Question to the Department of Health and Social Care:

To ask the Secretary of State for Health and Social Care, what assessment he has made of the financial impact on community pharmacies of the current reimbursement and price cap arrangements for prescription medicines; and if he will review cases where pharmacies are required to dispense medicines at a loss because the reimbursement price paid by the NHS is lower than the acquisition cost charged by pharmaceutical suppliers.

With regards to the Drug Tariff reimbursement prices, the community pharmacy reimbursement arrangements do not guarantee that every contractor will be paid the cost of every item, however, concessionary prices mitigate losses for individual products, while medicine margin arrangements ensure contractors are paid more than their overall purchasing costs.

Where the market price of a medicine suddenly increases, concessionary prices can be granted in that month, increasing the reimbursement price above the published Drug Tariff reimbursement price. This arrangement helps to ensure that pharmacy contractors can continue to obtain sufficient stock for their patients. In addition, we introduced a ‘retrospective top-up payment for concessionary prices’, which provides an additional payment to contractors when the margin survey indicates that despite a concessionary price, there was an under payment for a specific product.

Medicine margin is the difference between the reimbursement price and the price the pharmacy was charged by the supplier. As part of the Community Pharmacy Contractual Framework 2026/27, pharmacies can retain £1.1 billion as medicine margin to contribute to their payment for pharmaceutical service provision. The Department assesses the medicine margin retained by pharmacies across purchases through a quarterly survey. These arrangements ensure that pharmacies are paid above what it cost them to purchase medicines and the allowed amount of medicine margin to contribute to their payment for pharmaceutical service provision.