Part VIIIC – Arrangements of payment for products supplied free of charge or products with a nominal price
Published on: 11th May 2023 | Updated on: 31st May 2023
In September 2021, the Drug Tariff was updated to include a new section, Part VIIIC. Part VIIIC sets out arrangements of payment for products with a nominal price (i.e where the purchase price of the product is significantly lower than its NHS list price).
Products listed in Part VIIIC are available at nominal prices or free-of-charge because of commercial deals in place between the manufacturer or supplier and the NHS England and NHS Improvement (NHSE&I) which allows manufacturers to supply a drug to the NHS at a reduced cost compared to its published NHS list prices as authored in the NHS Dictionary of Medicines and Devices (dm+d).
What types of products will be listed in Part VIIIC?
Part VIIIC will include products that the Secretary of State is on notice are available from a manufacturer or supplier at a nominal price that is significantly below the NHS list price for the product because of a commercial arrangement between NHSE&I and the manufacturer or supplier of the product.
Inclisiran is a new low-density lipoprotein cholesterol (LDL-C)-lowering treatment indicated for adults with primary hypercholesterolaemia (heterozygous familial and non-familial) or mixed dyslipidaemia. Novartis is working collaboratively with NHSE&I to develop and/or improve patient pathways to support improved lipid management, which is one of the priorities set out in the NHS Long Term Plan. Inclisiran has been identified by NHSE&I as a treatment what it wishes to adopt systematically and at scale to help tackle cardiovascular disease (CVD) in a large high-risk patient population who are unable to reach their LDL-C goals on maximum tolerated lipid lowering therapies. To achieve the scale and volumes required to positively impact a nation’s cardiovascular health outcomes, the initiation and management of this treatment will be predominantly carried out within a primary care setting.
AAH UK has been awarded the tender for supply of Inclisiran to primary care in England under a Solus distribution arrangement. AAH UK are expected to start selling Inclisiran into primary care from September 2021. Inclisiran will be available to order from AAH at a nominal charge of £45 per pack, as agreed within the commercial agreement between Novartis and NHSE&I for supply against NHS prescriptions. Stock for private prescriptions (list price) can be obtained by contacting Novartis Customer Care directly on 08457 419 442 or via e-mail email@example.com
The Secretary of State has determined the basic price for Inclisiran based on the nominal price of the listed pack size and takes into account the commercial arrangement between NHSE&I and the manufacturer or supplier, although the Secretary of State will not have been privy to the details of the commercial arrangement.
Ordinarily, pharmacy contractors would have been reimbursed the NHS list price for Inclisiran if it was listed in Part VIIIA of the Drug Tariff, as a Category C product. As it would not represent value for money for the NHS and the taxpayer to reimburse contractors the NHS list price for Inclisiran and in order to implement this treatment at an affordable price and limit the financial impact on primary care, an alternative reimbursement process had to be sought.
The Secretary of State determined a basic price for Inclisiran based on the commercial arrangement between Novartis UK and NHSE&I which ensures that this drug is available to purchase at the nominal price via the designated wholesaler (AAH UK). The commercial agreement, executed by the Commercial Medicines Directorate (CMD), ensures the affordability (and reduces the drugs budget impact) of the treatment to enable adequate access for high-risk atherosclerotic cardiovascular disease (ASCVD) patients across England.
Contractors should not expect to incur any additional charges or fees when ordering Inclisiran from AAH UK. The product will be available to order at the nominal charge of £45 per pack, as agreed within the commercial agreement between Novartis and NHSE&I. However, contractors who are unable to source products listed in Part VIIIC at or below the basic price, or who are the subjected to additional charges when purchasing the products listed in this Part, may request a review of the basic price and repayment of any additional costs incurred. The review requires the following steps to be taken:
- If there are any issues with the supply, ordering and pricing of the product, contractors must contact AAH UK in the first instance.
- This can be escalated to Novartis via the wholesaler if appropriate, and a resolution to all issues raised will be sought within 5 working days from receipt.
- Should no resolution be identified by the suppliers within 5 working days of receipt, then contractors should escalate the issue to Community Pharmacy England who will work in collaboration with NHSE&I and Novartis to seek a resolution to issues raised.
