Financial Framework 21/22



Early in 2020, the CPS Board finalised a three-year funding deal, a first for the pharmacy network. This agreement provides stability and predictability for the community pharmacy network, Scottish Government and NHS Health Boards, allowing adequate time and space to develop and embed pharmaceutical care services. This has allowed the negotiating team to work with the Scottish Government to agree on this year's financial package. This package lays out a defined amount of funding (Remuneration) available to allow core services to be provided, which we call the Global Sum as all contractors will benefit from the available “pots”, which we will cover later. The pie chart below will give you an overview of how this year’s entire Global Sum is broken down – we’ll go into more detail on each element later... 


There are some small elements of our national funding that do not fall into the Global Sum - for example, not all contractors will need to take advantage of the arrangements for stoma dispensing and Medicines Complete access are technically contracts in their own right – together we call these “extra bits” the Non-Global Sum

The financial package also describes the arrangements for the Reimbursement element of the annual agreement i.e. the conditions agreed around the funding that comes from buying certain medicines for a bit less than the NHS pays us for them.

Advance Payment

Advance payments are made to support contractor cashflow while actual payment for the prescriptions submitted is calculated. 

When pharmacies submit prescriptions to Practitioner Services, they are fully paid at dispensing month + 3 months (for prescriptions dispensed in January, they are submitted at the start of February and are paid at the start of April). 

The payment date set out in the drug tariff for the example above is the first working day of July, however, Practitioner Services frequently make this payment at or before the last working day in June.

The timelines involved are shown in the following graphic.

Advance Payment Timeline Image

This means that each monthly payment is made up of components from different dispensing months as shown below:

Payment made Recovery of advance from Total due for month Advance for
April (as shown above in graphic) January Prescriptions January Prescriptions February Prescriptions
May February Prescriptions February Prescriptions March Prescriptions
June March Prescriptions March Prescriptions April Prescriptions

To support contractors’ cash flow while the reconciliation happens, an advance payment of 100% of the last 12 month’s average gross total monthly payment is made (in the above example at the end of January). 

Advanced payments for brand new contractors are explained in the payments to new contractors’ section.

Margin Sharing Arrangements

As touched on in the introduction to pharmacy funding, part of a pharmacy’s income is dependent on the money made on part 7 drug tariff medicines they source and provide on prescription – this profit is often referred to as the margin. This incentivises efficient buying, as pharmacies will shop around for the best price for the items they are supplying to get the best deal possible on behalf of the NHS.

To monitor the margin, the Scottish Government has a pricing survey completed to compare the invoice price paid by pharmacies to the price Practitioner Services pay, the difference being the margin earned.  The survey result is used to monitor the total margin across the year and if it’s more than the agreed amount, then 50% of the difference is due back to Health Boards. The ‘generic clawback’ has been the most common approach to return money but this ceased as of April 2020.  It has been agreed that the mechanism to deliver this will be via the reduction to Part 7.  Further income generated above the agreed amount will be moved, “mapped”, to the Global Sum. This will also be delivered via the reduction of Part 7.

The arrangements in circular PCA(P)(2021)5 cover the margin sharing arrangements for 2021/23:

  • The level of guaranteed minimum funding for contractors is £82 million;
  • If market conditions allow, pharmacy contractors can retain all of the first £10m earned above the guaranteed minimum of £82m. This means that contractors have the opportunity to earn up to £92m in retained margin before margin sharing arrangements kick in;
  • Any margin earned above £92m will be shared on a 50:50 basis with NHS Boards;
  • The guaranteed minimum income will have an uplift of 2.5% applied to it in 2022/23, with the same buffer of £10 million.
  • Generic clawback arrangements ceased from April 2020. Any income over the £92 million that should be shared back to the Boards will be enacted by a reduction to Part 7 of the Drug Tariff
  • £65 million will continue to be mapped from Part 7 as guaranteed income. It is agreed that any reduction to the Drug Tariff does not destabilise it and the Scottish Government will determine if future reductions are practical in subsequent years.

