The Department of Health and Social Care (DHSC) has said that it is working with the Pharmaceutical Services Negotiating Committee (PSNC) ‘at pace’ to review the drug price concessions system.

In the latest Community Pharmacy Contractual Framework deal in September, DHSC committed to reviewing the implementation of the price concession process as ‘a matter of priority’.

A DHSC spokesperson confirmed to The Pharmacist this week that it is ‘working with the Pharmaceutical Services Negotiating Committee, at pace, to review the concessionary price arrangement to see how it can be improved’, and also pointed to the £2.6bn a year of funding for the sector and an additional £100m in September to ‘ease pressures’.

PSNC said in a statement that it was unable to provide more detail on these live discussions but said that ‘the review of the price concessions system is well underway’, that meetings with DHSC had been ‘constructive’ and that it would provide contractors with further updates when possible.

In an interview this week with The Pharmacist, PSNC CEO Janet Morrison said that discussing price concessions with the Department of Health was ‘not an easy task’.

‘It's like them marking their own homework and they say well, actually we're doing rather well.

‘They tend to take the view that the [negative] trend will ease, so it's tough now but it will get better next year or whatever and it will all come out in the wash.

‘But that might be the case if we were sustainably funded. Because we are not sustainably funded and it's now coming to bite, the pressure is so severe.’

‘My team work phenomenally hard to put across the case’, she added. ‘We’re going through some very detailed, heavy-duty discussions with them at the moment. We have put on the table a number of short-term propositions and also long-term propositions because we think actually the whole system doesn't work.’

Ms Morrison also said sometimes she felt like the Department of Health ‘really hear or understand’ the anger felt among contractors regarding price concessions, adding that while PSNC passes on anonymised concerns, she had also suggested DHSC speak to contractors directly.

‘A vicious cycle’

For many contractors, concession reform can’t come soon enough.

Contractor Sri Kanaparthy said that the situation had become ‘really, really bad’ in the last six or seven months.

He said that ‘the number of items we're having to buy over the tariff is significantly higher’, adding that rising prices were now affecting ‘bread and butter lines’, ‘where we dispense hundreds if not thousands of packs each month.’

For instance, Mr Kanaparthy said that ‘every other prescription’ he dispenses contains omeprazole, which he says he is currently paying £2.75 per pack of omeprazole 20mg capsules, but will only be reimbursed 83p under the drug tariff – ‘so that’s £2 loss’.

He said that in his group of four pharmacies, he dispenses 3000 – 4000 packs of omeprazole each month.

‘If I don't get that item reimbursed at what I'm purchasing, then that's £8,000 loss on that one line alone.

‘How can I sustain that? That's the equivalent of dispensing fees for 10,000 items,’ he said.

Omeprazole was not included in the most recent list of price concessions, published this Wednesday.

He said that for several medicines, ‘the difference of the variation and the reimbursement is not just a matter of pence, it’s 500% or 600% variation’.

Another pharmacy contractor said that part of the problem with the price concession system is that payments are not made retrospectively, and that by the time the concessionary price is published, pharmacists have already been dispensing it for months at a loss, for which they are not reimbursed.

Sunny Dhaliwal, who works as a buyer for around 35 community pharmacy branches, tracks rising prices and recommends where pharmacies could weather the storm by buying supplies six months in advance.

However, he said many pharmacies with small teams don’t have the time to forecast issues, and so will end up buying medicines at the price available on the day that they need them, often paying above drug tariff prices. Many also don’t have the cash flow to order or the space to store six months’ worth of stock.

He added that several factors were compounding the problem, such as prices being squeezed on non-concession lines, rising energy costs and wage increases, describing it as a ‘vicious cycle’.

‘My job shouldn’t be needed to keep pharmacies running,’ he said.

Issues are 'out of control'

Leyla Hannbeck, CEO of the Association of Independent Multiple Pharmacies (AIMp), said in a Tweet that the medicines supply issues and cost of medicines was 'getting out of control', adding: 'The way things are going we have severe concerns for patient care and for survival of local pharmacies.' She called on DHSC to 'do something before it’s too late'.

And last week, the National Pharmacy Association (NPA) warned that increases to the national living wage increase could lead to lay-offs without more investment in the sector.

'I don't want to let patients down'

Mr Kanaparthy said that he spends hours after his pharmacy has closed trying to obtain drugs at a reasonable price. ‘I have no family life’, he said. ‘The amount of stress that goes in my head, sometimes I feel like banging myself to a brick wall.’

‘Even if I go on holiday, I still have to be available because if the branches can get stuck I still get a text message when I'm on holiday: This can’t be obtained, can you help? I then have to speak to several other suppliers, try and see if I can obtain that medication – in most cases over the tariff.

‘I still get it because I don't want the patients to be let down. But I think this is going too far now,’ he said.

The DHSC spokesperson also said that ‘community pharmacies play a crucial role in supporting patients across the country’ and it is ‘taking action to support them – including investing £2.6bn a year into the sector as well as an additional £100m in September to ease pressures and support contractors’.

‘The UK has some of the cheapest generic medicines in Europe and we work closely with industry, the NHS and others to make sure patients can access the medicines they need,’ they continued.