Drug Tariff Guidance Notes

What is the Drug Tariff?

The title says it all! It's a tariff outlining what will be paid to contractors for NHS services
provided, be they for reimbursement (the cost of the drugs, appliances etc which you have
supplied against an NHS prescription form) or for remuneration (what you are paid as part of
your dispensing contract with your Primary Care Trust e.g. professional fees/allowances etc).
Tell me more!
It's produced monthly by the Pharmaceutical Directorate of the NHSBSA for the Department
of Health and is supplied primarily to pharmacists and doctors surgeries. In a nutshell, it tells
you the rules you should follow when dispensing, the value of the fees and allowance you will
be paid, the drug and appliance prices you will be paid and what's allowed and what's not!
In short, it's a very important document if you know how to use it!

But it's so big and difficult to find things in!

Perhaps, at first glance, the Tariff does appear that way. However, if you break it up into
smaller chunks it should be more palatable! If you use no other part of the Drug Tariff it would
pay you to use the Preface that, as you can tell by the name of it, appears right at the front of
the Tariff. It tells you all of the changes to that month's Tariff excluding actual price changes
(of which more later) and it also tells you in advance of important changes for the next
month's publication. Price changes themselves are highlighted throughout the Drug Tariff by a
triangle symbol - if it's pointing up the price has increased, if down the price has decreased.
What about the rest of the Drug Tariff?
What possibly makes the Drug Tariff slightly off-putting is that it is primarily a legal document,
split into 20 Parts (some of which are subdivided) which are identified in roman numerals. All
of those parts will give you Dispensing rules Reimbursement rules Prices Allowed/not
allowed.
Where will I find the dispensing rules?
In Parts I and II you will find

Definitions
The endorsements needed to enable us to pay you correctly
When to send your prescriptions in to us

Tell me again how "my payment" is calculated.

You will be paid the total sum each month for the products and services supplied as part of
your NHS contract. It can differ slightly, depending on the type of dispensing contractor you
are.
Drug Tariff (Pharmacists)

Basic Price (Part II, Clause 8)

Deduction Scale (Part V)
Container Allowance (Part IV)
Professional Fees (Part IIIA)
Additional Fees (Part IIIA)
Out of pocket expenses (Part II, Clause 12)
Drugs for which discount is not deducted (Part II)
Payments for Advanced Services (Part VIC)

Under the new pharmacy contract pharmacists may be eligible to claim the following
payments:

Establishment Payment (Part VIA)

Protected Professional Allowance Payment (Part VIA)
Practice Payment (Part VIA)
Repeat Dispensing (Part VIA)
Transitional Payment (Part VIA)
Electronic Transmission of Prescriptions Allowances (Part VIA)

Statement of Financial Entitlement (SFE) (Dispensing Doctors)

Some medical practitioners are authorised or required to provide dispensing services to

specific patients as part of their duties. Where drugs and appliances are provided by a
Dispensing Doctor reimbursement and remuneration is based on the Statement of Financial
Entitlements paragraph 17. The amounts payable in relation to the provision of drugs and
appliances are calculated using the following information:

Basic Price (Part II, Clause 8, 10, 11, 13 & Part VII)
Discount Scale (3.17 - 11.18%) (SFE, Annex G, Part 1)
VAT Allowance (SFE, Paragraph 17.3 (c))
Dispensing Fees (SFE, Annex G, Part 2)
Out of pocket expenses (Part II, Clause 12)

The following document has been produced to act as guidance for dispensing practices on
what endorsements are required for reimbursement:
Dispensing Endorsement Guidance for Dispensing Practices
Drug Tariff (Appliance Contractors)

Basic Price (Part IX)

On-Cost (Part VIB)
Professional Fees (Part IIIB)
Out of pocket expenses (Part II, Clause 12)

I'd like to know more about Part VIII

Part VIII contains a range of generic items and pack sizes which have been agreed by the
Department of Health and Pharmaceutical Services Negotiating Committee (PSNC). The
function of Part VIII is to provide a basic price for popular drugs so pharmacists, doctors and
PCT's can easily see the reimbursement price for a particular product. This helps doctors and
PCT's to plan and control their NHS budgets as well as reducing the requirement to endorse
for pharmacists.
There are five categories used to identify the different calculation methods applied to the
basis price of drugs
Category A - Drugs which are readily available where the reimbursement price is calculated
from a basket list of suppliers.
Category B - Drugs where their usage has decline over time.
Category C - Drugs where the price is based on a particular brand or supplier.
Category E - Extemporaneously prepared items.
Category M - Drugs which are readily available where the reimbursement price is calculated
by the Department of Health based on information submitted by manufacturers.
If a drug is included in Part VIII the price shown will be used for reimbursement regardless of
what a pharmacist has dispensed to meet the order. The only exception to this rule is when a
shortage of a Part VIII generic has been identified by the Department of Health and a no
cheaper stock obtainable (NCSO) status has been granted. In this situation if a pharmacist
has to pay a higher price for the item he can endorse NCSO and the supplier to receive a
payment based on what he has supplied. For more information follow the link to NCSO
Endorsements.

Appliances - So what about Part IX?

