Friday, 27 July 2012

How do UK pharmacies get paid

How do pharmacies get paid?

There are three main funding sources for community pharmacy:

  1. PPA/PPD (National)
  2. NHS England (National)
  3. CCG (Local)
  4. Clinics (Private)

The main funding comes from PPA/PPD (Prescription Pricing Authority/Department) - this is payment for services provided under the national NHS Pharmacy contract. This includes:

1) Payment for drugs given out via FP10/NHS Script - this is set out by the Drug Tariff (pharmacies make an extra profit from buying well from suppliers - about 5%). There are certain lines which make us more money such as:

  • Specials (drugs which are not readily available ie. omeprazole solution)
  • Stockings pharmacies get an extra payment for measuring and fitting
  • Bandages
  • High margin drugs like clopidogrel or olanzapine (this changes regularly, like the stock market)
  • Controlled drugs like methadone administration

2) Dispensing, pharmacies get paid approx £1 for every item dispensed, this seems low however, it is estimated that each Rx a pharmacy does generates around £10, this is because pharmacies get an automatic payment as they provide an essential NHS service (dispensing medicines) which amounts to around £40k pa, depending on how many Rx are dispensed per month.

3) MURS - a service pharmacies can provide to patients who have more than 1 drug and have been with them for >3 months - max 400 pa. If the target is reached this amounts to around £10k pa.

4) Minor ailments - pharmacies get £5 every GP referral sheet they get. Profit can also be generated here by buying correctly in respects to the MA tariff price.

Another main source of funding is the CCG which commission services like Health Checks, existing ones include:

5) MDS - blister packaging for elderly / disabled - yearly fee of about £200 per patient, this scheme is currently been dramatically diminished by local authorities.

6) Smoking cessation - pharmacies get around £40 per patient they have.

7) EHC - pharmacies get about £25 for every patient they give it to.

Private services (i.e. not NHS funded)

Pharmacies also provide peripheral services:

8) OTC meds minimal can vary from £200 pd for a little shop to £3000 pd, in a large Boots like pharmacy.

Lastly the services that have a huge potential and can be pushed by a good pharmacist:

9) Care homes - these can be highly profitable, however they are high maintenance

10) Travel Clinic - pharmacies make a very nice margin out of private prescriptions which are generated by these - Rx for Malarone especially.

11) Importing exporting - due to the weak pound and government restrictions, lots of opportunity by high barrier to entry (over £2000 to get a license and get up and running)

12) Commissioned services - you can apply to the CCG, to have your own special service. For instance, if your area has a high prevalence of HIV, if you propose a business plan to the CCG to address the problem you could get funding to offer free HIV tests funded by the local authority.

13) "Renting" out the consultation room to other healthcare workers and micromanaging them - osteopaths, chiropodists, training.

14) Private prescriptions - pharmacies are now embedding private GMC registered doctors into their websites using services such as PharmaDoctor to maximise health care accessibility.

15) Renting medical devices - new UK digital health services such as are revolutionising UK healthcare by offering leasing agreements with patients who want to monitor their health in real time giving them direct feedback in to how their medicines are working and offering advice about how to make them even more effective.

1 comment:

  1. I think you missed a major point, GSL items. Although the majority of sales are going through online retailers and big chain supermarkets there is a significant amount which is going through UK independent pharmacies...