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Actavis Accumulator Discount Scheme
Love it or hate it, category M is here to stay but how does it actually work? Mike Dent finds out
Category M was introduced into the Drug Tariff in April 2005, on the introduction of the new community pharmacy contract in England and Wales. With the second anniversary of category M fast approaching, it is a good time to consider how it works, what it is meant to achieve and what the future may hold.
The key points about category M are as follows:
* Category M is used to adjust the reimbursement prices of more than 500 medicines.
* It uses information gathered from manufacturers on volumes and prices of products sold plus information from the NHSBSA Prescription Pricing Division on dispensing to calculate margins in the supply chain.
* It is normally adjusted on a quarterly cycle in light of this information and negotiations with PSNC.
* As prices have to be set in advance each quarter, 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 PSNC to ensure that the scheme operates correctly and to identify anomalies. Regular feedback meetings are held with the DH.
* It is the principal price adjustment mechanism to ensure delivery of the purchase profit income promised as part of the new pharmacy contract.
Pricing issues
One problem that can arise is products not being available to purchase at the category M reimbursement price. The Department of Health sets category M prices at levels substantially above the prices notified by manufacturers. But when the category M reimbursement price for a particular product falls, it may take time and sustained pressure from pharmacies for wholesale prices to respond. During this period, it is essential that contractors exert maximum pressure on wholesalers. There have been a number of examples where manufacturers' prices were below the Drug Tariff price but a product could not be obtained at the Drug Tariff price from a number of wholesalers.
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