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New discount deduction system to come into effect in October


New discount deduction system to come into effect in October

The PSNC has said it has agreed changes to the discount deduction system with the Government for community pharmacy payments.

The new system will be split into three parts – generic medicines, branded medicines and appliances – instead of one value for all three, with separate values for each one.

Appliances in Part IX of the Drug Tariff will be deducted at 9.85 per cent, generic medicines in Part VIIIA categorised as being in Categories A and M will be deducted at 17.52 per cent while branded medicines or any other product will be deducted at 5 per cent.

The PSNC said the new arrangements will take effect from October and run over six financial quarters until January 2024.

“The discount deduction scale has been a point of contention for contractors for many years, and PSNC has long been pushing to remedy this,” said PSNC member and independent contractor Fin McCaul.

“The incoming changes are designed to both improve equity of access to margin and manage the distortions presented by branded medicines, which just don’t have the same level of discount available as generics.

“Analysis undertaken by DHSC and PSNC has determined that these changes will achieve fairer access to medicine margin across the community pharmacy sector.”

The new rate weighting from October to December will be 15 per cent and 30 per cent from January to March next year. From April to June it will be 50 per cent, from July to September it will be 70 per cent and between October and December it will be 85 per cent. From January 2024 it will be 100 per cent.

“Accordingly, two calculations will be made, one in reliance on the old rates and one in reliance on the new rates, and the total discount will be the weighted total of those two discount calculations added together,” the PSNC said.

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