Dispensing2008

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Dispensing2008

  1. 1. RPAS CONFERENCE 7 November 2008 Andrew Vickerstaff Practice ManagerAultbea & Gairloch Medical Practice
  2. 2. AGENDA• Dispensing practices – How many, where? – Comparison of demographics, rurality and deprivation with Scottish average• Comparing dispensing practices with community pharmacies – Difference Scotland vs. England – Cost breakdown 2007/08 – Trends per item dispensed• Scottish drug tariff changes
  3. 3. Proportion of Scottish practices that dispense Dispensing practices represent 12% of practices but just 3% of patients in Scotland. Dispensing practices are either small or dispense to just a proportion of their total list.Source: www.isdscotland.org/GPpracs&pops July 2008
  4. 4. Number of Dispensing Doctor practices in each health board area Dispensing practices are situated around the periphery of Scotland, far from the centres of population in the central belt 10 9 11 28 11 2 19 5 3 1 1 5 7 5 13 Total 130 dispensing practices Out of 1,084 Scottish totalSource: www.isdscotland.org/GPpracs&pops July 2008
  5. 5. Dispensing practice contract types Dispensing practices tend to have GMS contracts with their board where dispensing income accrues to the practice.Source: www.isdscotland.org/GPpracs&pops July 2008
  6. 6. Scottish dispensing doctor patient demography Dispensing patients are older on average. The data implies a national average age of 40 years, whereas dispensing patients are on average 43 years old.Source: www.isdscotland.org/GPpracs&pops July 2008
  7. 7. Scottish dispensing doctor patient rurality Dispensing patients are much more likely to live in remote and rural areas of Scotland than for the nation as a whole. 85% of dispensing practice patients live in areas classed as rural.Source: www.isdscotland.org/GPpracs&pops July 2008
  8. 8. Scottish dispensing doctor patient deprivation Dispensing patients are on average very similar in deprivation to the Scotland average. Dispensing patients are much more likely than average to be classified in the middle quintile of deprivation.Source: www.isdscotland.org/GPpracs&pops July 2008 & SIMD 2006 methodology
  9. 9. AGENDA• Dispensing practices – How many, where? – Comparison of demographics, rurality and deprivation with Scottish average• Comparing dispensing practices with community pharmacies – Difference Scotland vs. England – Cost breakdown 2007/08 – Trends per item dispensed• Scottish drug tariff changes
  10. 10. Dispensing practices & community pharmacies – England comparison Dispensing practices are twice as important as a proportion of total NHS dispensing activity south of the border. 3.5m £608m 178k £36mSource: www.isdscotland.org , www.ppa.org.uk data for year to end March 2008
  11. 11. Dispensing practices & community pharmacies – England comparison The difference between pharmacy and dispensing practice costs is less pronounced in England. Overall costs per patient are lower. TOTAL COST PER PATIENT Pharmacy Disp practice £210.00 £204.08 £200.00 £192.30 Total cost per patient per year £190.00 £180.00 £173.29 £171.66 £170.00 £160.00 £150.00 England ScotlandSource: www.isdscotland.org , www.ppa.org.uk data for year to end March 2008
  12. 12. NHS Cost per item of drugs dispensed Dispensing practices dispense items which are on average more than £2 per item cheaper. This difference is growing as the average price per item has reduced over time.Source: www.isdscotland.org , 2008/09 Q1 annualised
  13. 13. Dispensing volume per patient Dispensing practice patients receive an average of 2 items per year more than community pharmacy patients and this difference has remained as total items dispensed has grown.Source: www.isdscotland.org , 2008/09 Q1 annualised
  14. 14. NHS cost per patient of drugs dispensedDispensing practices dispense more drugs but they are cheaper so the drug cost per patient overall isless than community pharmacists and reducing.Source: www.isdscotland.org , 2008/09 Q1 annualised
  15. 15. Dispensing fees per patient servedFees to dispensing practices are higher per patient but have not been growing whereas pharmacistfees have increased to close the gap.Source: www.isdscotland.org data for year to end March 2008
  16. 16. Dispensing fees including VATThe difference in VAT treatment increases the gap per patient significantly between dispensingdoctors and community pharmacies. DISPENSING FEES PER PATIENT INCLUDING VAT £70.00 £60.00 £50.00 £40.00 Community pharmacies Dispensing doctors £30.00 £20.00 £10.00 A D V T d u g n p y a c e s r t ) ( f l i £- 2004/05 2005/06 2006/07 2007/08 2008/09 Q1Source: www.isdscotland.org , 2008/09 Q1 annualised