Dispensing Pool Arrangements

The Dispensing Pool

A big part of each pharmacy’s workload is the dispensing of prescriptions for people on behalf of the NHS. Whilst the reimbursement element of our financial package covers the cost of the medicines which are bought and used as part of patient care, there needs to be a way of paying (remunerating) the pharmacy for the time and effort which goes into physically making the prescriptions up and ensuring that the medicines prescribed are safe and effective (i.e. the staff, expertise and resources costs).

To do this fairly, each pharmacy gets a proportion of a monthly “dispensing pool” of £10.703m (from 1st April 2021) based on the number of prescriptions and instalments they do. Instalment and “normal” dispensing are both given the same weighting (i.e. each counts as “1”) when adding up a pharmacy’s dispensing activity. Very simply, the principle is that if your pharmacy does 1% of the prescription work carried out across the whole network, you get 1% of the funding pot.

It’s not quite that simple though – if a pharmacy does a lot of dispensing to care homes (over 2.5% of their prescriptions), this attracts a different fee from a separate pot of money to reflect the different types of workload that care home prescriptions bring. We will describe this care home element in more detail further on.

It would be extremely challenging to calculate what percentage of total dispensing a pharmacy has done in a given month during the payment process – it’s impossible to know how many prescriptions have been dispensed across the whole country until the very end of the process. To manage this, the average of the last three months’ activity is calculated for each pharmacy and used as a reference to set the Dispensing Pool payment for each quarter as follows:

Average dispensing taken for months: Sets Dispensing Pool payment for months: Bank payment at month-end:
Sept 20 - Nov 20 Apr 21 – June 21 June 21 – Aug 21
Dec 20 – Feb 21 July 21 – Sept 21 Sept 21 – Nov 21
March 21 – May 21 Oct 21 - Dec 21 Dec 21 – Feb 22
June 21- Aug 21 Jan 22 – Mar 22 Mar 22 – May 22

Establishment Payment

Over the years as the pharmacy contract has changed, different service payments have been joined together into what we now call the Establishment Payment.

This is a monthly payment fixed at £2,268 per month (except for part-time essential small pharmacies) and is made up from the following original payments:

  • Payment Supplement;
  • PHS Payment Core Element;
  • Infrastructure Support Payment;
  • Plus the base level payable previously for the professional allowance (= £575).

This reallocation of payments means that there will be no more mention of the above payments on any of the monthly payment schedules or in any current documentation.

The establishment payment will be scaled for Essential Small Pharmacies (see ESP section) in accordance with the existing provisions for opening hours.

Pharmaceutical Needs Payment

The Pharmaceutical Needs Weighting Payment (PNWP) makes the payment for the additional pharmaceutical needs (and associated workload) from age and deprivation characteristics of the people using the pharmacy.

For each contractor the following has been identified:

  • Proportion of dispensing patients aged 60 or over
  • The percentage of dispensing patients with postcodes in the two most deprived quintiles according to the Scottish Index of Multiple Deprivation (SIMD)

These two factors are combined to produce a combined index for each pharmacy.

For example, a pharmacy may have between 65% and 75% of their patients under 60 years (age index 1.2) and between 60% and 80% of patients with their postcode in the most deprived quintiles (SIMD index 1.4). The combined index is calculated as the average of the 2 so for this pharmacy the combined index is 1.3.

The combined index for every pharmacy across Scotland is calculated and each pharmacy will then receive a proportional share from the PNWP pool which is a monthly pool of £0.320 million (£3.845 million per year)

