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Scottish contractors see fine print of 2019-20 settlement

Part 7 Drug Tariff discount clawback for contractors in Scotland has been retrospectively reset to six per cent effective from April 1 2019, while the Part 11 discount clawback rate has been reset to 4.92 per cent effective from May 1.

This news, along with the key headline elements of the 2019-20 settlement for pharmacy contractors in Scotland, has been set out in a circular sent out to NHS Boards on July 8.

When the financial package was announced in April, Community Pharmacy Scotland said it was not quite the one it wanted to see, although it welcomed the commitment to Pharmacy First through the introduction of funding into guaranteed streams.

The global sum in Scotland for 2019- 20 is set at £183.559m, an increase of £2.6 million on the previous year, while the non-global sum rolls forward at its current level set at £1.3m.

Services integrated

As previously announced, the Pharmacy First service has been integrated with the national Minor Ailment Service with effect from April 1 2019, and remuneration level set at the existing level of £1.1m. 

A sum of £20m will be mapped from Part 7 medicines to the guaranteed elements of funding in 2019-20. The sum will be spread across an agreed basket of targeted drugs. (Part 7 medicines in the Scottish Drug Tariff are broadly equivalent to Category M in the England and Wales Drug Tariff).

This, combined with the global sum uplift and the Pharmacy First funding, plus £20m mapped from the Drug Tariff in 2018-19, means the total amount of guaranteed remuneration for Scottish contractors in 2019-20 is £224.659m.

However, the guaranteed minimum margin retained by contractors on the purchase of generic drugs will be reduced to £80m in 2019-20. But dependent on market conditions, contractors could retain 100 per cent of the first £10m earned above the guaranteed minimum, providing them with the opportunity to earn up to £90m in retained margin. Any margin earned above £90m will be shared on a 50:50 basis with NHS Boards.

Any margin earned in 2018-19 and subject to 50:50 sharing arrangements will be subject to clawback in 2019-20. Clawback accumulated in 2018- 19 is around £18-£20m. As such, the generic clawback rate has been applied at the rate of six per cent from April 1 2019. 

As part of the settlement, an adjustment or temporary suspension of the generic clawback rate will be made to ensure there is sufficient cash liquidity in the pharmacy network, should market conditions deteriorate during the 2019-20 financial year.

Revised remuneration model

The circular also sets out how payments from the dispensing pool and other pooled payment schemes will be managed.

It confirms that Pharmacy First will be integrated with the Minor Ailment Service from April 2020 to create a new Minor Ailment and Common Clinical Conditions Service, at which point a revised remuneration model will be introduced. The transitional arrangements for 2019/20 for contractors providing Pharmacy First (for UTIs and impetigo) sees a payment of £20 per activity coming into effect from July.

All contractors who have arrangements with NHS Boards for the provision of the emergency hormonal contraception will receive an increased capitation payment of £30 per patient. This recognises the impact that this service has had on the overall unintended pregnancy rate in Scotland and that payments had remained unchanged in the introduction of the current remuneration model.

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