Price concession changes 'likely' behind April wait, suggests CPE

Community Pharmacy England (CPE) has suggested that the ‘extended period of time’ taken to determine this month’s concessionary prices was ‘likely’ due to an imposed change designed to manage margins.

In a newsletter sent last night, the negotiator said it was still waiting for the Department of Health and Social Care (DHSC) to determine price concessions for April, after a ‘large number’ were submitted.

The negotiator suggested the wait was likely due to a decision made by the DHSC to make changes to concessions pricing from April to 'try to manage purchase margins'.

'Community Pharmacy England opposed these changes in the strongest terms, outlining how any recovery or downward pressure on margin is unacceptable given the financial fragility of community pharmacies,' it said.

'We also raised concerns about potential delays to concessions announcements by adding another layer of complexity to the process.'

Announced last month, the government said the changes would see Category M reimbursement prices from 1 April 2024 containing ‘adjustments for underlying market prices (between July -September 2023)’.

It said that concessionary prices during April, May and June would be ‘constrained’, ‘to take account that the medicine margin survey results indicated that a downward adjustment of £16.2 million should have been made’.

‘It is important to emphasise that requests should continue to come in and will be dealt with as usual, except for the downward adjustment applied meaning lower price will be granted and/or may result in an increase in the number of no concessionary prices,’ the government added.

At the time, CPE stressed that the changes were ‘untested’ and ‘imposed by the government’ without the negotiator’s agreement.

In a statement published on 28 March, CPE said: ‘Community Pharmacy England opposes [the changes] in the strongest terms. No recovery or downward pressure on margin is acceptable given the financial fragility of community pharmacies, and we have serious concerns about the ongoing impact on pharmacy businesses and their patients.

‘While it is unclear exactly how the Department’s changes will work in practice, any further pressure on pharmacies to dispense at a loss will have very serious consequences for the sector, patients and the wider primary care system.’

And it said it was ‘continuing to fight these changes’ alongside ongoing negotiations on 2024/25 funding and calling for ‘an urgent review of medicines supply and margin systems’ to ‘assure safety for patients and economic stability for pharmacies’.

A Department of Health and Social Care spokesperson told The Pharmacist: 'Concessionary prices remain important to ensure pharmacies are paid fairly, even when market prices increase significantly and rapidly. Concessionary price requests should therefore continue to come into Community Pharmacy England (CPE) as normal.

'The medicine margin survey results, up to the end of September 2023, indicated a downward adjustment to Category M prices by £16.2 million. For April, May, and June 2024, instead of making the downward adjustment to just Category M, we are temporarily spreading the margin adjustments across Category M and concessionary prices.

'We are working with CPE to grant the concessionary prices for April as soon as possible.'

CPE also recently announced that from April, community pharmacies would receive ‘top-up payments’ when the original price concession has been deemed ‘inappropriately low’.

The first payment will apply to price concessions granted between April and September 2023, and will appear in the April Schedule of Payments, which will be paid to contractors in July.

The negotiator said at the time that it had agreed the ‘top-up payments’ with the DHSC in March but added that they this would have a 'relatively small' value and called for wider investment in the sector's funding.

CPE also announced last month that Category A reimbursement prices will transition towards being updated quarterly, despite protests from the negotiator that given current pressures on the sector, now was ‘not the time to be tampering with established price-setting processes’.