Age Age Index SIMD SIMD Index
75% or more of patients under 60 years 1.0 40% or less of patients with postcode in the two most deprived quintiles 1.0
Between 65% and 75% of patients under 60 years 1.2 Between 40% and 60% of patients with postcode in the most deprived quintiles 1.2
Between 65% and 75% of patients under 60 years, with more 75+ than 60-74% 1.3 Between 40% and 60% of patients with postcode in the most deprived quintiles, and more in the most deprived quintile 1.3
Between 55% and 65% of patients under 60 years 1.4 Between 60% and 80% of patients with postcode in the most deprived quintiles 1.4
Between 55% and 65% of patients under 60 years, with more 75+ than 60-74% 1.5 Between 60% and 80% of patients with postcode in the most deprived quintiles and more in the most deprived quintile 1.5
Between 45% and 55% of patients under 60 years 1.6 Between 80% and 90% of patients with postcode in the most deprived quintiles 1.6
Between 45% and 55% of patients under 60 years, with more 75+ than 60-74% 1.7 Between 80% and 90% of patients with postcode in the most deprived quintiles and more in the most deprived quintile 1.7
Between 35% and 45% of patients under 60 years 1.8 More than 90% of patients with postcode in the most deprived quintiles 1.8
Less than 35% of patients under 60 years 2.0 More than 90% of patients with postcode in the most deprived quintiles and more in the most deprived quintile 2.0

Contractors added to the pharmaceutical list between 1 April 2021 and 31 March 2022 inclusive will receive a proxy monthly Pharmaceutical Needs Weighting Payment calculated using a combined index of 1.0.

Care Home Element

Care Home dispensing

Dispensing prescriptions for patients who live in care homes brings with it a slightly different workload when compared to dispensing for the greater population. Pharmacies which do a lot of this activity relative to their more “standard” work are recognised for this by being remunerated for it at a different rate in recognition of this. There is a special marker in NHS systems to help identify care home patients, so their prescriptions can be analysed separately from all other dispensing activity – although it is all done at the same time.

For pharmacies that do a little care home dispensing in relation to the rest of their work (less than 2.5% of all dispensing), this is treated in the same way as any other activity and each prescription item will count towards the dispensing pool payment as described earlier. In effect, no action is taken by the pricing department.

For those who dedicate a larger part of their business to fulfilling care home prescriptions (over 2.5% of all dispensing), the prescription items do not count towards their dispensing pool payment. Instead, they are reimbursed from a separate quarterly pool of £1.107m depending on how much activity has been carried out nationally, in exactly the same way as the larger dispensing pool is divided up. The same reference months are also used to set the care home element payments each quarter.

Service Efficiency Payment

The Service Efficiency Payment is for achieving a target level of electronic claiming for prescriptions submitted for pricing by Practitioner Services. 

Existing contractors have a target payment amount and any new contractors added to the Pharmaceutical List from 1st April 2021 will have a target payment of £150 per month.

From 1st April 2021, to receive the payment, contractors must achieve the continuing claim rate of at least 80% for all possible claims, including care home items, instalments and stoma items.

On or above this 80% threshold, the contractor will receive a full payment of their own target SE payment. Below the threshold, contractors will not be eligible for any payment, except in the following circumstances: 

A contractor who wouldn’t otherwise receive a payment for a particular month may request the Health Board to consider failure to achieve the 80% threshold as exceptional and out with the contractor’s control and authorise a special payment. If an application is made, and the Health Board considers that failure to achieve the 80% threshold is out with the contractor’s control, a full or partial payment may be authorised at the discretion of the Health Board. 

Where there are issues locally, for example where a surgery has had network connection issues, contractors should call the ePharmacy helpdesk to make them aware. This can then be considered along with the SE% achieved.

Quality and Service Development

Quality and Service Development supports the operation of a service for coeliac patients and the development of a safety culture.

Every pharmacy that is signed up to provide the Gluten Foods Service (GFFS) to people referred by their GP or dietitian will receive a fixed payment of £100 per month. All contractors in the dispensing month concerned shall receive an activity payment from a fixed funding pot of around £1m.

To support the development of the pharmacy team, empowering them to continually review the safety of their working practices, every pharmacy will receive a fixed payment of £280 per month. This is made available to every pharmacy team that completes that years’ Quality Improvement activities as described in the funding circular from Scottish Government. Specific details of the activities to be completed are released in a separate circular mid-year and are normally focussed on patient safety factors.  Activities from April 2021 to August 2021 will support the implementation and training requirements for NHS Pharmacy First Scotland and Public Health Service – Bridging Contraception. Activities for September 2020 will support the refresh work on Medicines: Care and Review. This will be subject to any changes in policy priorities.

