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Pharmaceutical Services Negotiating Committee

Discount Not Given

The DNG list, in part II of the Drug Tariff, contains products which are exempt from the discount deduction scale and is updated monthly by the Department of Health. In order to be included on the list one or more of the following criteria must apply:

Schedule 2 or 3 Controlled Drug

HazChem: Product covered by the Chemical (Hazard Information and Packaging for Supply) Regulations 2002. More information on the CHIP Regulations can be found on the Health and Safety Executive Website. Examples of Hazardous Chemicals that will be included on the new list are Lemon Spirit and Lavender BPC which both may be used in the preparation of extemporaneously dispensed products.

Cytotoxic or cytostatic item: Listed in section 8.1 of the BNF

Cold-chain storage item: The products SPC (available here) must state that the product must be stored at 2 - 8°C prior to dispensing. Products which require cold-chain storage after re-constitution in the pharmacy are not eligible for the list.

Unlicensed Specials: which aren’t listed in part VIIIB of the Drug Tariff

The three criteria: products where the following criteria apply

- the manufacturer, AAH and Alliance do not offer a discount
- fewer than 500,000 items per year are dispensed
- average net ingredient cost per item is more than £50

The Net Ingredient Cost (NIC) per item is the average NIC per prescription dispensed and not the list price of the product. As the NIC is based on the quantity of the product dispensed, it is independent of product pack size. For new products, the Department of Health will give consideration to whether the product may in time meet the criteria.

Information on dispensing volume and NIC can be found in the Prescription Cost Analysis (PCA).

The process for making products exempt from discount deduction is now automatic.  The DNG endorsement has been removed from the Drug Tariff and will be ignored upon processing. Items included under the group headings will not be listed individually.

Contractors can check the DNG status of items using the NHS Dictionary of Medicines & Devices.

To make a request for a product to be considered for the list, please contact the PSNC Information Team. We will investigate whether the product meets the new criteria and make an application to the Department of Health for the product to be listed as appropriate.

Frequently Asked Questions

Can I endorse ‘DNG' to claim exemption from discount deduction for unlicensed medicines?

The DNG endorsement is no longer in use as the exemption from discount deduction is now automatic. Any DNG endorsement will be ignored upon processing.

Are appliances eligible to be added to the list?

Made to Measure Elastic Hosiery and Trusses could formerly be found in Zero Discount List A but these products were removed from the Scheme in September 2006. The Department of Health have refused to add appliances to the list for some time and have confirmed that appliances will not be eligible for entry into the list of ‘drugs for which discount is not deducted.'

The Department of Health are currently reviewing the arrangements for the supply of appliances to primary care. A copy of the PSNC response to this consultation can be downloaded by clicking on the link below.

2005 Consultation: DH Proposals on the Reimbursement of Appliances (PDF)

2005 Consultation: PSNC Response (PDF)

In the response, PSNC highlighted the fact that an NHS pharmacy contractor is not contractually obliged to supply appliances that would not normally be supplied in the course of their business. Therefore if a contractor was faced with a loss through dispensing the item, they may choose not to dispense it. 

PSNC strongly believes that where discount is not available when purchasing an appliance, to ensure patient access and care, the product should be exempt from discount deduction.

Are borderline substances eligible to be added to the list?

In order to be exempt from discount deduction products must fall under one of the group headings, or the three criteria. Borderline substances are no longer automatically added to the list, and will need to meet one of these criteria.

If a product is in the list by brand name but the product has been prescribed generically, will the prescription item be exempt from discount deduction?

This depends on whether the product is listed generically in Part VIII of the Drug Tariff or not. If the product is not listed generically in Part VIII of the Drug Tariff, then the prescription will be priced based on the endorsed brand/manufacturer, therefore if that branded product is listed in the list of 'Drugs for which Discount is not Deducted,' the item will be exempt from discount deduction. For example, Revatio 20mg tablets are included in the list as this product meets the '3 criteria'. The generic description for this product (Sildenafil 20mg tablets) is not included in Part VIII of the Drug Tariff, therefore prescriptions for this product will be priced based on the branded product endorsed. As Revatio is included in the list, a prescription for Sildenafil 20mg tablets would therefore also be exempt from discount deduction.

If the prescribed generic product is listed in Part VIII of the Drug Tariff generically, the product will be priced based on the Part VIII listing regardless of what brand has been dispensed. In this scenario, the generic name must also be listed in Part VIII of the Drug Tariff for a generic prescription for the item to be exempt from discount deduction. For example Seroquel 100mg tablets meets the ‘3 criteria' so is included in the list. As this product's generic description (Quetiapine 100mg tablets) can be found in Part VIII of the Drug Tariff, the generic description is also included in the list to ensure prescriptions for this product, whether prescribed generically or by brand name will be exempt from discount deduction. 

Please note that there may be occasions where a particular branded product meets the criteria but the generic equivalent of the product does not. In this case, the generic description would not be included in the list.

How was the criteria for products to be included in the list developed?

The Department of Health published the proposed criteria in their consultation on this issue. The criteria is intended to reflect those classes of product that require special handling by wholesalers and therefore which have additional supply chain costs. Click on the links below to view the Department of Health consultation on this issue and the PSNC Response:

Proposals to simplify the reimbursement arrangements for NHS dispensing contractors: A consultation (PDF)

PSNC Response to Drug Tariff Simplification Consultation (PDF)

DH Summary of Responses to the DT Consultation (PDF)

Can I refuse to dispense a medicine that I do not receive discount in obtaining and which is not on the DNG List?

Pharmacy contractors, through their Terms of Service, are obliged to dispensed all medicines ordered with reasonable promptness, regardless of whether discount is received when obtaining a product (The National Health Service (Pharmaceutical Services) Regulations 2005. Schedule 1; Part 2;5.(2)(b)). 

Pharmacy contractors may decide to only order certain items from their wholesaler when a prescription is presented. In the case of commonly prescribed medicines, contractors will need to balance any decision not to hold stock against any inconvenience to the patient which may lead to that patient considering complaining or using another pharmacy for all of their pharmaceutical needs.

Why is the Becodisks 400mcg Refill pack on the list when the Becodisks 200mcg Refill Pack was removed from the list?

Products are assessed individually. Becodisks 400mcg meets the 'three criteria' whereas becodisks 200mcg has an average NIC of less than £50.

Methotrexate Tablets 10mg are considered cytotoxic but I can't see them listed in the new list. Are they exempt from discount deduction?

Yes, all cytotoxic and cytostatic items listed in Section 8.1 of the BNF are exempt from discount deduction, regardless of whether the prescription has been written by brand or generic name. These products aren't listed individually in the list but can be found under the group heading 'cytotoxic or cytostatic items'.

Do these changes also affect Dispensing Doctors?

No, Dispensing Doctors have a separate discount deduction scale from pharmacy contractors which can be found in Annex G of the GMS Statement of Financial Entitlements. Dispensing doctors do not benefit from the Zero Discount Concession, that is where discount is deducted from a practice, it is deducted for all products regardless of whether discount was received in purchasing the product or not. 

Do the DNG arrangements apply to Wales?



Additions and Deletions Archive

The Additions and Deletions archive provides historical information on additions and deletions to the list since September 2006:

Additions and deletions archive