Chief executive Dr David Baker said a near 9 per cent cut in dispensing fees from October would cost an average dispensing practice up to £850 a month.
Combined with proposed reductions in the category M tariff - the reimbursement deal for generic drugs - practices could be as much as £2,000 a month worse off, he said.
'We'll all be taking lower drawings and many practices could lose a staff member. We don't want to start shroud waving. But we do want to show that the shroud is ready to be waved.'
NHS Employers and the GPC revealed last week that dispensing fees would fall by 8.7 per cent from October.
The drop for the remaining six months of 2009/10 is designed to deliver an overall drop of 4.9 per cent drop for the year. From 1 April 2010 there will be an uplift to produce a figure 'appropriate for the full new financial year', NHS Employers said.
A DoH spokeswoman said dispensing incomes would be investigated as part of a cost-of-service inquiry next year. She added: 'We have been seeking a review of dispensing doctors' profits for several years but have only now reached an agreement with the DDA to do so.'
But Dr Baker said he had been seeking a review of dispensing costs for some time. 'At present whenever you write a prescription for an undiscounted item, you're effectively writing a cheque to the DoH,' he added.
The DDA now plans to gather more evidence of lost income.
- For the dispensing fees visit healthcarerepublic.com/management