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The Department of Health and Social Care (DHSC) has introduced new arrangements for the application of discount deduction to community pharmacy payments which will be implemented in six financial quarters beginning in October 2022 and concluding in January 2024. Under the new discount deduction system, the current single scale will be split into three groups: one each for generic medicines, branded medicines, and appliances. Separate fixed deduction rates have been determined for each group. This will provide all pharmacies the same rates of deduction applied to their reimbursement for the three different groups, regardless of the total value of that reimbursement. Fin McCaul, PSNC member and independent community pharmacy contractor, said: "The discount deduction scale has been a point of contention for contractors for many years, and PSNC has long been pushing to remedy this. "The incoming changes are designed to both improve equity of access to margin and manage the distortions presented by branded medicines, which just don't have the same level of discount available as generics.

The Pharmaceutical Services Negotiating Committee (PSNC)'s director of pharmacy funding Mike Dent and Jack Cresswell, its funding strategy manager, will be hosting a webinar about changes to the discount deduction system on Wednesday 12th October at 7.30pm. The discount deduction scale has been a point of contention for community pharmacy contractors for many years, and PSNC has been pushing to remedy this. "The changes will lead to a levelling out for all pharmacies, with the impact on individual contractors varied due to their unique dispensing mix. We have been developing a series of resources about the changes, including an explanatory briefing, FAQs and an impact calculator. Our latest resource comes in the form of a webinar that aims to explain the new arrangements and the transition period in more detail," said PSNC.

The Pharmaceutical Services Negotiating Committee (PSNC) has developed a webtool to help community pharmacy contractors estimate the impact on their payments under the new discount deduction system. The calculator aims to illustrate the changes to discount deduction that a pharmacy could experience during the transition to the new arrangements from October 2022 to January 2024, when the new system will be fully in place. PSNC's calculator requires contractors to input information about their individual pharmacy dispensing mix (i.e. split of reimbursement by appliances, brands and generics) to provide an estimate for the level of impact the new discount deduction system will have. "The impact on individual pharmacies cannot be estimated without using dispensing mix data, meaning that any estimates which do not take this into account will not be reliable," said PSNC. For years many contractors have been frustrated by how discount is applied to their accounts and have often raised concerns about the blanket nature of its application to PSNC.

FreeStyle Libre 3 Sensors and Budesonide 500microgram orodispersible tablets sugar free have been included in the Drugs for which Discount is Not Deducted (DND) list (Part II of the Drug Tariff) from January 2024, according to Community Pharmacy England (CPE). Following applications made by CPE on behalf of pharmacy contractors, the Department of Health and Social Care (DHSC) agreed to give DND status to these products to ensure that "pharmacies are not faced with dispensing these sensors at a loss." Updated monthly by the DHSC, Part II of the Drug Tariff includes grouped and individual items. Recently launched by Abbott Diabetes Care Ltd, FreeStyle Libre 3 Sensors have also been added to the Appliances section in Part IXA of the January 2024 Drug Tariff. As the sensors can only be ordered by pharmacies directly from the manufacturer without any discount, CPE requested the DHSC to exempt this appliance from any discount deduction.