Category M reimbursement prices will increase by £15m per month from August, the Pharmaceutical Negotiating Services Committee (PSNC) has announced.

PSNC revealed today (19 July) that the current category M clawbacks – equating to a 35p reduction per item on drug tariff prices – will end next month, as confirmed by the Department of Health and Social Care (DHSC).

The news comes after PSNC held several meetings with the DHSC, pointing out the impacts of the reductions on contractors’ cashflow issues caused by clawbacks, it said.


‘Recovering excess margin’


In August 2017, PSNC revealed that reimbursement prices had been reduced by £15m a month, leading to a reduction of 17-18p per item on drug tariff prices until August 2018. At the time, the DHSC imposed these reductions to recover estimated excess margin delivered to pharmacies in 2015/16 and 2016/17, PSNC said.

This was followed by a further 17p reduction per item this month.


‘Very positive’ decision


‘PSNC director of pharmacy funding Mike Dent said: ‘The decision to cease margin recovery in the short-term in light of PSNC’s representations about contractors’ cash flow is very positive and reflective of the collaborative relationship that we are trying to rebuild with the DHSC.

‘PSNC will be working, through the negotiations on funding and in discussions with the DHSC to get the best possible deal for contractors and to ensure that any future mechanisms to correct margin delivery are as manageable as possible in terms of cash flow.’

The prices will apply to August and September, with October prices based on a new drug tariff, which is ‘unknown at the moment’, PSNC said.

PSNC highlighted that ‘underlying category M prices will continue to be based on manufacturers’ data, so prices will still reflect the lower purchase prices that led to the additional reduction in prices seen in the July drug tariff’.