The DoH will cut Category M drug reimbursements as part of a pay deal with community pharmacists for 2010/11. Ministers plan to recoup £120 million through cuts that take effect from October.
The deal will hit dispensing practices hard after a rise in the dispensing fee scale expected in April failed to materialise.
The fee scale was cut by 8.7 per cent midway through the last financial year to bring in a 4.9 per cent decrease across the whole year. But rather than bring the fee scale back up this April, the DoH left it at the lower rate.
Dispensing Doctors Association chairman Dr David Baker warned that the dispensing fee was likely to remain low. He pointed out that adjustments are calculated on advice from the Doctors' and Dentists' Review Body (DDRB) and estimates of the financial value of dispensing.
A public sector pay freeze means the DDRB will not call for a pay rise, he said. Since pharmacists dispensed more than predicted over the past year, GP dispensers were likely to have seen a similar rise, Dr Baker said. These two factors meant the fee scale was unlikely to rise.
Dr Baker added that some of the Category M losses had been offset for small pharmacies by the DoH, but this support was not available for dispensers.
'It does not seem fair, and it is very bad news,' he said. 'Profitability will fall in dispensing practices and could fall to the extent that dispensing practices will no longer be able to dispense.'
He said profits that some GPs relied on to keep branch practices open could disappear.
Dr Baker said he hoped to begin talks with the DoH over the impact of the changes.