How the price change mechanism works

How the price change mechanism works

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REF: Drug Tariff Part VIIIA, Note 2

As prices in the market are constantly changing, there is an agreed mechanism in place to increase and decrease the reimbursement prices for medicines. This is intended to take into account pharmacies having stock of certain products already on their shelves when a price change is first introduced.

PSNC keeps the proprietary and non-proprietary price change mechanisms under close review. Over the years the current agreement has had a neutral effect on pharmacy contractors’ reimbursement given that prices decrease as well as increase from time to time.


Proprietary products

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.

*Part VIIIA Category C includes drugs that are not readily available as a generic. The price is based on a particular proprietary product, manufacturer or sometimes supplier.


Generic products

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.

Part VIIIA Category A includes popular generics, which are readily available. The price is based on a weighted average of the List Prices from 2 wholesalers and 2 generic manufacturers.


Category M products

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

The prices of Category M products change on a quarterly basis. More information on Category M price changes is available in the funding section of the site.


NCSO concessions

Where a product has been granted the NCSO concession, contractors are able to endorse ‘NCSO’ and the details of the product dispensed (manufacturer or brand name, pack size etc) and be paid based on the list price of the endorsed product rather than on the Drug Tariff price. If a price change occurs during a month that NCSO is granted and NCSO is claimed, the price change mechanism, generic or proprietary as appropriate, continues to apply when the reimbursement price of the endorsed product is calculated. Further information can be found in the NCSO and price concession section of our site.



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