Category M webinar now available on-demand

Pharmacy owners can now watch a recording of Community Pharmacy England’s recent webinar about Drug Tariff Category M and retained margin on-demand.

Around 500 people registered for the webinar held earlier this week, which aimed to provide pharmacy owners with a better understanding of the processes behind the delivery of margin, our work in this area, and how Category M fits into wider funding mechanisms. Approximately 70% of attendees told us that they found it quite or very useful.

The online event covered the mechanics of how Category M works in some detail, describing how the changes to quarterly Category M price lists are determined by the Department of Health and Social Care (DHSC). Speakers from our Funding and Reimbursement Team were later joined by representatives from DHSC to address questions from pharmacy owners.

Attendees heard about the inputs which go into calculating Category M changes, particularly the Margin Survey. This survey examines the purchasing invoices of 240 independent pharmacies over the course of a year to assess the levels of retained margin being earned. The results are then corroborated against other data sources, such as wider supply chain data. This process is central to the monitoring of margin delivery, and we are continually working with DHSC to identify and implement improvements in how margin is measured.

Community Pharmacy England believes there is clear evidence that the supply chain is generally underfunded. In particular, the current reimbursement system has failed to keep pace with the massive growth in prescription volumes over the last decade, meaning that margins have been spread thinner. The Category M pricelist for January 2024 has once again highlighted this unsustainable position.

As we have been arguing for many months, the current community pharmacy funding envelope is not large enough to support the existing network of pharmacies sustainably. This means that even with the system functioning as intended, there are still unsustainable pressures on pharmacy businesses. Given the unprecedented levels of pressure currently being experienced by pharmacy owners – especially around medicines pricing and supply issues – we are pressing DHSC very hard to protect pharmacy owners from pricing shocks, and we have shared the feedback received during this webinar with them in full.

Our Committee of pharmacy owners regularly discusses issues around funding and reimbursement, with Category M high on their list of priorities. At our upcoming January meeting, Committee Members will again be considering the current margin system in detail, exploring whether radical change is needed in the way this funding is delivered to pharmacies. The ideas shared during the webinar will be input into these discussions.

Click here to view an on-demand version of the webinar

You can also view the slide pack used: Category M webinar slides

Mike Dent, Director of Pharmacy Funding at Community Pharmacy England, said:

“The management and monitoring of margin is a complex system, and our recent webinar aimed to try and demystify some of the processes behind it. It was great to have so many people join at this busy time and the contributions made will certainly help in our discussions about this issue.

Things are extremely tough for pharmacy owners right now and every penny counts. Changes to reimbursement prices have far-reaching consequences, and we warned Government and the NHS that, if nothing is done, the ongoing financial squeeze on pharmacies will soon have catastrophic consequences for community healthcare. The Category M price reductions have come at an awful time, and we implore the DHSC and NHS England to engage with us on a desperately needed revision to the pharmacy reimbursement system.

In the upcoming 2024/25 CPCF negotiations we will be arguing for write-off of any historic margin over-delivery, more fundamental reform of the margin delivery framework, and an economic review of the medicine supply chain. We recently coordinated a letter to the new pharmacy Minister from numerous MPs supporting our funding asks, and we will continue to work to make them happen.”

Related resources

NHS medicines shortages putting lives at risk
The national media coverage we helped generate to raise awareness the impact of medicine supply issues, including a statement from our CEO.

Community Pharmacy England briefs MPs on medicines supply issues
Details of the event we held last summer to highlight our ongoing concerns about medicines supply to MPs. The article includes a briefing that pharmacy owners can use to support our efforts by raising the issue with their own MPs

Price Concessions Briefing Webinar
A webinar we held in the autumn that addressed pressing concerns about the price concessions system, medicine supply and pricing challenges for pharmacy businesses.

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