AQO 848/22-27

Mr Danny Donnelly
Alliance Party
East Antrim

Tabled Date: 12/09/2024
Answered On Date: 02/10/2024
Priority Written: No

Question:
To ask the Minister of Health for an update on the support his Department is providing to community pharmacies as a result of the fluctuating prices of medication.

Answer:

The Northern Ireland Drug Tariff, published monthly, details the reimbursement paid to community pharmacy contractors for drugs and appliances dispensed against HSC prescriptions.

Given that prices for reimbursement in the Northern Ireland Drug Tariff are set at the start of the month, if there is significant price instability or price fluctuations in-month for drugs, there is a mechanism to reset the price during the month – this is called the “concessionary price” mechanism.

For example, in August 2024, there were 151 concessionary prices awarded in Northern Ireland.

From April’24, the previous Health Minister determined that all drugs “on concession” would be Zero Discount i.e. discount clawback will not be applied.

In Northern Ireland, unlike other parts of the UK, a special advance is in the pharmacy system for “drugs on concession” in acknowledgement of the volatility of the pharmaceutical supply chain. This has been in place since January 2018 and is currently £3,000 per contractor.

Drug reimbursement in Northern Ireland is not on an item per item basis but rather a target amount of margin or retained purchase profit is adopted such that overall, there will be a level of income associated with the reimbursement of medicines i.e. a cost of drugs plus target margin. This is monitored via the Northern Ireland Ongoing Margin survey which is carried out in parallel by colleagues in Community Pharmacy Northern Ireland and the Business Services Organisation.

I can advise that the levels of margin delivered over the last three years have been significantly above the (previous) minimum threshold of at least £26.5million: with the latest available figure for 22/23 being £37.6m.

In April 2024, my colleague previous Minister Swann agreed to increase this minimum threshold from £26.5m up to £31.5m along with a move towards new processes in 2024/25 to ensure more timely OMS result reporting.