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How to maximise income from personally administered drugs

Dr Jeremy Phipps says practices that do not dispense may be overlooking opportunities to boost their income from drugs.

Practices receive a dispensing fee and reimbursement of the drug's cost (Image: UNP)
Practices receive a dispensing fee and reimbursement of the drug's cost (Image: UNP)

With many GPs practices experiencing a dip in profits, it is important not to overlook any sources of income, including claiming for all the drugs reimbursement and dispensing payments due to them.

All practices, whether they dispense or not, can legitimately claim for any medicines they use. 

Dispensing doctors are generally well aware of this, but some non-dispensing practices are missing out even though some of the payment rules favour them.

Drugs administered

All GPs may claim for personally administered (PA) drugs. These are the medicines that doctors or nurses give directly to patients. Vaccinations are by far the most common.  

Practices receive a dispensing fee and reimbursement of the cost of the medicine. This reimbursement cost, shown in the NHS Drugs Tariff, is however reduced by NHS clawback, a proportion that is meant to reflect the projected discount that practices receive from their drugs wholesaler. 

The dispensing fee pays for supplying and consequent administration of the medication and covers each individual item. So, for example, if a minor surgery requires a suture and a local anaesthetic, the practice can claim two fees.

Reimbursement formula

The formula for reimbursement is: the medicine reimbursement price plus dispensing fee plus VAT allowance minus clawback equals total amount paid.

The reimbursement price is listed monthly in the NHS Drug Tariff, MIMS and the BNF.

The problems start with medicines for which there is no available discount available or the discount is not high enough to offset the clawback – this is always the case with controlled drug injections. 

Even worse, the cost of a medicine is occasionally more than the Drugs Tariff reimbursement. Without care, this means doctors may in effect pay to give a medicine to a patient.

Negotiating with your supplier is important to maximise any potential discounts since the rules on dispensing are rigid for doctors.

Even if a practice could prove it was receiving no discount on a medicine, the clawback would remain.

Making gains

Generally the smaller the number of items dispensed, the higher the dispensing fee and the lower the ‘clawback’. 

The items include all dispensing by a practice, not just personally administered drugs. Consequently this is one area in which non-dispensing doctors can gain as their practices will have fewer items to claim.

Since the clawback is around 7 to 10% and the fee for supplying a drug to a patient is around £2, then usually practices will not lose money on items costing less than £20.

Even with no discount, the £2 fee would at least cover 10% clawback.

Reducing losses

If an item has a price of more than £20 and there is no discount, (as often happens with GNRH analogues), then clawback of hypothetical discount is greater than the fee for supply them. In this situation It may be better to give the patient the prescription to take to a pharmacy and get it dispensed there ready for administration rather than lose money. 

Pharmacists have more generous rules and do not have clawback on many of these costly items.

Prescriptions allocation

Fees received can be increased by allocation of prescriptions. The dispensing fee is still rather oddly based on the items for each practitioner rather the whole practice, which seems antiquated.

Since the higher the number of items attached to each individual the lower the dispensing fee, ensuring a degree of equality of prescription numbers across the whole practice will generate slightly higher fees. 

Prescriptions can be allocated to anyone with their own prescribing number, which includes salaried doctors but not trainees. The maximum fee is for the first 438 prescriptions per month, so try to ensure all prescribers are at least close to this number. 

While medical accountability would advise against randomly transferring prescriptions between doctors, this is not really the case for vaccinations where doctors usually have little clinical input. The flu season would seem an ideal time for such equalising.


Non-dispensing practices can also claim for any dressing they supply or apply to patients but care is needed to ensure practices do not end up out of pocket. 

Unlike PA items, dressings are not automatically free for patients and if a patient normally pays then the practice would be deducted the prescription fee even if they did not charge the patient. This will generally only apply in England. My practice claims only for dressings if we know the patient receives free prescriptions.

Private prescriptions

The rules above apply to the NHS but it would be possible for a non-dispensing practice to supply and charge for providing a private medication. Although this could be done where a large number of patients request anti-malarials for travel, for example, this is likely to be impractical for most practices.


Nearly all dispensing practices are registered for VAT, but non-dispensing and even small dispensing practices may not be. There are usually benefits to profitability by keeping below the VAT threshold but this is an area that may require specialist advice.

Personally administered drugs tips
  • All GPs can claim reimbursement.
  • Non-dispensing GPs receive higher reimbursement than dispensing doctors.
  • Most profitable when claiming for high numbers of low cost medicines,
  • If a medicine costs over £20, the practice may lose money
  • It is important to get the maximum discount available from suppliers.
  • Try to ensure all prescribing GPs can claim for close to 438 items per month.
  • Dr Phipps is a dispensing GP in Lincolnshire

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