Dr David Baker, DDA chief executive, said that the profitability of dispensing practices has taken ‘a severe knock'.
‘If the situation does not improve, the financial viability of the dispensing service provided to our patients will be severely threatened,' he said.
Dispensing practices are reimbursed for the cost of the medicines they provide. But the government claws back an average of 11%, a level negotiated in the mid-1990s.
Drug companies now offer discounts ‘well below the level of the abatement' on many branded products, Dr Baker said.
‘This leads in the most severe cases to practices providing medicines at a loss,' he added.
GPC Wales chairman Dr David Bailey said GPs dispensed some drugs at a loss of up to 10%.
‘A significant number of the drugs they now dispense are at a loss even taking into account the dispensing fee.'
The GPC has agreed with NHS Employers to have a cost enquiry to inform negotiations over the fees, and the DoH will ‘look at whole issue of the clawback', he added.
Dispensing practices operate at a commercial disadvantage to pharmacies, whose clawback is regularly renegotiated and now stands at 8.5%. Unlike dispensing practices, pharmacies also benefit from so-called ZD (zero discount) products which attract no clawback.
- Read the full version of this story in this week's issue of GP dated 18 September