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For any drugs granted price manufacturers, wholesalers and importers,
concessions, contractors are through powers afforded by the Information
and Disclosure Regulations 2018. Following
automatically reimbursed at the their initial investigation, DHSC may then
new price for that month. decide to grant an initial price concession
which will also include a margin uplift for
In other words, price concessions are drugs granted a concession. At this point
temporary adjustments made to the Drug CPE compares DHSC’s initial proposed
Tariff reimbursement prices of certain price, where offered, against the reported
generic medications that are dispensed on contractor purchase prices, latest wholesaler
NHS prescriptions. These concessions are prices and any further market data gathered
temporarily granted when the market price of after the initial application. The data is used
a generic drug rises unexpectedly, typically to determine a minimum acceptable price
due to supply shortages, increased demand, below which a price concession cannot be
or manufacturing issues. When such price agreed to. Where we CPE do not accept a
increases occur, dispensing contractors might price proposal they will seek to negotiate
otherwise be unable to source the drug at a a more acceptable price for contractors.
cost that aligns with the monthly Drug Tariff Care is taken to ensure that the prices
price, potentially leading to financial losses. requested are fair and reasonable based on
Price concessions aim to mitigate this risk the available purchase data and wholesaler
by temporarily setting higher reimbursement selling-out prices across the country.
rates, reflecting the actual market conditions.
All of this bodes well if we didn’t have
The good news here is that as all dispensing clawback to eat up that margin uplift
contractors are in the same boat when it that DHSC has added into their equation.
comes to the supply of generics at a cost However, that aside, you really don’t have
greater than tariff, the DHSC will create new any place to go even if concession price
tariff prices which cover most of the cost doesn’t offer profit, as you will still need
increases. Why? Well, if they didn’t then we to purchase and dispense the item to the
would all go out of business very quickly and patient.
that would benefit no one, especially the NHS.
The way it works is that upon receiving Digging deeper into the data for
CPE’s initial request, DHSC conducts its July will help you to understand
own research into the market, by gathering what I am talking about here.
volume and price information of drugs from
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