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Adjustment in respect of category M price reduction from August 2017

The adjustment will use the Category M prices listed in the July 2017 NHS Drug Tariff as a baseline. 

Where individual items were given a price concession in the July NHS Drug Tariff by way of a Drug Tariff amendment, the baseline price to be used to calculate the adjustment will be the original price published in the Drug Tariff, not the concession price.

In any month where a Category M item is given a price concession or ‘No Cheaper Stock Obtainable’ (NCSO) status, that item will be ignored in calculating the adjustment.

 In addition, any item which was not in Category M in July 2017 but which was designated at Category M in a subsequent month will also be excluded from the adjustment calculation.

Adjustment Calculation

Step 1 - Calculate pack price percentage difference:

    Formula = (Original price – new price) / new price*100

Step 2 - Calculate prescribed pack adjustment:

    Formula = NIC*percentage difference (NIC calculated using the new price)

Step 3 - Calculate CCG Adjustment:

    Formula = Sum (prescribed pack adjustment per prescriber per CCG)



After publication of the August 2017 Itemised Prescribing Payment (IPP) Report the NHSBSA identified that the adjustment calculation which had been used was inaccurate and the calculated adjustment was incorrectly stated per CCG as being approximately 10.5% lower than it should have been. This was as a result of the formula in step 1 using the original price as the denominator instead of the new price as shown in the adjustment calculation above. To correct this error the remainder of the August adjustment will be added to the September figures. The September 2017 IPP report is therefore likely to report figures that are approximately 21% higher than those reported for August; this will account for the 10.5% shortfall as outlined above, as well as correcting for the missed 10.5% adjustment which should have been applied in August.