Are the Department of Health clawing back excess purchase profit earned in the first half of the year?
From the results of the 2010/11 survey into retained buying profit, it was estimated that purchase profit levels were exceeding the target level in the first half of 2011/12.
To ensure that in the second half of this financial year only the agreed levels of purchase profit income are available to contractors, Category M prices are being reduced by £39m per quarter which equates to approximately 17p per item.
This is not a retrospective clawback; rather it is an adjustment in the rate of funding delivery to ensure the correct level of funding will be delivered in the financial year.
When will the funding changes begin to affect my payments from NHS Prescription Services?
The changes to the funding arrangements will take effect for prescriptions dispensed from 1st October 2011. Prescriptions dispensed in October must be submitted to the NHS Prescripition Services for pricing before the 5th of November. Contractors will receive an advance payment for October's prescriptions in early December. In early January 2012, once the NHS Prescription Services has completed the pricing of October's prescriptions, the remaining balance will be paid. The payment that will be made to contractors in early January will be the first payment to reflect the new payment levels.
Detailed information on the funding timetable can be found on the PSNC website.
Why is the Practice Payment increasing from October 2011?
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.
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