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Pharmaceutical Services Negotiating Committee

Structure of Pharmacy Funding

Pharmacy funding under the national framework is comprised of two elements; i) fees and allowances, and ii) retained buying margin.

'Fees and allowances' refers to the payment pharmacies receive for the provision of pharmaceutical services, also commonly referred to as 'Remuneration'. Following the devolvement of the Global Sum in 2010, all fees and alowances are now recharged to PCTs. They consist of the old Global Sum elements covering Item Fees, Establishment Payments, the Repeat Dispensing Annual Payment, Transitional Payments and Additional Fees. They also include Practice Payments including a contribution for provision of auxiliary aids for people eligible under the Disability Discrimination Act 1995 (DDA), payments for the Advanced services and IT payments.

National fees and allowances payments can be further categorised in two ways, i) payment for essential services, and ii) payment for advanced services. Essential services are services which all community pharmacy contractors must provide, advanced services may be provided if the contractor chooses to provide them.

For information on the fees and allowances pharmacies are paid under the terms of the national contract please click the following link.

Pharmacy Fees and Allowances

'Retained buying margin' is the profit community pharmacies are allowed to retain through the cost effective purchasing of prescription items. The national arrangements allow for a minimum of £500m to be delivered to community pharmacies annually in retained buying margin.

For information on the Drug Tariff including Part VIII and Category M please click the following link.

Pharmacy reimbursement and the Drug Tariff

Devolvement of the Global Sum

Prior to 2010 pharmacy funding was either central funding (commonly known as the global sum) or recharged to PCTs. In 2010, all centrally held funding was devolved to PCT level. Please click the following links for information.

Devolvement of the Global Sum

Breakdown of how fees and allowances are funded

How is the Funding Distributed? Payment, Fees and Allowances

Click on the links below for more information on the various sources of funding:

Funding for Essential Services

Including Establishment Payments, Practice Payments, Transitional Payments, the Repeat Dispensing Annual Payment and Fees
Consultation Area


Funding for Advanced Services

Including MUR limits and latest information for New Medicine Service targets



Drug Tariff Category M: How it Works

The Department of Health sets the prices for products in Part VIII Category M of the Drug Tariff based on information received from manufacturers. Prices change quarterly. Download the current price list in this section of the site.



ETP Allowances

Background to the New Contract ETP/IT Allowances.


Pre-registration Training Grant

Background on the Pre-registration Training Grant, how the Grant is processed and claimed


PSNC negotiated a number of measures to support pharmacies that are dispensing low volumes of prescriptions. In addition there have been changes made to the ESPS Scheme:

Arrangements for Low Volume Pharmacies

Essential Small Pharmacy Local Pharmaceutical Services

Topical issues linked to funding

Claiming a top-up payment

Dispensing at a loss

Recent distribution changes by UK Medicine Suppliers

Branded Generics

Breakdown of how fees and allowances are funded

Useful Links

Drug Tariff and Category M

Fees and Allowances

Pharmacy Contract and Services


Back to National Contract Funding section