A short, dated read on the Drug Tariff, contract and QOF changes that move a dispensing practice's income. This is general information, not advice. Confirm current figures against the primary source before acting.
DHSC issued a fifth update to the May 2026 price concession list on 8 June, increasing two prices for the May dispensing month, a week after the final update had set the month's total at a record 230 concessions. Why it matters: May reimbursement is not settled until these late revisions land, so reconcile May concession lines against the final published list before chasing apparent losses.
DHSC has issued a Tier 2 Medicine Supply Notification for rivastigmine 4.6mg/24hours and 9.5mg/24hours transdermal patches, with limited supply expected until late September 2026. Why it matters: a months-long shortage on two common dementia patch strengths usually pushes buy-in prices above tariff, and shortage lines like these are the usual route onto the concession list.
CPE confirmed that 10 lines, including atorvastatin 60mg tablets (28) at £4.37, rivaroxaban 15mg (28) at £1.03 and ticagrelor 90mg (56) at £4.18, rolled over from May into June. Roll-over applies to late-month requests where DHSC had already agreed the price, and rolled-over prices can still be revised upwards mid-month. Why it matters: a rolled-over price is not a settled price. Check the live concession list before pricing these lines for June, or risk dispensing below cost.
DHSC granted 230 price concessions for the May dispensing month, the highest monthly total on record and the third record-breaking month in a row after March (201) and April (204). CPE linked the run to mounting instability in the medicines supply chain. Why it matters: each concession lifts reimbursement above the base tariff, but only for that month, so a line only stays profitable if your buy-in stays below the concession price.
The 2026/27 community pharmacy settlement, published 29 May, takes total funding to £3.636bn and raises the guaranteed retained medicine margin by £200m to £1.1bn. It also writes off historic margin over-delivery (up to about £239m) and ends recovery of that over-delivery for the year, removing the threat of further Category M clawback. Why it matters: the margin pool is delivered through Category M Drug Tariff prices, the same prices dispensing practices are reimbursed at, so the change feeds through to dispensing margin too.
NHSBSA lists seven active SSPs in early June: ramipril 1.25mg capsules (to 24 July), Estradot 25, 50, 75 and 100 microgram HRT patches (to 10 July) and Creon 10000 and 25000 capsules (to 10 July). Under an SSP, dispensers are reimbursed for the quantity actually supplied and must endorse correctly to be paid. Why it matters: SSP lines need careful endorsement, and the shortages behind them are exactly what drives the concession spikes.
The June 2026 Tariff cut budesonide 3mg gastro-resistant capsules from £75.05 to £60.00 and raised naproxen 250mg/5ml oral suspension from £45.00 to £90.09, deleted eight products and added new lines such as valaciclovir 1g tablets and tranexamic acid 1g granules. Why it matters: each reset changes the margin on every affected line you stock, in both directions, the moment the new Tariff takes effect.
CPE confirmed 9 further products gain DND status from 1 June, including Viagra 25mg, Inspra 50mg and glucosamine sulfate 500mg tablets, taking the cumulative total to 810 products since 2019. DND items carry no discount deduction for community pharmacies. Why it matters: the read-across is indirect: dispensing doctors operate under separate discount arrangements, and the concession DND protection does not extend to them at all (see 24 Feb below).
Authorised dispensing practices can join the DSQS for an extra per-registered-dispensing-patient payment in 2026/27. Sign-up is annual via the local ICB and requires SOPs reviewed at least yearly, a completed and re-audited clinical audit, a significant-event procedure and a DRUM covering 10% of the dispensing list. Why it matters: it is opt-in income that is easy to leave on the table, and the payment is based on the dispensing patient count on 1 January.
DHSC granted 204 concessions for April, with several improved prices added mid-month so stock could be sourced at sustainable cost, including apixaban 5mg (56) raised to £5.48 and ramipril 1.25mg (28) to £4.20. Why it matters: concessions are revised repeatedly within a month, so the price you price against on day one is often not the final figure.
A Pharmaceutical Journal analysis explained that concessions flag generics that cannot be bought at the Tariff price, acting as a live shortage indicator. March saw six co-codamol lines conceded with up to a 56% reimbursement rise, while propantheline 15mg jumped from £20.74 to £97.52. Why it matters: for a dispensary the concession is the difference between a loss and a fair margin, since the NHS only reimburses the uplift in the month it is granted.
The April Category M reprice covered 619 products, with at least 90 falling by 20p or more, including dapagliflozin 5mg and 10mg, metformin MR, all four rivaroxaban strengths and the three sitagliptin strengths, even though the round carried a £20m per quarter upward margin adjustment. Why it matters: Category M sets NHS reimbursement, so these cuts lower the price you are paid on affected generics from the day they take effect.
The DDA reports that from 1 April 2026 the dispensing fee scale reduced by an average of 2.85%, or 6.33p per item, versus the October 2025 scale, reversing the autumn uplift. Why it matters: the fee per item is the core dispensing income stream, paid on a banded volume scale, and this kind of mid-year "yo-yo" lands straight on the bottom line just as staff costs rise.
From 1 March 2026, Cencora Alliance Healthcare UK became the only wholesaler able to supply selected products from the Dansac and Hollister stoma, ostomy and continence portfolios across Great Britain. Why it matters: dispensing practices must source those lines through Alliance rather than AAH or PSUK, which narrows sourcing choice and can reduce the scope for competitive discount on the affected products.
