Top-up system for concession prices to be introduced from April 2024

The NHS Business Services Authority (NHSBSA), on behalf of the Department of Health and Social Care (DHSC), has announced that a retrospective top-up payment system for price concession lines will be implemented from April 2024.

Community Pharmacy England has been working with DHSC to develop a package of measures to improve the price concession system.

The latest improvement to be introduced is a new system of retrospective ‘top-up payments’ to pharmacy owners. These payments will be made for those concession lines where data subsequently identifies that the original concession prices granted were inappropriately low. If the Margin Survey of Independent Pharmacies indicates that there was a significant underpayment of a concessionary price, compared to the average purchase price paid by pharmacies for that month, this will trigger an automatic top-up payment.

The top-up payments will be applied automatically to all pharmacies who have dispensed the affected items.

These top-up payments will be paid on a quarterly basis, for products granted a concession price three quarters before. This lag is because the system will use data from the Margin Survey of Independent Pharmacies, and this process of data collection, processing and analysis takes approximately three quarters to complete.

A new section will be added to the Drug Tariff, Part VIIIE. Items which are eligible for top-up payments will be listed in this part.

The first retrospective top-up payments will apply from April 2024, to reflect activity during April to September 2023 (i.e. the first two quarters of 2023/24 will be covered by a single payment). Payments will appear on Pharmacies’ April 2024 Schedule of Payment.

Payments for 2023/24 Q3 and beyond will appear in line with the payment timetable outlined below.

Items dispensed in the following months Top-up payment month
April – June January in the following year
July – September April in the following year
October – December July in the following year
January – March October in the following (financial) year*

*For this purpose, a financial year is considered to run from April to March.

Price concession review

As part of the Year 4 and 5 funding settlement for community pharmacy, it was agreed that a review of the price concession setting system would take place. Since this announcement, Community Pharmacy England has been working with DHSC to determine improvements to the price concession system.

Other major outcomes from the review of price concession procedures were as follows:

  • All products granted a concessionary price would be classified as ‘discount not deducted’ lines for the month(s) in which they are granted a concession (implemented from April 2023); and
  • There would be a process to roll over certain concessionary prices to the following months (implemented from May 2023).

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