Medicines Care and Review Service

Medicines: Care and Review Service (MCR)

The payments for MCR are made using one of the more complex models in our financial package and is based on the number of people registered for the service (capitation model) at the end of a given month. The funding also requires a bit of a history lesson… 

Our overall funding model as it stands just now (give or take a few tweaks over the years) has been in place since late 2011. It was a massive and complicated job to put in place a new service-based contract whilst making sure that no-one lost out when moving from a contract that relied more heavily on dispensing volume. To achieve this, each pharmacy had a proportion of their “old” funding repurposed to pay for the service. This was more for some pharmacies and less for others depending on their dispensing activity. 

These contribution amounts are still used in calculating MCR payments today. In order to get their full contribution from the £3m MCR funding pool each month, each pharmacy must have a certain number of patients registered for the service and have completed a Stage 1 assessment for each. This number is calculated at the end of each month by counting the number of valid registrations across the whole country and for each individual contractor. Put simply, if the contractor contributed 1% of the funding back in 2011, they need to have completed 1% of the registrations to get their full funding for the month. As the whole calculation is done at once, pharmacies cannot know exactly how many registrations to aim for, but our ready reckoner tool gives as accurate an estimation as is possible. When pharmacies do not manage to register enough people, their monthly funding can be reduced by up to 10%. On the other hand, these underpayments allow other pharmacies the opportunity to earn up to 10% more than their allocated funding if the register more people than expected. 

Any pharmacies which opened after the move from the old contract to the new obviously hadn’t made a contribution to the funding of MCR, so they have a slightly different arrangement to reflect this. They receive a £600 minimum payment to begin with, but have no maximum payment set - so if they do build their business and deliver pharmaceutical care for people with long term conditions to a similar level as their more established counterparts, they are remunerated appropriately. 

A review of M:CR remuneration model will be undertaken to come into effect during year two of the financial settlement.

NHS Pharmacy First Scotland Service

The NHS Pharmacy First Scotland service was launched in 2020 with an annualised pool of £28.300m. The new service will remunerate contractors for making the service available to their communities (Base element) and for the episodes of care provided in line with service (Activity element).

From 1st April 2021, each pharmacy will receive a base payment of £1,250 each month and an activity payment from the activity payment pot of £785k where their activity level is above a specified minimum of 100 interventions per month – with activity being recorded on PMR systems as Advice, Referral or Treatment. 

The level of NHS Pharmacy First Scotland allowance payable to a listed contractor for a particular month will be paid to the contractor listed on the first day of that month.

In light of the delay to the introduction of NHS Pharmacy First Scotland service, Scottish Government will undertake a review of the value of the base payment at October 2021 as part of the three year funding package, the base payment level will decrease with a corresponding increase in the activity payment pot.

Independent Prescribing

NHS Pharmacy First Plus

Circular PCA(P)(2020)16 set out the intention to introduce a combined National Foundation Programme and Independent Prescriber (IP) Career Pathway for community pharmacists. It also described the terms of a pharmacist Independent Prescriber led common clinical conditions service which has become known as NHS Pharmacy First plus.

A monthly fee of £3,000 will be made to the contractor named on the Boards pharmaceutical list at the 1st day of that month for each full month the service is made available in the community pharmacy. Contractors should complete form at Annex A, if they have not previously completed following issue of circular PCA(P)(2020)16. The service should only be made available once the prescribing IP is able to prescribe as an IP on the NHS – this will require a prescriber code and, until such times as a prescribing system is developed to support this service, a prescription pad.

The service provider will complete a self-declaration form to indicate that a pharmacist IP is available to provide this service for a minimum of 25 hours per week, for a minimum of 45 weeks of a rolling year from the date the service starts.

In the event that the service provider is no longer able to meet the service specification, the service provider will inform Practitioner Services Department using the form at Annex B as soon as is reasonably practical, detailing the date from which the service ceased.