The only appliances and chemical reagents which can be prescribed and dispensed under
the NHS are those listed in Part IX of the Drug Tariff. Part IX is actually split into 4 separate
sections
Part IXA - This is an alphabetical list of appliances which are allowed to be prescribed (e.g.
atomisers, hypodermic equipment, pessaries etc) and dressings (e.g. bandages, gauzes,
wound management dressings etc). All items included in Part IXA will be listed in the Index at
the back of the Drug Tariff. Part IXB - This is a list of incontinence appliances that are allowed
to be prescribed. At the front of Part IXB you will find an index of component headings and
each section thereafter is listed alphabetically by manufacturer name. Part IXC - This is a list
of stoma appliances that are allowed to be prescribed. The format of this section follows the
same pattern as Part IXB. Part IXR - This is a list of the only chemical reagents that are
allowed to be prescribed. A sentence at the beginning of this section explains the order the
products are listed in. You will also find them listed by brand name in the Index at the back of
the Drug Tariff.
The rule of thumb is - if it's not in Part IX you won't be reimbursed if you dispense it!
Where else in the Tariff will I find what's allowed and what's not?
Dental Prescribing, Part XVIIA - This List tells you what a dentist can prescribe on Form FP10
(D). Dentists can order for their NHS patients only those items on this list including, in
England and Wales, their proprietary equivalents (providing of course that the equivalent is
not listed in Schedule 1, see Part XVIIIA). Pharmacists need to take care as some of the
entries on the dental list detail a specific strength of a preparation and any other strength
would be disallowed for payment.
Nurse Prescribing, Part XVIIB(i) and (ii) provides information covering prescribing by nurses
on an FP10 P form. There are three different categories used to identify nurses who are
eligible to prescribe medicines :

Community Practitioner Nurse Prescriber (formerly know as Health Visitors and

District Nurses).
Nurse Independent Prescribers (formerly know as Extended Formulary Nurse
Prescribers).
Supplementary Nurse Prescriber

A Community Practitioner Nurse Prescriber can only prescribe from the list published in Part
XVIIB(i) and Part IX of the Drug Tariff. A Nurse independent prescriber is not limited to a
specific list however Part XVIIB(ii) sets out the framework for Nurse Independent Prescribing.
They can prescribe any licensed medicine, appliance or borderline substance subject to the
same restrictions as a doctor within their own level of professional competence and expertise.
The only exception is for controlled drugs, where there is a limited list of drugs published in
Part XVIIB(ii) which can only be prescribed for the medical conditions indicated.
Supplementary prescribing is a voluntary prescribing partnership between an independent
prescriber and a supplementary prescriber, to implement an agreed patient -specific clinical
management plan with the patients' agreement. Provided medicines are prescribable by the
independent prescriber at the NHS expense and that they are referred to in the patient's
clinical management plan, they may be prescribed by a supplementary prescriber.
Part XVIIIA reproduces Schedule 1 to the NHS (General Medical Services Contracts)
(Prescription of Drugs etc.) Regulations 2004. In 1985 the Government issued a list of
preparations which would no longer be prescribable on NHS prescriptions. To compile the list,
the Government looked at several therapeutic groups and then assessed the products in
these groups to see if there seemed to be duplication or products that were too expensive,
not necessary, or which had no medicinal use. The up to date version of the list can be found

towards the back of the Drug Tariff in Part XVIIIA. It is vitally important to check items in the
current month's tariff. If a pharmacist dispenses an item in Part XVIIIA they will not receive a
payment and they will be in breach of their 'Terms of Service', likewise a doctor cannot
prescribe an item that appears in Part XVIIIA of the Drug Tariff and will also be in breach of
their 'Terms of Service'. Contractors may, however, be able to dispense a Schedule 1item if
the doctor has ordered it by an "approved name" i.e. a generic item with a monograph in a
recognised formulary (BP, BAN etc) so long as the "approved name" is not included in Part
XVIIIA. If the "approved name" is also listed in Part VIII then, of course, the reimbursement
will be based on the Part VIII entry.
Selected List Scheme, Part XVIIIB reproduces Schedule 2 to the NHS (General Medical
Services Contracts) (Prescription of Drugs etc.) Regulations 2004. This is a list of items that
have been agreed by the Department of Health as being part of the Selected List Scheme
(more usually described as "SLS"). These items must meet the criteria listed in Part XVIIIB
before they can be prescribed under the NHS. By marking the prescription 'SLS' the doctor is
indicating that he is prescribing for a person listed in column 2 to treat the condition listed in
column 3.
These drugs are not allowed for any other patient or purpose. (You need to be aware that
SLS also applies to vacuum pumps and constrictor rings see Part IXA)
Are there any other sections of the Drug Tariff that are important to me?
Yes! Part XVI sets out how the prescription charge system works and gives many examples of
how many prescription charges are applicable to different types of items and even how many
charges are applicable to different combinations of items. Of course, it would be very difficult
to make this a fully comprehensive list therefore Part XVI has been split into different subheadings, each of which should, hopefully, cover most eventualities. Remember that you
could lose out financially if you ask the patient for the wrong amount of money relating to
his/her prescription charges. And then there's Part II, Clause 10 - this is the Clause that tells
you what quantities you should supply, especially in relation to calendar packs (Clause 10C)
and special containers (Clause 10B)

Calendar Packs - There are two reimbursement options - either supply to the nearest
calendar/sub-pack or supply the exact quantity ordered. If the latter, clearly endorse
that this is what you've supplied.
Special Containers - These are packs that it would not be practical to split therefore
you need to supply the nearest number of complete packs to the quantity ordered.

By using your Drug Tariff regularly you will begin to find that it's not quite so unfriendly as it
might first appear. By not using the Drug Tariff there is a possibility that you could lose out on
some payment you're entitled to. To coin a phrase "Use it, don't lose it!"
NCSO
Drug Tariff Part II Clause 9 C refers to where there are no Part VIII preparations available to
contractors at the appropriate price. Please follow the link to the NHSBSA website page on
NCSO endorsements for further background and up to date information regarding NCSO.
Useful Links
Department of Health
Pharmaceutical Services Negotiating Committee (PSNC)