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Pharmaceutical Services Negotiating Committee

Drug Tariff Changes 2011/2012 Funding Settlement

Please note the changes relating to methadone payments have now been reviewed and a new system is due to be introduced on 1st April 2013. See this page for further details.


Limited Stability List / products reconstituted from granules    

Additional Item endorsement for droppers and applicators

Purified Water    

Additional Item endorsement for diluents

New payment for split pack dispensing                                       

Calendar Pack Provisions

Broken Bulk Provisions                                                              

Drugs with common pack

Category B                                                                               

Out of Pocket Expenses

July Drug Tariff Changes FAQs

As part of PSNC's ongoing negotiations with the Department of Health (DH), a number of measures have been agreed with the aim of simplifying Drug Tariff reimbursement arrangements in several areas. Although these changes will have no effect on the overall value of the national pharmacy funding package, some of the changes will affect how elements of the funding settlement are delivered to community pharmacy. Any such changes have been agreed with the principles of fairness and funding equitability as a primary concern.

A wide range of provisions laid out in the Drug Tariff as well as those provisions which are not detailed in the Drug Tariff but which have developed over time were reviewed. These provisions range from small to larger more complex issues. The DH and PSNC agreed to implement the changes in two phases – phase one in April and phase two in July

In April 2012, phase one was implemented including:

  • Reimbursement for purified water
  • Payment for droppers and applicators
  • Reimbursement for diluents when not specifically prescribed
  • Payment for oral preparations which require reconstitution from granules or powder and the associated fee which recognises that due to the limited stability of the reconstituted product, contractors may need to dispense additional containers

In July 2012, phase two was implemented:

  • The payment system to reflect the increased cost of dispensing split packs
  • Payments for Methadone oral liquid
  • Out of pocket expenses
  • Broken Bulk
  • Common pack list

Phase 1 changes - April 2012 


Limited Stability list / products reconstituted from granules

Some items used to be recognised as having limited stability status and attracted a Limited Stability fee. However, as of 1st April 2012, the following Drug Tariff changes were implemented:

A. The limited stability fee will no longer be payable where an item has been reconstituted from granules resulting in a liquid with stability of 14 days or less, necessitating dispensing in more than one container.

B. Oral antibacterial, antiviral or antifungal products listed in BNF sections 5.1, 5.2 and 5.3 (except 5.3.1) will be considered under the rules for reconstitution.

When the quantity reconstituted from an original pack or packs is unavoidably greater than the quantity ordered and it has not been possible for the contractor to use the remainder for or towards supplying against another prescription, payment will be calculated from the Basic Price of the preparation and will be based on the nearest pack or number of packs necessary to cover the quantity ordered.

The reimbursement arrangements for items requiring reconstitution remains the same.

FAQ. I have received an FP10 prescription for ’140ml Amoxicillin 125mg/5ml oral suspension’. What quantity will I be reimbursed for dispensing?

Answer: The pharmacy would be reimbursed for dispensing 2 x 100ml.

Explanation: As of 1st April 2012, the limited stability fee has been removed from the Drug Tariff. However, there is an antibiotic rule which means that where the quantity of a drug preparation reconstituted from granules or powder is unavoidably greater than the quantity ordered and it is not possible for the contractor to use the remainder of the reconstituted product to fill another prescription, payment will be based on the nearest pack or number of packs necessary to cover the quantity ordered. This is outlined in full in the Drug Tariff, Part II, Clause 13B.

Under this rule, in the situation described above where the quantity ordered falls between two packs (the Drug Tariff listing is for a 100ml pack size), the contractor can round up to dispense the nearest complete container as it is important for patients on antibiotics to cover the complete course of treatment prescribed.

Reimbursement for dispensing two packs will be automatic under these rules, but, as is usual with Part VIII products, it is good practice to endorse the prescription to declare the total amount dispensed over the pack size used.

Medicines which are recognised as “items requiring reconstitution” are marked in the Drug Tariff with a small black circle next to the drug name.

Additional Item endorsement for droppers and applicators

The consumable allowance (formerly known as container allowance) is paid per prescription for every prescription (except for oxygen prescription) supplied by contractors whether or not a container is supplied. This provision now includes the supply of dropper bottles or separate droppers for prescriptions where the medicine is for administration to or via the ear, eye or nose, or a vaginal applicator for contraceptive gel or cream prescriptions, except where the manufacturer's pack includes one. There is no longer a requirement to endorse prescriptions where a dropper bottle, separate dropper or vaginal applicator has been supplied.

