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OPTIMISE BUSINESS PERFORMANCE 

The NPA’s Check34 resources for members in England cover 14 KPIs. Below is an extract from our KPI guidance notes on Average Item Value (AIV)

How is it calculated?

The AIV is the total of all drugs and appliances plus fees, minus the total value of any Medicines Use Reviews, New Medicine Services and Appliance Use Reviews, divided by the total number of professional fees.

What can affect it?

The following factors can affect the AIV:

• A change to Category M drug prices, Practice Payments or the Pharmaceutical Price Regulation Scheme 
• A change in local prescribing habits 
• Dispensing periods becoming shorter or longer, for example a doctor’s surgery deciding to write prescriptions which are for three months instead of two
• Local pharmacies closing or new pharmacies opening, therefore competition decreases or increases 
• Patents for medicines expiring and cheaper generics becoming available 
• A change in pharmacy dispensing of drugs, for example an expensive item prescribed long term for a patient

If a pharmacy has a high AIV then:

• Advance payments for that month would be higher
• If the pharmacy then has a poor dispensing month the next month, the higher advance will be deducted
• Therefore, the pharmacy will have less cash flow for that month

If a pharmacy has a low AIV:

• There may not be a known reason for having a low AIV
• The cause can be a change in Category M prices, a decrease in expensive items or a decrease in dispensed prescriptions
• A pharmacy can request NHS Business Services Authority to recheck a specific month(s) prescriptions

Download the full resource at npa.co.uk/check34-resources.