Reimbursement

Category M was introduced into the Drug Tariff in England and Wales in April 2005 and it is the mechanism used to adjust the Drug Tariff reimbursement prices of well over 600 generic medicines in England, Wales and to inform those listed in the Scottish Drug Tariff.

Category M uses information gathered from manufacturers on volumes and prices of products sold plus information from the NHSBSA Prescription Services on dispensing volumes to set prices that ensure that the total contract funding available to pharmacies contains the agreed amount of retained purchase profits. Until 2023-24 this amount is set at £800 million in England (and proportionate amounts in Wales and Scotland).

Category M presents the following problems for dispensing practices:

• It takes no account of dispensing doctors’ remuneration, nor the actual prices paid by dispensing doctors
• Prices are set in advance each quarter, and products may not be available to purchase at this price
• Estimated and actual volumes of medicines dispensed may differ, which will lead to a subsequent adjustment, affecting cash-flow.

For more information

Drug Tariff for England & Wales

Drug Tariff for Scotland