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New Cat M prices means AIV down 14p in Q1, warns CPE

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New Cat M prices means AIV down 14p in Q1, warns CPE

Community Pharmacy England is warning of a reduction of £38 million in reimbursement in the first quarter of 2024 following publication of the Drug Tariff Category M pricelist for January.

There will be an overall reduction to reimbursement of approximately £35 million per quarter on like-for-like Category M lines, plus a further £3m as a result of new entrants to Category M.

Together these two factors will be equivalent to a reduction in average item value of around 14p per item, says CPE. This estimate uses the latest pharmacy dispensing volumes available to CPE as a proxy for the expected dispensing volumes in January to March.

CPE says the results from the Margin Survey of Independent Community Pharmacies up to Q1 2023/24 had indicated that there remained an over delivery of margin, and therefore in the normal course of business a reduction in the Drug Tariff would be expected.

However, in discussions with the Department of Health, CPE had lobbied for no reduction in the January Drug Tariff.

“As well as stressing the unsustainable financial pressures already being experienced by English pharmacy businesses, making further reductions impossible to absorb, we argued that the timing of this reduction, coinciding as it does with the launch of the new Pharmacy First Service, could hamper the successful launch and uptake of this critical service,” said CPE.

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