The Pharmacy Earlier Payment Scheme (PEPS)

Published on: 17th September 2014 | Updated on: 15th March 2022

The Pharmacy Earlier Payment Scheme (PEPS) gave community pharmacies early access to their monthly advance payment for the provision of NHS pharmaceutical services. The scheme is now in the process of ending, with transition arrangements put in place for existing PEPS contractors.

As part of the transition arrangement, pharmacy contractors who are signed up to the PEPS, will receive a one-off payment on 1 November 2021 to bridge the gap between the current PEPS payment timetable and the new early advance payment timetable outlined above. The one-off payment will be set at 92% of the PEPS pharmacy contractor’s payment which the contractor will  have received on 1 October 2021. This one-off payment received on 1 November will be recovered in equal parts over 11 months, i.e. the last recovery will be on 30 September 2022. The 12-month transition period is intended to help ease any cashflow concerns and offer contractors time to review and discuss refinancing options with their banks or other lenders, if required.

Pharmacy contractors signed up to the PEPS are strongly advised to follow the new earlier timetable for advance payment as set out above to claim for November’s prescriptions by submitting FP34Cs using MYS by 5 December 2021 and by dispatching prescription bundles by 5 December 2021. Failure to do so will result in a gap of one month between payments. PEPS pharmacy contractors, who wish to opt out from the transition arrangements outlined above, must notify the NHSBSA by 15 October 2021 by emailing nhsbsa.pepscontractorpayments@nhs.net.

PEPS pharmacy contractors, who choose to opt out of the transition arrangements, should note that they will experience a gap in payment between the last PEPS payment (i.e. made on 1 October 2021 for prescriptions dispensed in October) and the advance payment for prescriptions dispensed in November 2021 paid either on 9 December 2021 (if they follow the new earlier timetable) or 31 December 2021 (if they follow the current payment timetable).

The PSNC Briefing, along with a cashflow model, sets out the implications of these changes, along with the brought forward advances, for PEPS contractors. The documents provide timelines of the transition away from the PEPS payment timetable to help affected contractors to understand when they will see the changes in their payments so they can prepare accordingly.


Early advance payments for all contractors following an end to PEPS

All community pharmacy contractors will have the chance to receive earlier advance payments from November 2021. This agreement came as part of discussions on the Pharmacy Earlier Payment Scheme (PEPS), which the Department of Health and Social Care (DHSC) decided to end following the collapse of Greensill Capital.

The option to receive earlier payments (for prescriptions dispensed from October 2021 onwards) should benefit all contractors, whether or not they had taken advantage of the PEPS. Advance payments will be made approximately 20 days earlier than the current (non-PEPS) payment timetable for contractors who make their monthly FP34C submissions through the Manage Your Service (MYS) portal by the 5th of the month.

PEPS pharmacy contractors should note that the final PEPS payments will be paid on 1st October 2021 and from 1st November, a 12-month transition arrangement has been agreed for existing PEPS pharmacy contractors to transfer over to the new earlier advance payment timetable available to ALL contractors from November 2021.

Further information

Pharmacy Earlier Payment Scheme (PEPS) announcement from DHSC

PSNC news story: Early advance payments for all contractors following an end to PEPS

PSNC Briefing 032/21: New payment arrangements for ALL contractors following end to PEPS

PSNC Briefing: 037/21: PEPS cashflow

Cashflow model: transition from PEPS to Drug Tariff timeline

PSNC also plans to run a contractor webinar to talk through the payment timetable changes coming in from November 2021. Look out for registration details (or a link to the on-demand version) on our webinars page.


Details of the current scheme

Note: The ending of the contract between Taulia and the NHS Business Services Authority (NHSBSA) has been announced.

The Pharmacy Earlier Payment Scheme (PEPS) was first introduced in April 2013. It is a privately financed, voluntary arrangement, as part of a broader initiative by the UK Government, to allow community pharmacies early access to their monthly advance payment for the provision of NHS pharmaceutical services. The voluntary arrangement is financed by Taulia and is facilitated by the NHS Business Services Authority (NHSBSA).

PEPS provides participating contractors with access to their monthly Advance payment up to 60 days earlier than the standard system. The NHSBSA calculates an average estimated early payment based on a pharmacy’s dispensing history over the previous 12 months.  There is one payment date at the beginning of the dispensing month. The contractor’s actual monthly submission is offset against the estimated early payment they receive and this payment reconciled against the actual payment when it is due. It is important that the prescription batches and accompanying FP34C are submitted to the NHSBSA within the normal submission deadlines i.e. by the 5th day of the month following that in which the supply was made.

Recent notices

19th March 2021: New applications for PEPS suspended
Announcing the suspension of any new contractors wishing to join the scheme.

3rd June 2021: Pharmacy Earlier Payment Scheme update
Announcing the ending of the contract between Taulia and the NHSBSA.

26th August 2021: Early advance payments for all contractors following an end to PEPS
PSNC secures an opportunity for ALL contractors to receive an earlier advance payment from November 2021 (for prescriptions dispensed from October 2021), following a decision by DHSC to end the Pharmacy Earlier Payment Scheme.


Further information

NHSBSA’s Pharmacy Earlier Payment Scheme (PEPS) page

Taulia website

For more information on this topic please email info@psnc.org.uk

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