Understanding the Global Sum – Community Pharmacy funding overview

Key points from this webinar:

1. CCGs are responsible for the reimbursement elements of community pharmacy funding and NHS England looks after the £2.592 billion ‘global sum’ which incorporates £800 million of retained ‘buying margin’.
Action – The agreed amount has to be delivered in the year so any practice to reduce the number of volume related fees (e.g. Single Activity Fees, CD fees etc.) should be challenged as they will not result in any perceived ‘savings’ to the NHS overall.
Watch a short video on Community Pharmacy funding in a nutshell.
Download the Community Pharmacy Funding overview graphic here.


2. Category M prices are set using factory gate prices (manufacturer’s selling prices) that are then uplifted to include an element of allowed buying margin for community pharmacy. They don’t include actual wholesaler margin, it is assumed. The £800 million of ‘allowed’ buying margin is monitored solely through the margin survey and so the amount of margin earned by each individual pharmacy is based on averages. This means that actual margin earned is wholly dependent on the mix of products being dispensed i.e. amount of brands vs generics (as brands usually offer little to no or even negative margin) and the negotiated buying prices of these products by each independent pharmacy.
Action – Are you procuring effectively in your business? Do you have a dedicated person in charge of shopping for better deals and negotiating better prices?
Watch a short video about the Payment Timetable.
Download the graphic here.


3. When Category M prices fluctuate it can take 3 months for the effect to be felt on cashflow. If prices are decreased, on the 3rd month following the decrease, contractors will be receiving the balancing payment for the new decreased prices (which could be negative) plus a much lower advance payment as it will be based on the new decreased prices and this should be planned for appropriately.
Action – ensure you plan for these type of fluctuations in your business by ensuring you have sufficient working capital through your bank in advance.

What to do next:

  1. Engage with local practices, PCNs and medicines management  teams on dangers of undermining community pharmacy funding
  2. Signpost them to this funding webinar series to help improve understanding
  3.  Work with them to find alternative cost and time saving solutions e.g. Electronic Repeat Dispensing
  4.  Allocate dedicated staff member to monitor fluctuations in pricing (particularly Cat A products and what Cat C products you are dispensing vs Tariff)