Margin Sharing Arrangements

Published: 08/09/23

As touched on in the introduction to pharmacy funding, part of a pharmacy’s income is dependent on the money made on part 7 drug tariff medicines they source and provide on prescription – this profit is often referred to as the margin

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This incentivises efficient buying, as pharmacies will shop around for the best price for the items they are supplying to get the best deal possible on behalf of the NHS.

To monitor the margin, the Scottish Government has a pricing survey completed to compare the invoice price paid by pharmacies to the price Practitioner Services pay, the difference being the margin earned.  The survey result is used to monitor the total margin across the year.

The arrangements in circular PCA(P)(2023)26 cover the margin sharing arrangements for 2023/24:

• The level of guaranteed minimum funding for contractors is £100 million;

• The continued mapping of funding from Part 7 (Generic) Drug Tariff as guaranteed income will remain at £80m for the financial year 2023-24.

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