The March 2026 Tariff published prices for the first 11 multi-source products moving from Category C to the new Category H, with 6 rising and 5 falling. Category H prices are set by DHSC from suppliers' sales data and update quarterly (March, June, September, December). Why it matters: a new pricing basis on lagged market data means early volatility and another moving part to track as the list grows.
The discount deduction scale remains the three fixed rates introduced in October 2022: 20% on generics, 5% on branded products and 9.85% on appliances. The Discount Not Deducted protection given to concession items covers community pharmacy only. Why it matters: dispensing practices are excluded and still pay full clawback on concession lines, a gap the DDA estimates at up to £40,000 per practice a year.
The 2026/27 GP contract carried a £485m uplift and raised the global sum to £130.07 per weighted patient (about 5.5% once the 3.5% pay uplift was applied), but was imposed rather than negotiated and rejected by 98.9% of GPs who voted. Why it matters: dispensing reimbursement and fees flow separately via the Drug Tariff, so the core contract uplift does not change dispensing rates directly. Modelling both together is exactly what the tailored report does.
Phoenix Healthcare Distribution selected RELEX Solutions for AI-driven forecasting and replenishment across its 12 national distribution centres, which serve more than 7,100 pharmacies and dispensing practices. Phoenix is the parent of the PSUK brand. Why it matters: better wholesaler availability would reduce the out-of-stock scrambles that push practices onto more expensive sourcing.
The medicines margin survey found about £158m of over-delivery to end June 2025, triggering a £16.8m per quarter margin reduction from January. The reprice cut 490 Category M lines (16 by more than 40%) and raised 189, with generic dapagliflozin driving roughly £12m of the underlying price movement. Why it matters: this is the baseline against which the later April 2026 margin uplift should be read, and it cut the price paid on many high-volume generics.
DHSC confirmed the 2026 payment percentage for newer branded medicines under VPAG falls to 14.5%, down by more than a third from 22.9% in 2025, with a 1% investment contribution on top (an effective 15.5%). The change follows a UK-US deal capping the newer-medicines rate at 15%. Why it matters: it reshapes the economics behind branded-product pricing and the manufacturer rebate and MDS schemes a dispensary relies on.
The Drug Tariff is published every month by the NHS Business Services Authority on behalf of the Department of Health and Social Care. It sets out what dispensing contractors, pharmacies and dispensing practices, are reimbursed for the medicines they dispense, plus the fees and allowances they're paid for dispensing them.
For dispensing practices the part that moves the money is Part VIIIA: the basic reimbursement prices for the generic medicines that make up the bulk of what you dispense. Each line sits in a category, and the category decides how its price is set, and how often it changes.
Three long-standing categories (A, C and M), and from March 2026 a fourth: Category H. Each is priced on a different basis and a different clock.
A weighted average of list prices from a basket of leading suppliers. Historically reset monthly; under reform since 2024 towards a quarterly, sales-data-based footing.
Cycle · quarterly (under reform)Reimbursed at the price of a named manufacturer or supplier specified in the Drug Tariff, used where there is no listed Part VIIIA generic price. The price tracks that one product rather than a market.
Cycle · as the listed source changesSet from manufacturers' reported actual selling prices, then deliberately uplifted so the system delivers the agreed level of retained "margin" to dispensers. It is also the lever used to claw that margin back. Reset quarterly.
Cycle · quarterlyA separate Part VIIIA category with its own listed prices, covering specific products (such as certain biosimilars and specials) priced under Category H arrangements. DHSC sets the price from suppliers' sales data, and it applies only where the drug is prescribed generically. Updated quarterly.
Cycle · quarterlyKnowing a line's Tariff price is only the start. Three further mechanisms decide whether you actually kept any of it.
Reimbursement category, minus clawback, plus fees, against what you actually paid after rebates, resolved for the right week, for every line. Miss one moving part and the margin you think you made is not the margin you kept.
Reimbursement is being steadily rebuilt around suppliers' real sales data. That means more accuracy for the NHS, and more frequent, harder-to-predict change for you.
The first products are listed under the new Category H, a separate Part VIIIA category priced from sales data and updated quarterly (next change June 2026). Community Pharmacy England objected to the timing, warning it adds uncertainty to an already fragile supply chain, so expect early volatility as the list grows.
Category A reimbursement is under reform from monthly supplier-list pricing towards a quarterly basis driven by price-per-unit sales and volume data, which would smooth some month-to-month noise but lag the market by a quarter.
The common thread across Category M, the Category A reforms and now Category H is the same: prices set from real sales data, reviewed on quarterly cycles, with margin recovered more tightly. The net effect for a dispensary is less slack and more lines sitting close to the line between profit and loss, which is exactly where continuous, line-level monitoring earns its keep.
RxMargin Live Market tracks every concession the moment it is published, across the whole market, alongside live wholesaler prices and the Drug Tariff, so your practice never reimburses below cost. Open the live demo →
Those are the same market-wide figures every practice sees. The biggest recoverable margin is specific to your dispensing, and that lives in the tailored report. Get an estimate of what your practice could unlock.
RxMargin reconciles every dispensed line against the right category, the week's concessions and your real costs, then shows you what is recoverable.