Post Registration National Foundation for Newly Qualified Pharmacists

To support the Post Registration National Foundation Programme for Newly Qualified Pharmacists, a monthly fee of £1,000 (£12,000 per annum) will be made available to the contractor named on the pharmaceutical list on the 1st of each month. Payments will be made to contractors monthly for the 12 month period or subject to a change in contractors status of participation.

Further details on participation in the programme will be issued under a separate circular.

Public Health Service

The Public Health Service elements of the National Scottish Contract for 2021/22 are: Public health poster campaigns; Smoking Cessation; Emergency Hormonal Contraception and; Bridging Contraception (Sexual Health).

It has been agreed to maintain the same level of remuneration for the smoking cessation service interventions.

The fees agreed are as follows:


Smoking Cessation Service (Claims submitted via PCR)

Quit attempt event MDS submission Remuneration
Event A
The Community Pharmacy submits the MDS information with confirmed quit date (normally first return appointment)
The MDS information needs to be electronically submitted once the quit-date is confirmed with the client. This determines the date for “Week 1” which then forms the basis of the timelines for the four-week and twelve-week post-quit date follow-ups. £30
A count will be made on the central smoking cessation database of patients for MDS submission for new quit attempts that meet the validation requirements that have not been remunerated.
Event B 
Four-week post-quit date
To be electronically submitted immediately after the four-week post-quit date and not later than six weeks from the confirmed quit-date. £15 
A count will be made on the central smoking cessation database of patients for MDS submission for new quit attempts that meet the validation requirements that have not been remunerated

Event C
12 week post quit date

To be electronically submitted immediately after the twelve-week post-quit date and not later than sixteen weeks from the confirmed quit-date. £35 
A count will be made on the central smoking cessation database of patients for MDS submission for new quit attempts that meet the validation requirements that have not been remunerated

* The patient count will be made at the end of the calendar month.

Sexual Health Service -Provision of Emergency Hormonal Contraception (EHC)

Payment Element Amount How to Claim
Fee per Intervention £30 per intervention where a patient is prescribed and supplied treatment for Emergency Hormonal Contraception UCF scripts will be reimbursed electronically. CPUS scripts should be submitted to PSD for payment.


Bridging Contraception (Sexual Health)

As part of a wider enhanced community pharmacy Sexual Health Service, a new Bridging Contraception service will be introduced from 1 July. A remuneration funding pool (July 2021 – March 2022) of £0.861m will provide a payment of £30 per intervention. Further details on service specification and Directions will be issued under a separate Circular ahead of the scheduled launch.

Unscheduled Care

The repurposing of existing Global Sum monies and utilising an element of the remuneration Global Sum annual uplift, an annualised pool of £2.58 million has been created to recognise the work undertaken in the treatment of unscheduled care. From 1 April 2021 all contractors on the pharmaceutical list on the 1st day of the month will be eligible to receive a base payment of £100 and an associated unscheduled care activity payment derived from a fixed funding pot in the region of £1.1m.

Payments to Essential Small Pharmacies

The total Establishment Payment plus Dispensing Pool Payment plus Pharmaceutical Needs Weighting Payment made to an Essential Small Pharmacy (ESP) each month, are subject to a guarantee minimum target income of £4,180 for full-time contractors.

Where an ESP opens less than 30 hours, the guaranteed proportion of £4,180 is calculated as follows:

Hours Contractor Open % of Single Flat rate Payment
>5</=10 60%
>10</=15 75%
>15</=20 85%
>20</=25 90%
>25</=30 95%
>30 100%

The total of the Establishment Payment plus Dispensing Pool plus Pharmaceutical Needs Weighting Payment to be made to an ESP each month will be calculated as for all other contractors. If the calculated value is less than the level of the guaranteed minimum payment, a top-up – the Essential Small Pharmacy Allowance (ESPA) – of the shortfall will be paid for the month(s) concerned.

Eligibility for the ESP requires a contractor to be included on the register of ESP held by their NHS Board. Contractors taking over an existing ESP must have their continued inclusion in the ESP register approved by the Health Board.

