What date's Drug Tariff is applied each month?

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It turns out that the Drug Tariff prices applied for reimbursement for any given month vary. This notebook demonstrates that Category M presentations use the DT price for the month of dispensing, but Category A presentations use the Drug Tariff of the following month. There is not enough data in that month to produce a confident statement about Category C.

The PSNC website explains that:

For proprietary preparations and Part VIIIA products where the price is based on a proprietary product (e.g. most Part VIIIA Category C products*), a price change up to and including the 8th of the month takes effect for prescriptions dispensed in the following month. A price change after the 8th of the month will be applied for reimbursement purposes to prescriptions dispensed one month later.

For example, if the manufacturer’s list price for a proprietary product changed on the 6th of February, the new reimbursement price would apply to prescriptions dispensed in March. If a manufacturer’s list price changed on the 15th February, the new reimbursement price would apply to prescriptions dispensed in April.

And

For non-proprietary or generic products (excluding products in Part VIIIA, Category M) the reimbursement price change takes place one month earlier than proprietary products. For example, if the manufacturer’s list price changed on the 6th of February, the new reimbursement price would apply to prescriptions dispensed in February. If a manufacturer’s list price for a generic drug changed on the 15th February, the new reimbursement price would apply to prescriptions dispensed in March.

And

Part VIIIA Category M includes drugs that are readily available, where the Department of Health and Social Care calculates the reimbursement price based on information submitted by manufacturers.

The prices of Category M products change on a quarterly basis.

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Note 2 to part VIII itself says:

2. Categories A, C and M of the drugs (appearing in Col.4) are as under:

2.1 Category A - Drugs which are readily available. Broken Bulk may be claimed for those products whose smallest pack size has a price greater than or equal to £50, if necessary. The prices listed in this Part of the Drug Tariff are indicative of the prices determined by the Secretary of State for Health. The following pack sizes are considered when calculating Category A prices: • for tablets and capsules, all prescription only medicine pack sizes up to and including 120 unit doses: • for liquids and some creams (including special containers) up to and including 500ml/ 500g. Where a pack size for a product listed in this Part exceeds the quantities stated above, the listed pack size is the only pack size considered when calculating the price. The Secretary of State determines the prices for Category A drugs to be the average of the price calculated for the pack size listed in the Drug Tariff weighted by the following four manufacturers and suppliers; AAH, Alliance Healthcare (Distribution) Ltd, Teva UK and Actavis/Accord on or before the 8th of the month being reimbursed. In the weighted formula, AAH and Alliance Healthcare (Distribution) Ltd prices have a weighting of 2, the prices from the other suppliers have a weighting of one (Either Actavis or Accord’s list price is used in the weighted formula; in circumstances where a product is listed by Actavis and Accord, then Accord’s list price is used in the weighted formula).

2.2 Category C - Drugs which are not readily available as a generic, where the price is based on a particular proprietary product, manufacturer or as the case may be supplier. Endorsement of pack size is required if more than one pack is listed. Broken Bulk may be claimed, if necessary. Where the price of the product is based upon a non-proprietary product the price listed in this Part of the Drug Tariff is indicative of the price determined and in this case the Secretary of State determines the price to be the price listed by the manufacturer or as the case may be supplier on or before the 8th of the month being reimbursed.

2.3 Category M - Drugs which are readily available. Broken Bulk may be claimed for those products whose smallest pack size has a price greater than or equal to £50, if necessary. The Secretary of State determines the price based on information submitted by eligible suppliers participating in Scheme M. The following pack sizes are considered when calculating Category M prices: • for tablets and capsules, all prescription only medicine pack sizes up to and including 120 unit doses; • for liquids and some creams (including special containers) up to and including 500ml/ 500g. Where a pack size for a product listed in this Part exceeds the quantities stated above, the listed pack size is the only pack size considered when calculating the price.

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I've emailed BSA today about this

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Explanation from BSA:

The prices published in the monthly Drug Tariff may not always reflect the prices which are reimbursed to dispensing contractors for that month. The reason being that the Drug Tariff is sent to print on the 15th of the previous month ready for publication on the first of the month the Drug Tariff relates to. For example the February 2019 Drug Tariff is sent to print on the 15th of January 2019 ready for publication on the 1st February 2019.

The price change timetable usually works so that the NHSBSA receives sufficient notice of price changes to include them in the Drug Tariff publication.

Cat M prices are provided by DHSC each quarter and as DHSC are aware of the price change timetable and the printing deadlines the prices are received and incorporated in the Drug Tariff prior to the 15th of the month. For other products in Part VIIIA listed as Cat A and Cat C we may receive notification of a price change after the Drug Tariff has been sent to print but still in accordance with the price change timetable. These price changes are then reflected in the following month’s Drug Tariff. Pharmacies are reimbursed at the price notified to the NHSBSA (after applying the price change timetable) and not at the Drug Tariff price where there is a difference between the two. The Preface of the Drug Tariff states:

While every effort is made to ensure that each monthly publication of the Drug Tariff includes all amendments made by the Secretary of State and the Welsh Ministers to the price applicable to the relevant period, the need to observe printing deadlines sometimes defeats those efforts. Any omitted amendments will be effective from the date on which they came into force, even if publication of the details is unavoidably delayed.

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We'd like to confirm that:

• Reimbursement is based on the month of submission to BSA (not month of dispensing) - for both EPS and paper
• Reimbursement is based on the BSA's internal electronic DT, not the published version, for that month
• For a given month, that internal tariff:
  • Will always match the published DT for Category M
  • For Categories A and C, either matches the DT published in that month or the following month

Our analysis for Oct 2018 data shows approx 38% of Cat A used prices published in the following month's DT. But all of the Cat C prices stayed the same between Oct and November.

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Reimbursement is based on the month of dispensing e.g. Prescriptions dispensed in January will be submitted to the NHSBSA at the beginning of February and processed during February and March. The reimbursement prices are based on those of January.

Reimbursement is based on the prices held on dm+d which reflect the price change timetable and so may not match those prices printed in the Drug Tariff for reasons previously explained. There is no internal Drug Tariff as such. Effective price changes received after the monthly Drug Tariff has gone to print are included in dm+d for the relevant month and will be reflected in the Drug Tariff the next month.

In terms of your analysis 38% of Cat A drugs showing the price change in the following month’s Drug Tariff sounds about right and obviously can fluctuate between months. The Cat C analysis may also be correct as again it depends on the effective date of the price change. There is also the added complication that concession prices are not reflected in the Drug Tariff.

The electronic version of the Drug Tariff is already published on the website but this replicates the paper copy. As explained there is no internal version of the Drug Tariff which can be published.

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Another clarification from BSA:

If a prescription is dispensed in January but is submitted with the April account it will be processed with the April account using April prices. In general prescriptions submitted at the end of a month have been dispensed in that month

To summarise, we think:

• Internally, BSA uses the reimbursement table in DM+D, using the date the month a prescription claim is submitted to BSA
• The publicly available DM+D data is updated weekly, but the date recorded in dm+d is always the first of the month in question
• That means we can never be quite sure which version of the reimbursement data BSA uses, unless we have a copy of dm+d on the precise day that they processed the claims; and know what that date is