Purified Water

Purified water is no longer reimbursable unless it is specifically listed on a prescription. The only exception will be where it has been determined that the potable water ordinarily available in the area is unsuitable for dispensing purposes, and the contractor has been notified accordingly.

Additional Item endorsement for diluents

Products supplied as powder for injection require a diluent to reconstitute the powder to make it suitable for administration to the patient by injection. Under the Medicines Act 1968, all medicines for parenteral administration, including diluents such as Water for Injection, are currently classified as Prescription Only Medicines (POM) and should only be supplied in accordance with a valid prescription. Whilst there is an exception in the law that enables pharmacies to supply 2ml vials of sterile water for injection without a prescription when engaged in the lawful provision of water for injection for drug treatment, pharmacies are no longer reimbursed for supplying diluents where they have not prescribed

Pharmacies will only be reimbursed by the NHS for supplying diluents where they are prescribed on an NHS prescription. Therefore, where a pharmacy receives a prescription for a dry powder for injection and a diluent is required to support administration, the pharmacist would need to use their professional judgement in contacting the prescriber so that a prescription can be issued for the diluent where the prescriber deems it appropriate. Pharmacy staff cannot endorse the prescription themselves as it will not be accepted for payment.

If a diluent has not been prescribed and is required in an emergency, the pharmacy may contact the prescriber and ask them to request an emergency supply of the item using the usual emergency supply procedures. A range of prescribers, including doctors, dentists, supplementary prescribers and nurse independent prescribers, can now request emergency supplies of POMs.

Note, where a patient is not exempt from paying the prescription charge and both dry powder for injection and diluent has been prescribed on the same prescription form, only one prescription charge should be levied. However, where the diluent is prescribed on a separate prescription form to the dry powder for injection, two prescription charges should be levied. The following letter has been produced to help pharmacists with communicating this change to their GPs, please click here.

NHS Prescription Services have produced some related FAQs which can be viewed here.

Phase 2 Changes - July 2012 

As part of the ongoing Drug Tariff simplification programme, the Phase Two measures were agreed and released on the NHSBSA website on 4th May 2012.  Below, we have outlined further details of these arrangements due  for implementation from 1 July 2012.

For a summarised version of the Drug Tariff changes which could be useful as a pharmacy reference guide, see the June 2012 CPN

New payment system to reflect the increased cost of dispensing split packs

Original pack dispensing ensures that the patient is provided with vital information regarding their medication (by way of a patient information leaflet [PIL]) such as how and when to take their medication safely and possible side effects.  It also ensures that the medication dispensed from the pharmacy has a batch number and expiry date intact.

The new arrangements have been agreed to encourage the increased use of original packs and to reflect the workload involved for contractors in dispensing part packs. Currently, there is no provision for the additional time involved in counting out the correct amount of tablets, “snipping” blisters, selecting a container, supplying a PIL, packaging the medicine and the accuracy checks involved with part pack dispensing.

A number of measures have been introduced to help simplify the dispensing of original packs,

Listed Pack Sizes in Part VIIIA

From 1st July 2012, there will be only one pack size listed for the majority of products in Part VIIIA of the Drug Tariff unless there is a clinical need for a range of quantities e.g. analgesics or the product is classified as a “special container”.

The listed pack size in Part VIIIA has been selected based on commonly prescribed/dispensed quantities, which on most occasions should enable contractors to supply in either the listed pack or multiples of the listed pack for most prescriptions. Contractors should always supply the exact quantity as requested on the prescription in all circumstances (unless the products has special container status or is covered under Clause 13b – Reconstitution of Certain oral Liquids).

A change to the NHS (Pharmaceutical Services) Regulations 2005 (Terms of Service of Pharmacists) will come into effect as of 1st July requiring all pharmacists to supply a manufacturer’s original pack for every prescription where possible. Where the prescribed quantity requires a contractor to split a pack in order to supply the exact quantity   as the quantity prescribed is not available in a manufacturer’s original pack, i.e. odd quantities, then a 10p payment will be made to the contractor to reflect the additional workload involved in dispensing part packs.

For Drug Tariff listed lines endorsement of these prescriptions will not be necessary as payment will be made automatically based on the Drug Tariff listed pack size.

For non-Drug Tariff listed lines "split pack" quantity is determined by the contractor’s endorsement. Where the proprietary product is prescribed, the contractor is paid the NHS list price from the PPRS or statutory PPRS for the pack size endorsed. Where the prescription is written generically, the contractor will need to endorse the pack size and the brand name or the name of the manufacturer or wholesaler from whom the supply was purchased.