- To support the handling of the review, contractors are required to submit evidence of any difficulties experienced including issues with pricing or supply. Any claims and supporting evidence will then be referred by Community Pharmacy England to Department of Health and Social Care.
Following a successful review, where pricing issues are identified, any adjustments will be applied by the NHS Business Service Authority (NHSBSA) to the contractors account at the earliest possible payment date.
The Department of Health and Social Care (DHSC) and NHS England (NHSE) announced a new approach to the supply of COVID-19 antivirals to patients living in the community.
Ministers have decided that this will follow the business as usual approach to medicines supply, with prescribers in general practices being asked to prescribe the medicines and prescriptions being dispensed in community pharmacies. However, pharmacy contractors will be able to order the antivirals free of charge from the Government’s stockpile, via Alliance Healthcare.
Currently, eligible patients can access COVID-19 antivirals via Covid Medicines Delivery Units.
NICE issued guidance at the end of March 2023 on the use of several COVID-19 antivirals, which includes some products being prescribed in primary care for eligible patients. The NHS has a requirement to implement this NICE recommendation within 90 days of its publication.
Accessing supplies of COVID-19 antivirals
Earlier in the pandemic, the UK Government purchased large quantities of several COVID-19 antiviral products and these have been stockpiled for future use.
DHSC has signed an agreement with Alliance Healthcare to distribute two of these products to community pharmacies in England:
- Molnupiravir 200mg capsules (Lagevrio 200mg capsules)
- Nirmatrelvir 150mg tablets and Ritonavir 100mg tablets (Paxlovid 150mg/100mg tablets)
The products will be supplied free of charge to contractors.
Alliance Healthcare UK will supply selected Covid-19 antivirals free of charge to all community pharmacies and dispensing doctors in England only from 9 May 2023. The selected Covid-19 antivirals are listed below with PIP codes:
|Lagevrio 200mg capsules
|Paxlovid 150mg/100mg tablets
Orders for these lines will arrive as part of your usual Alliance Healthcare delivery service and, if ordered in isolation, will not be subject to Alliance Healthcare’s low spend surcharge.
To receive these products, you can simply order from Alliance Healthcare in your usual manner. These products are available on a same day delivery service and will be supplied on an agency basis on behalf of the DHSC. Alliance Healthcare’s terms and conditions shall apply to all anti-viral medicines supplied by the DHSC via Alliance Healthcare. Please visit the following website for further details: https://www.alliance-healthcare.co.uk/agency-terms-and-conditions-0
Reimbursement for dispensed products
The usual Drug Tariff fees will be paid in relation to the dispensing of prescriptions for these products.
As the stock has been supplied free of charge from the Government stockpile, contractors will not be reimbursed based on the manufacturer’s list price, which is typically the case for proprietary medicines. Contractors will receive a nominal reimbursement amount of £2.50, which DHSC has set to recognise the purchase margin contractors would ordinarily retain on products they had purchased to fulfil a prescription.
Community Pharmacy England’s view
Community Pharmacy England has been discussing the proposed approach to distribution of COVID-19 antivirals with NHS England and DHSC for many months. During these discussions, we have maintained a stance that the supply of these products should not be considered business as usual, as there will be additional elements of activity which contractors need to undertake in relation to dispensing these prescriptions.
Additionally, we believe work undertaken by contractors related to the COVID-19 pandemic should attract additional funding, over and above the baseline community pharmacy funding.
NHS England and DHSC have not been willing to accept the arguments put forward by Community Pharmacy England and consequently the decision by Ministers to pursue the business as usual approach is an imposition of policy, rather than a negotiated agreement with Community Pharmacy England.
Commenting on this decision by Ministers, Janet Morrison, Community Pharmacy England CEO, said:
“Pharmacy contractors and their teams should be fairly funded by the NHS and Government for additional workload that results from the pandemic. We made the case for this to apply to the new arrangements for the distribution of C-19 antivirals, but Ministers were not willing to agree to our legitimate request.
“We previously warned Ministers that without additional funding, the roll-out of additional services and the PQS during Year 5 of the CPCF deal was neither feasible nor affordable. Community pharmacies are having to work harder and harder for less money and many are at breaking point.
“The same argument applies to additional workload falling on the sector: more money is needed to safely resource additional work.”