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Pharmaceutical Services Negotiating Committee

Devolved Global Sum

From 1st April 2010 the remaining centrally held budget for pharmacy funding, known as the Global Sum, was devolved from the Department of Health to PCTs. PSNC secured agreement from the Department of Health (DH) that this funding will be protected while new funding arrangements are developed.

Breakdown of how pharmacy fees and allowances are funded following devolvement

DH has introduced a set of measures designed to safeguard this funding which apply from April 2010. They include a revised advance payment arrangement and the opportunity for contractors to claim protection for lost fees and allowances resulting from changes in the period of treatment. In addition the adverse consequences of increasing prescription duration have been made clear to PCTs and SHAs by Bob Alexander, NHS Director of Finance. In his letter to PCTs Mr Alexander says:

“During this period, there is a need for PCTs to avoid taking unilateral action that produces shocks in the system, for example, PCTs seeking to increase prescription duration in an effort to reduce fees paid to pharmacies and appliance contractors in the short term. This is a false economy. It could lead to many significant and serious adverse consequences, not just for the PCTs taking such action, but across the system for patients, service providers and other PCTs, through widespread shortages of medicines, increased waste medicines, and thus wasted resources, and destabilisation of the pharmaceutical service. Ultimately, since the overall funding agreed nationally must be paid, such action would trigger severe corrective measures, including increased fees and financial penalties.”

Triggering Protection Measures 

The temporary protection measures need to be triggered in a timely manner by affected contractors so contractors are encouraged to monitor their business closely during 2010/11.

If prescription duration has increased significantly in a month then the contractor will have dispensed more medicines than usual and their 80% advance from NHS Prescription Services may not be sufficient to cover the increased wholesaler bill. In this case contractors can claim an extra advance to cover the increased supplier payment. This claim will need to be substantiated with evidence and will contain a declaration from the contractor that increased prescription duration is the cause of the increased wholesaler bill. The extra advance will be recovered in the usual way in the following month.

In subsequent months contractors may see a reduction in items and consequently fee income. Affected contractors may make a claim for lost fee income and will be paid on the volume of items for the same month in the previous year, but at the current year’s rates for fees and allowances. Again a declaration will be required from the contractor that increased prescription duration is the cause of the reduction in items.

Claims falling outside conditions agreed by PSNC and DH will be subject to joint verification by the contractor’s PCT and LPC, subject to contractor agreement on LPC involvement.

Full details of these arrangements are set out in the Drug Tariff Part XIVC.

The Department of Health's guidance regarding the protection of the Global Sum and the safeguarding of pharmacy contractor funding is available on the NHS Prescription Services website. They have also published the forms which contractors can use to claim for funding if the changes lead to increased wholesaler/supplier expenditure in a particular month, or if the changes lead to them experiencing a drop in remuneration / fee levels.


What is the Global Sum?

The Global Sum was the centrally held funding for the provision of pharmaceutical services, such as dispensing fees. From 1 April 2010 it is no longer held centrally by DH. It is worth £1.1 billion.

What does devolving the Global Sum mean?

In line with policy to devolve centrally held funds to PCTs, the DH devolved the Global Sum to PCTs on 1 April 2010. It brings pharmacy funding in line with other funding streams, e.g. general practice dispensing doctors, dentists and ophthalmic services. By devolving the global sum, the PCT will fund all prescribing and dispensing costs. It significantly increases the funding held by PCTs dependent on prescription volume.

What significance does this have for me as a pharmacy contractor?

As outlined above, all the funding for the Community Pharmacy Contractual Framework (CPCF) now sits with the PCT. However, total core funding to be paid for the CPCF will continue to be set at a national level. Fees and allowances are set out in the Drug Tariff and contractors will continue to submit monthly returns to NHSBSA, who will make payments to contractors.

Alongside devolving the Global Sum, the way in which a PCT is recharged for the services provided has changed. Each PCT is recharged the Establishment payment for each pharmacy located in its area, the professional fees relating to prescription items directly attributable to its prescribers and others costs that are fair shared in proportion to the professional fees directly attributable to its prescribers.

The temporary safeguarding measures are available to those contractors providing pharmaceutical services under the CPCF. Those contractors operating under a Local Pharmaceutical Services (LPS) contract, excluding Essential Small Pharmacy Local Pharmaceutical Services (ESPLPS), will need to contact their PCT to discuss the terms and conditions of their contract.  

May I make a claim for extra funding for any other reason apart from the duration of prescriptions having increased, e.g. a new GP surgery has opened in my area?

No. This payment mechanism is being put in place to provide temporary support to contractors following the devolving of the Global Sum. When making a claim, it is necessary for the contractor to sign the claim, declaring that there is no other reason for the increase in supplier bill. Where it is discovered that a contractor has made a false claim, there is a possibility the issue will be passed to NHS Counter Fraud Services for investigation.

May I make a claim for extra remuneration for any other reason apart a significant drop in fees earned following an increase in duration of prescriptions, e.g. a new pharmacy has opened in my area?

No. This payment mechanism is being put in place to safeguard contractors following the devolution of the Global Sum. When making a claim, it is necessary for the contractor to sign the claim, declaring that there is no other reason for the decease in fees earned. Where it is discovered that a contractor has made a false claim, there is a possibility the issue will be passed to NHS Counter Fraud Services for investigation.

Will my PCT be informed that I am making a claim?

Yes. Although, permission will not typically be sought from the PCT before the payment is made. However, there may be situations where a claim will fall outside of the conditions agreed by DH and PSNC, e.g. if no evidence is provided for the claim. In these instances, the claim will be subject to joint verification by the PCT and the contractor's Local Pharmaceutical Committee (LPC), subject to agreement with the contractor on LPC involvement.

Where is the money coming from to pay this?

Reimbursement claims result in an increased advanced payment, paid for the cost of products dispensed during the month but before prescriptions have been fully processed and accurate reimbursement is known. Advanced payments are not attributed to any specific PCT, however, in the following month when prescriptions have been processed and the accurate amount that should be paid is known, the prescribing costs are attributed to the prescribing PCT .

Remuneration claims will be recharged to the PCT of the contractor and will be reflected in the Itemised Prescribing Payment (IPP) report for the month's dispensing. It will be reported as "other payments charged to the PCT".

The £30 "amendment allowance" payable to contractors who have made at least one claim per quarter will also be recharged to the PCT of the contractor.

I am on the border and my PCT has not instigated this change - why should they pay for what other PCTs have implemented?

Due to the complexity of NHSBSA Information Systems, the prescribing and dispensing data are summarised in different databases. Therefore, it is difficult to link back and attribute the contractor payments to individual practices and PCTs where these are not based on individual prescriptions. However, where a PCT is being recharged payments to their contractors for changes implemented by other PCTs, they may wish to seek redress from the PCT who has implemented the action.

How long will these measures be in place?

It is intended that these measures are temporary. DH, PSNC and NHS Employers have agreed to review the payment structure of community pharmacy services to reduce the dependency on prescription volume.