Page 29 - P4304.1-V110 PSUK Mag June 2025

The Drug Tariff – Category M
What is Category M?
Category M was introduced into the
Drug Tariff in April 2005 when the
new community pharmacy contractual
framework was launched. Key points about
the system:
Category M is used to set the
reimbursement prices of over 600
medicines.
It is the principal price adjustment
mechanism to ensure delivery of the
retained margin guaranteed as part of the
contractual framework.
It uses information gathered from
manufacturers on volumes and prices of
products sold plus information from the
Pricing Authority on dispensing volumes to
set prices each quarter.
As prices have to be set in advance,
estimated volumes are used which may
differ from actual volumes. However, the
built-in correction mechanism ensures that
the quarterly adjustments account for any
over or under recovery in practice.
It 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.
Community Pharmacy England puts
considerable resources into monitoring all
elements of funding, including Category M.
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P4304.1-V110 PSUK Mag June 2025.indd 29
For us, the importance of the uplift is that
it will cover many of the generic items we
use on a day-to-day basis, giving us a little
more margin on these prescriptions.
You can have a look at the April 2025 Cat M
prices here.
https://cpe.org.uk/funding-and-
reimbursement/pharmacy-funding/
funding-distribution/retained-margin-
category-m/
I am sure there are some of you who might
be new to dispensing and you are wondering
what on earth I am talking about. Maybe
a refresher on the generics section of the
Drug Tariff might be useful. You need to get
online and take a look if you haven’t already.
https://www.nhsbsa.nhs.uk/pharmacies-
gp-practices-and-appliance-contractors/
drug-tariff
The NHS Business Services Authority
(NHSBSA) Drug Tariff is a vital document
for dispensing contractors in England
and Wales, serving as a reference for
the reimbursement and remuneration of
dispensed NHS prescriptions. (For Scotland,
please see the end of this article).
One of the sections of the Drug Tariff is
Part VIIIa, which specifically covers generic
medicines.
The Drug Tariff | PS Magazine 29
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20/05/2025 15:39:23