The 10p fee has been funded by a reduction in the current container allowance for every item dispensed (this will reduce from 3.24p to 1.24p from 1st July).

Removal of Calendar Pack provisions

The calendar pack provisions will be removed so accurate payment for these items will no longer rely on a contractor’s knowledge of items considered to be calendar packs.   Contractors will now be paid solely for the quantity prescribed on all occasions unless the product is classified as a special container or is covered under Clause 13 (Reconstitution of Certain Oral Liquids). As above, payment of 10p will be made for every occasion where a pack has to be “split”.

Changes to the Broken Bulk provision

The current broken bulk arrangements can result in many claims being left unpaid due to incorrect or incomplete endorsement of prescriptions and claims being made for products which do not fall under the broken bulk provisions. Often, broken bulk claims are made and the surplus quantity has been dispensed within 6 months, particularly for Category A and M products which are commonly prescribed generics.

Whilst the removal of broken bulk provisions for Category A and M products would streamline this process, it has been recognised that there could be occasions where a loss may be incurred if the provision were to be removed completely. Therefore from 1st July, contractors can still claim broken bulk for any category A or M product where the reimbursement price of the smallest pack size listed in the Drug Tariff is equal to or more than £50.

Category A and M products eligible for broken bulk as per current Drug Tariff

Other changes to the Drug Tariff

Part VII of the Drug Tariff - ‘Drugs with Common Pack’

Where one product has multiple pack sizes, payments for these products are made based upon the pack size supplied and endorsed by the contractor. Pre 1st July 2012 where the contractor has not endorsed the pack size used, payment is made by assessing the “Drugs with Common Pack’ list in Part VII of the Drug Tariff provided the product appears on this list. As part of these measures, Part VII “Drugs with Common Pack’ list will be removed from the Drug Tariff.

From 1st July 2012, where multiple pack sizes are listed for a product and the prescription has not been endorsed to indicate which pack size was used to supply the prescription, payment will be made according to the following rules:

  • If a pack size exists for the exact quantity prescribed, payment is made for this pack.
  • If there isn’t a matching pack size to the quantity prescribed then payment is made based on supply from the next largest pack size to the quantity prescribed
  • The current rules for special containers remain unchanged. 

Therefore, contractors should ensure that they endorse any product that is available in multiple pack sizes.

Category B

Category B, which has been unused since 2005, will be removed from the Drug Tariff as of 1st July 2012.

Out of Pocket Expenses (OOP)

Pre 1st July 2012, out of pocket (OOP) expense claims could be made for any drug, appliance or chemical reagent as long as they are not listed in Part VIII Category A and M, Part IXA and Part IXR of the Tariff and are not required to be frequently supplied by the contractor.

From 1 July 2012, OOP claims will no longer be subject to a 10p deduction so contractors will receive payment for the entire amount as long as the claim totals 51p or more.

Specific endorsements will be required for each prescription item where an OOP claim is made. To ensure payment, contractors must endorse “OOP” or “XP” with details of the claim being made (e.g. postage and packaging) along with the total amount being claimed.

Contractors will no longer be required to submit details of these claims on the FP34c submission document as prescriptions with OOP endorsements will be processed by an exceptions claim handler at the NHSBSA. Prescription forms with OOP claims will need to be separated and placed in the red separator before submission. The NHSBSA will send the new red separators to contractors in the usual way. Contractors may still wish to keep a log of all OOP claims for audit purposes.

Reimbursement of charges related to the sourcing of unlicensed medicines (“unlicensed specials and imports”) falls under the Arrangements for payment of specials and imported unlicensed medicines introduced in November 2011 and are included as part of the £20 fixed fee reimbursed against such prescriptions, when endorsed with “SP” or “ED”. Therefore, contractors must not claim OOP for specials or imported medicines.

The Department of Health is also changing the way that PCTs are recharged for OOP. Under the current arrangements, OOP expenses are recharged to PCTs based on the total cost of the drugs prescribed in their area.  From 1st July, individual OOP claims will be recharged to the prescriber’s PCT. This is to increase transparency around payment of these claims and to ensure that each PCT is accountable for the charges associated with prescribing within their locality.


 For further guidance refer to the July Drug Tariff Changes FAQs. Please note that the methadone FAQs are no longer applicable - we are currently updating this document.

Further update from the Department of Health on the July DT Changes can be found on the NHSBSA website.