Payments to New Contractors

New contractors will be eligible to receive on a monthly basis:

Establishment payment £2,268
Dispensing Pool Allocation* £750 per month for 3 months.
£750 per month for next quarter or calculated amount due from dispensing pool whichever is the greater.
Thereafter, the calculated amount due from dispensing pool.
Pharmaceutical Needs Payment Amount due for a contractor with a combined index of 1
Medicines: Care and Review Service Capitation Payment Minimum monthly payment of £600
New contractors can exceed the registrations target shown in the MCR ready reckoner and are not restricted to ± 10%
Service Efficiency Payment Target payment of £150 if the Service Efficiency Payment target level is achieved
Quality and Service Development (QSD) Payment 2021/22 QI Activities should be completed to qualify for payments
PHS Payment In line with activity for smoking cessation, EHC and other public health services

* Dispensing Pool payment – special arrangements for contractors recently added to the Pharmaceutical List, and/or with incomplete dispensing history, or whose dispensing pool payment would otherwise fall below a minimum target

A minimum monthly payment of £750 will apply for dispensing months from April 2021 onwards in respect of eligible contractors who were not on the list, or who did not have a predecessor contractor on the list for the relevant prior reference period used when calculating dispensing pool payments. That minimum payment would then remain in place until the contractor has three consecutive months of dispensing activity to be used for the determination of the dispensing pool payment.

However, where a contractor recently added to the list considers that the £750 payment does not fairly reflect their share of overall dispensing activity in the first 3 months of operation, they may make a specific request to ISD within 9 months of the dispensing months concerned for a retrospective adjustment calculation to be carried out. This would establish whether an adjustment calculated by reference to the previous quarter’s dispensing pool would be appropriate. Where the total amount due is less than the £750 already paid no further action will be taken. Where the amount due exceeds £750, an adjustment will be made as soon as practical for the dispensing months concerned and if necessary, as a retrospective payment. This provision is backdated to apply for payments related to dispensing month April 2021 onwards.

For brand new contractors the advance payment will be calculated as follows:

  • Month 1 advance = (no.of days open/31) x £18,000
  • For contractors who opened on the 1st of the month, their month 2 and subsequent advance will be calculated as % of the average payment set for all contractors for that month, taken from the average of the number of actual months which data is available.
  • For contractors who opened after the 1st of the month, their month 2 advance will equal: (no. of days in month/31) x £18,000; month 3 and subsequent advances until a 12 month history is available will be calculated as % of the average payment set for all contractors for that month, taken from the average of the number of actual months which data is available. Once 12 months data is available, the advance will always be calculated using the latest 12 months average payment.


As part of the financial arrangements, from April 2021 contractors will be paid £180 per month as a contribution towards training costs for pharmacy teams.   

Additional Funding

Stoma Service Funding

As well as the Global Sum to pay for pharmaceutical care services, community pharmacy also has access to the Stoma Contract Global Sum to provide this bespoke service to individuals who require it. Community pharmacies who provide stoma products and services to the public should ensure they are signed up to the contract. The Global Sum for the supply of stoma appliances for July 2021 to June 2022 stands at £3.812m and is accessed by other providers of stoma services (e.g. Dispensing Appliance Contractors (DACs)) as well as pharmacies.

Dispensing, customisation and delivery fees are reviewed quarterly and reset within the parameters of the fixed Global Sum. More details can be found in the National Procurement Specification of Requirements, this also contains sign up forms and claim forms for the two elements of the service which must be claimed (i.e. customisation and delivery).

NES Foundation Training Year Funding

The NES Foundation Training Year (FTY) has replaced the Pre-Registration Pharmacist Scheme (PRPS).

Through 21/22 there is funding for 235 FTY places throughout Scotland. This figure covers the cost of training and employing these individuals within the pharmacy network. Any contractor wishing to find out more about the FTY programme should contact NES for details.

