Page 26 - P4403.59-V51_Numark Magazine May 24 DIGITAL

UNDERSTANDING

CATEGORY M:

How did we get to where we are?

Part Two.

Numark members have really felt the impact of further reductions to
Category M announced in January. This is leading to many members
asking the questions of the current tariff and how it is calculated. We
invited colleagues from Community Pharmacy England to explain how
it all works and the underlying tools they use to ensure the network are
receiving the £800 million in retained margin.

In last month’s issue and part one of this guide, they covered the history of
Category M, how the margin fits with pharmacy funding, how it’s measured and how
we make sure it is accurate.

In part two, we are exploring adjustments impacting
the tariff and what is driving reduction in margin
felt by members over the past six months.

So what is Category M?

Category M was introduced into the Drug Tariff in April 2005, when the new
community pharmacy contractual framework was launched which officially
recognised Margin as an income stream for community pharmacies. It is the
mechanism used to set the reimbursement prices of over 600 medicines.
It broadly contains the most common/high usage generically available medicines,
and is the principal price adjustment mechanism to ensure delivery of the
retained margin guaranteed as part of the contractual framework.
DHSC use their legislative powers to gather information from suppliers on
volumes and prices of products sold, plus information from the Pricing Authority
on dispensing volumes, to set prices each quarter.
As covered in part one, the margin survey of independent pharmacies
captures data on margins earned, including the actual impact of Category
M reimbursement changes, and the outturns from the survey then inform the
setting of the next Category M price list.
Category M is closely monitored by Community Pharmacy England to ensure
that the scheme operates correctly and to identify anomalies. Regular feedback
meetings are held with the DHSC.

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