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Smart Purchasing - Generics


Last month I wrote about the Drug Tariff and how it influences and affects dispensing practice income.

The primary role of the Drug Tariff is:

To define the NHS terms of reimbursement for pharmacy and appliance contractors.   [The situation for dispensing doctor contractors is primarily set out in the Statement of Financial Entitlement and overrides the Drug Tariff.]


Determining the basic reimbursement price of drugs and other devices, oxygen, dressings, appliances and reagents [This is very relevant to dispensing doctors and you should make sure you are aware of Part VIIIA and Part VIIIB as a minimum requirement!]

So it is the Drug Tariff which determines the money you get back for dispensing an item of medicine to a patient. This is the very basic purpose of the Drug Tariff. And you will be aware that the price of generic medicines can go down as well as up and generic dispensing should make up the majority of your volume dispensing.

So smart purchasing of your generics is essential.

In this case by “smart” we are asking you to look at your discount from Drug Tariff. Do you know the actual price you are paying for the items listed on the infographic to the right? Those medicines will be a major part of your generic dispensing and if you don’t know the discount you are getting on them you won’t know what your profitability is!

It has been a popular tactic for some generic suppliers to create a discount scheme where you need to buy a certain amount of medicines to get your discount. Or sometimes discounts are hidden behind rebate schemes, where if you buy a certain generic at a certain price you get a rebate or discount from another, different generic. It might be considered that some generic discount schemes are set up to be deliberately hard to understand, I can’t comment on that. But what I can say is that discount from invoice price is by far my preferred way to buy generics.

My analogy is always if I am shopping in a supermarket, I want my discount at the till, not money off my next shop, or coupons for money off things I don’t want.

Take a look at the discounts on the medicines below, plenty of them are running at a discount of above 50% - can your generic supplier match these levels of discount? Its worth asking them. Its also worth shopping around on your top twenty generics. You could send them out to tender and go with the best offer.

Buy your generics wisely, as they are still very profitable if purchased correctly!