Locally Negotiated Services

Just around £20m is spent on locally negotiated services the vast majority of which is spent on substance misuse services (i.e. methadone). Other services which are recognised as additional services locally and are funded accordingly are below:

  • Substance Misuse
  • Residential Home Advice
  • Rota
  • Needle Exchange and related services
  • Collection and Delivery

These services are currently negotiated via local CPHB committees depending on local need. There may be other local services e.g. alcohol brief interventions which are set up locally but paid from non-pharmacy sources of funding.

Palliative Care Funding

The funding that supports the palliative care community pharmacies in every Health Board was added to the Global Sum in 2013/14 and is allocated to each Health Board annually based on historical requirements.


Part 7 Medicines

The Drug Tariff arrangements are different in Scotland from elsewhere in the UK. You may commonly hear in the pharmacy press and on social media reference to ‘Category M’ in relation to drug tariff pricing. Part 7 of the Scottish Drug Tariff is broadly the Scottish equivalent of this mechanism but with some differences to suit our agreed Tariff arrangements.

  • Part 7 is used to set the reimbursement prices of around 850 commonly prescribed medicines.
  • It is the principal price adjustment mechanism to ensure delivery of the retained margin guaranteed as part of the pharmacy funding.
  • It uses information gathered from manufacturers on volumes and prices of products sold plus information from National Services Scotland on dispensing volumes to set prices annually.
  • As prices have to be set in advance, estimated volumes are used which may differ from actual volumes.
  • It is closely monitored by ourselves and the Scottish Government (SG) to ensure that the scheme operates correctly and to identify anomalies. Regular feedback is provided to ISD who manage the Drug Tariff in Scotland and set the prices on behalf of SG.
  • Prescriptions submitted with items contained within part 7 will be paid at the published part 7 price and brand or manufacturer endorsements are ignored.

Shortages and Adjusted Prices

From time-to-time, due to lots of factors, supply issues can arise for part 7 medicines whereby they are unavailable at the drug tariff price.

We receive reports of this from contractors by telephone or through the shortage reporter on our website and we enter into discussions with National Services Scotland on the items being reported.

National Services Scotland use the information we provide along with other sources to verify issues and may agree to a price adjustment meaning the drug tariff price of the item would be changed (likely increased).

Non-Part 7 Medicines

Items not held in part 7 do not have a published tariff price. Contractors should endorse (on paper and electronically using their system) the brand or wholesaler where they purchased the medicine from. Practitioner Services maintain a price list of many brands and manufacturers and if they have an on-file price, this is used for payment. Where an on-file price is not held, a price endorsement from the contractor may be used, or reference made to the dictionary of medicines and devices for a current price.

Generic Clawback (Part 7)

As part of the margin sharing arrangements and overall pharmacy funding agreement, contractors are allowed to retain an agreed level of margin from part 7 medicines.

Any generated income above the agreed sharing point that is due to Boards will be delivered through the agreed mechanism. In addition any generated income above the sharing point due to Boards will be matched as mapped guaranteed income. Both will be delivered by a reduction to Part 7. 

The clawback arrangements ceased from April 2020.

Proprietary Clawback (Non-Part 7)

The pharmacy funding arrangements allow contractors to retain some of the profit earned on part 7 medicines and set out the funding paid out through the global sum. There is no agreement for profit to be retained for non-part 7 medicines and so clawback is enacted using the margins found within the quarterly pricing survey which is talked about in the margin sharing arrangements. Proprietary clawback is applied on a sliding scale where the higher the pound value paid to the contractor for non-part 7 non-Zero discount medicines, the higher the clawback rate. 

Discountable/Zero discount lines

From time-to-time, contractors may be able to achieve discount on some medicines purchased. The opposite is also true and there are a number of medicines where contractors cannot achieve any discount. This list of medicines can be found in Annex A of Part 1 of the Drug Tariff.

Clawback is discussed above, but broadly speaking, there is a mechanism in place so that for lines agreed between Scottish Government and CPS where no discount can be achieved are classified as zero discount (ZD). In practice this means for a part 7 line classed as ZD no generic clawback will be taken and for non-part 7 ZD lines no proprietary clawback will be taken.

Items which are not classified as ZD are considered discountable (and therefore can have clawback applied).

Related Information