  17. 17. Breakdown of feesFees structures reflect the difference between the new community pharmacy contract and dispensingdoctor payments (which have not changed since the Red Book). £169.5m TOTAL FEES 2007/08 £10.1m 100% Oxygen & adjustments 90% 80% Minor ailment scheme, methadone, public health svcs, etc. 70% VAT 60% Other Oncost 50% Container allowance Pharmacy only payments 40% Transitional payments Dispensing fees 30% 20% 10% 0% Community Pharmacists Dispensing DoctorsSource: www.isdscotland.org data for year to end March 2008
  18. 18. Total NHS cost per patient servedThe gap is reducing, but dispensing practices are still around £10 more expensive per patient servedper year.Source: www.isdscotland.org , 2008/09 Q1 annualised
  19. 19. Total NHS cost per patient excludingVATTake out VAT, and dispensing doctors are cheaper overall and the gap is widening. TOTAL COST PER PATIENT EXCLUDING VAT £195.00 £190.00 £185.00 Community pharmacies Dispensing doctors £180.00 £175.00 A D V T g n p y a c x e s r t ) ( f . l i £170.00 2004/05 2005/06 2006/07 2007/08 2008/09 Q1Source: www.isdscotland.org , 2008/09 Q1 annualised
  20. 20. AGENDA• Dispensing practices – How many, where? – Comparison of demographics, rurality and deprivation with Scottish average• Comparing dispensing practices with community pharmacies – Difference Scotland vs. England – Cost breakdown 2007/08 – Trends per item dispensed• Scottish drug tariff changes
  21. 21. Introduction of Category MGeneric drug reimbursement prices in Scotland have plummeted since the adoption of Category M in April 2006.Pharmacy transitional payments compensate them for the effect on their income. Dispensing practice contracts inScotland have not changed. Cat M introduced Basket of Category M Products 10,000 9,000 Basket includes: 8,000 Amlodopine 5 & 10mg 7,000 Lisinopril all strengths Omeprazole caps 5 & 10mgPence per pack 6,000 5,000 Simvastatin all strengths 4,000 3,000 2,000 1,000 - 6 7 06 Ju 7 Ju 8 6 7 8 6 7 8 6 Ju 7 7 06 Ju 6 Ju 8 8 6 07 7 08 8 M 6 M 7 M 8 O 6 Ja 6 O 7 Ja 7 O 8 M 6 M 7 M 8 -0 -0 -0 -0 0 -0 0 -0 -0 -0 -0 -0 -0 -0 -0 -0 l- 0 l- 0 l-0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 n- n- n- n- n- n- ov ov ug ug ug ay ay ar ar ar ay ct ct ct pr eb eb ep eb pr pr ep ep ec ec Ju Ja A A A N N A A A D D F F F S S SSource: www.isdscotland.org , AV analysis
  22. 22. Impact of Category M In this example, the adoption of Cat M has led to an almost 90% reduction in reimbursement price for amlodopine 10mg tabs x 28. This is not unusual. The equivalent strength of felodopine is not classed in the same category and its price has remained higher & generally more stable. Impact of Becoming Cat M Felod10mg MR Amlod10mg Cat M 1,400 1,200 Cat M introduced 1,000Pence per pack 800 600 400 200 - 6 7 06 08 07 6 7 8 Ju 6 6 Ju 7 Ju 8 8 6 7 7 8 6 Fe 7 7 8 06 Fe 8 M 6 M 7 O 7 Ja 7 M 8 6 O 6 Ja 6 O 8 M 7 M 8 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 l- 0 0 l- 0 -0 0 l- 0 -0 -0 -0 -0 -0 -0 0 0 -0 -0 -0 n- n- n- n- n- n- b- b- ov ov ay ay ay ug ug ug ar ar ar ct ct ct eb pr ep pr ep pr ep ec ec Ju Ju Ju Ja A A A N N M A A A D D F S S S Source: www.isdscotland.org , AV analysis
  23. 23. Summary of analysisWhat has lead to the perception of “high cost“ and “perverse incentives” of dispensing practices?• Dispensing practices differ from community pharmacies – Patients are older and more remote on average. Patient deprivation is less extreme by standard methods. – Dispense more but cheaper items. – Gap in fees per patient is reducing but payment scales are very different – Reimbursement of VAT makes dispensing practice more expensive overall per patient – Dispensing practices are getting cheaper over time, whereas pharmacy costs continue to grow• Category M has had a huge negative impact on generic drug reimbursement prices & hence dispensary income
  24. 24. Dispensing doctor contract discussionsHow to address the perceived and real cost differences between pharmacies and dispensingpractices.• VAT reimbursement makes dispensing doctors more expensive – NHS gain is HMRC loss if practices forced to register – Big increase in practice administration costs – Practices lose VAT on drug margin• BUT dispensing practices have lost out due to Cat M• What do we want? – Protection from pharmacy encroachment – Income stability• What could we offer? – Investment in patient services – Adopt a dispensing doctor formulary – Take on pharmacy quality and training standards – Provide local pharmacist services without cost duplication

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