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Deciphering the Drug Tariff

Dr Lisa Silver offers her tips on how a little regular reading can save money.

The Drug Tariff should be seen as a vital part of the running of your dispensing practice. Unfortunately, this weighty tome, delivered every month to the practice, is filled with small, seemingly impenetrable print, so most dispensing GPs and dispensers fail to ever look inside.

But take it one step at a time, and you too can benefit from the remarkable information that is inside.

Each month the Drug Tariff is issued with some minor changes. The bulk of these are shown in the preface with individual price changes given within the main body. Every quarter there is a major adjustment to the price of around 500 Category M generic drugs. These are adjusted to deliver a guaranteed purchase profit for pharmacies as opposed to dispensaries.

The tariff is effective from the first of each month. It covers such things as the basic price of drugs, zero-discounted drugs, appliances, home oxygen therapy, notes on charging, dental and nurse prescribing, out-of-hours formulary and drugs not to be prescribed.

It does not cover the deduction scale or the dispensing fees for dispensing doctors. Look for these in the GMS Statement of Fees and Entitlements on the DoH website (www.dh.gov.uk).

Additions and deletions
Start with the preface, which indicates the drugs added to or deleted from the previous tariff, and the date at which the changes become effective. This is key for all practices, because you do not want to dispense a drug for which you will receive no reimbursement.

New additions to the list of zero-discounted drugs is an important area due to the DoH clawback - or reduced reimbursement - of over 11 per cent. Even with claiming a dispensing fee, you will incur a loss in dispensing these items, unless you have negotiated a suitable discount when purchasing.

Zero-discount loss
As a rule, if the zero discount tariff price is over £18 per item, you will dispense the drug at a loss. If you can negotiate a 5 per cent discount on the purchase price, then you start to dispense at a loss when the tariff price is over £34. This is very useful to know particularly as insulins are invariably ZD drugs and the newer ones can be expensive.

Once I have had a quick scan through the preface, absorbed any major changes and informed my dispenser, I go to part two 'Requirements Enabling Payments to be Made for the Supply of Drugs, Appliances and Chemical Reagents'.

This rarely changes, but the information is key. It shows how payments are made for the supply of these items and how to claim for broken bulk or out-of-pocket expenses, and how to endorse prescriptions.

Then, I go to part four 'Appliances', where there is a list of the huge range of appliances that we can perfectly legitimately prescribe - but often fail to realise this.

Some items, for example eye baths, are very low cost and will have no effect on your drug budget at 23p per item. But they could allow an elderly person to manage their eye drops themselves rather than need social services medication-only visits.

The most well-thumbed section is part eight, which lists all the generic and branded items that we prescribe. Get used to the symbols to indicate a price change, whether an item is a special container and what category the drug falls into, and you are well on your way to saving money - for yourself and the NHS.

Dr Silver is a dispensing GP in Oxfordshire

Contact GPdispensing@haymarket.com


The DDA is the only organisation that ensures the views of dispensing practices are heard by the government and key negotiating bodies. We also provide telephone advice to members and essential updated information via our website, and email alerts. To find out more call Jeff Lee on (01751) 430835 or visit www.dispensingdoctor.org

The DDA does not necessarily support or endorse the opinions or information contained on this page.

Quarterly changes to the Drug Tariff, April 2008

My Category M rule of thumb
If you see a drug that has a seemingly overinflated reimbursement price, such as phenytoin 100mg tablets which had a tariff price of £40 for quarter 4 of 2007, there is a chance that it may have a price drop forced on it the next quarter.

The reimbursement price for phenytoin 100mg tablets is now £35. Wind down your stock of highly priced drugs towards the end of the quarter, so that you do not pay more than you will be reimbursed.

Price increases
Prescribed drugs with price rises this month include levothyroxine 100 micrograms to 84p, mebeverine 135mg to £12.55 and all sizes of beclometasone inhalers which remain more costly than the branded CFC-free varieties.

Falling prices
Price cuts include alendronic acid 70mg now at £3.66 and, with the hay fever season nearly upon us, beclometasone nasal spray falls to £3.70.

Risperidone is now a Category A generic drug and will be subjected to monthly variations in price. Risperdal is now off patent and is an expensive drug.

If you are still purchasing and dispensing the branded Risperdal tablets rather than the orodispersible variety, you will need to ensure that the main body of the prescription is written as Risperdal. The price of generic risperidone is forced down, so you would be reimbursed much less. If you are dispensing generic risperidone against a risperidone prescription, you would be reimbursed appropriately.

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