July 30th 2024

By Ailsa Colquhoun

Dispensing GPs warned of August Category M price reductions

Adjustments are being made to Category M prices from August, Community Pharmacy England has warned.

The Department of Health and Social Care made an error in the calculation of July 2024 Category M prices, resulting in an increase in Category M reimbursement of approximately +£21m per quarter.

Based on corrected calculations, DHSC have stated that the change in Category M reimbursement should have been a reduction of -£6m per quarter.

Therefore, the erroneous increase in July would result in £27m overall extra reimbursement over the July quarter (i.e. circa £9m per month). 

DHSC consulted with Community Pharmacy England about how to address this error, and our firm position was that DHSC should not seek to enact any mid-quarter correction in Category M prices. However, DHSC has informed Community Pharmacy England that price adjustments in Category M prices will take place from August, with the aim of reducing reimbursement by circa £9m per month. Additionally, the extra reimbursement delivered in July will be taken back via further Drug Tariff price reductions between October 2024 to March 2025.

Community Pharmacy England CEO Janet Morrison said: "We have reiterated our firm stance that this is not an acceptable resolution to the situation. Community Pharmacy England’s firm position remains that the margin element of the [pharmacy contract], along with the overall funding quantum, needs urgent uplift as it is insufficient to reflect the ever increasing volume of dispensing and services provided by the sector. Any more reductions to funding are likely to exacerbate the stream of pharmacy closures we are seeing across the country, and put patient access to pharmaceutical services at risk.”

DDA members can view the full spreadsheet  sorted by price, price change, and price % change by visiting the library of Category M updates