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.
The July 2026 Drug Tariff applies to prescriptions from 1 July 2026 and carries the quarterly Category M reprice alongside the monthly Part VIIIA changes. Notable moves include captopril 12.5mg tablets (56) up from £21.41 to £28.17 on moving to Category C, trimethoprim 50mg/5ml oral suspension up from £7.31 to £16.22 on moving to Category A, and fosfomycin 3g granules down from £7.58 to £5.02 on moving to Category M. Why it matters: Reimbursement on a large number of generic lines changed on 1 July, so re-check buying prices against the new tariff before reordering.
DHSC confirmed a fourth and final June update on 30 June, taking June 2026 to 254 price concessions, above May's record 230 (April 204, March 201). Improved prices included atorvastatin 60mg tablets (28) at £4.72 (previously £4.37) and lisinopril 20mg tablets (28) at £1.86 (previously £1.20), and isotretinoin 20mg capsules (30) were granted at £31.59. Why it matters: Concessionary prices apply only to the month granted, so reconcile June claims against these final figures while July starts again from base tariff.
The annual Dispensing Services Quality Scheme (DSQS) sign-up window closed on 30 June; dispensing practices register via their ICB, naming the GP accountable for dispensing quality. Payment is based on dispensing patients on the list at 1 January of the financial year. Why it matters: A practice that missed the deadline forfeits a full year of DSQS payment, so diarise the 2027 window now.
The July 2026 Drug Tariff adds five products to Part II Discount Not Deducted (DND) status, including liothyronine 25microgram tablets, budesonide 4mg suppositories and allopurinol 300mg/5ml oral suspension, and removes one. DND lines are exempt from the discount deduction scale applied to monthly reimbursement. Why it matters: A line moving to DND is paid without the clawback deduction, so it is more profitable to dispense than its price alone suggests.
The July 2026 Drug Tariff deletes 24 Part VIIIA Category C products, including asenapine sublingual tablets and several insulin formulations, plus a further list of Part IX appliance and stoma lines. Additions arrive alongside: diclofenac sodium 25mg gastro-resistant tablets (84) in Category A and rivastigmine 4.6mg/24hours and 9.5mg/24hours patches in Category C. Why it matters: Deleted lines are no longer reimbursable at a listed price, so check any remaining stock of them against the July tariff.
Supply of rivastigmine 4.6mg/24hours and 9.5mg/24hours transdermal patches is disrupted until late September 2026; the 13.3mg/24hours patch remains available but cannot support an uplift in demand. Alzest patches (Dr Reddy's) have been discontinued in all strengths, and both affected strengths gained a Category C tariff listing from July. Why it matters: Dementia patients on these patches need a managed switch, and scarce stock often pushes the buying price toward or above tariff.
Ten price concessions granted late in May 2026 were rolled over into June 2026 under the DHSC late-request roll-over process. Lines included atorvastatin 60mg tablets (28) at £4.37, ticagrelor 90mg tablets (56) at £4.18, bicalutamide 150mg tablets (28) at £4.77, rivaroxaban 15mg tablets (28) at £1.03 and progesterone micronised 100mg capsules (30) at £4.61. Why it matters: These early June uplifts apply to specific lines, so check stock you hold of them against the concession price.
DHSC granted 230 price concessions for May 2026, at the time a record high and the third month in a row above 200 (April 204, March 201). June has since passed it at 254. Concessionary prices apply only to the month granted. Why it matters: A record concession month means many generic lines reimbursed above base tariff, so margin depends on buying below the concession price.
The 2026/27 community pharmacy settlement raises total funding 10.3% to £3.636bn and increases retained medicine margin (Category M) by £200m to £1.1bn. It also writes off up to £239m of margin over-delivery earned to the end of March 2026. Why it matters: A higher retained-margin target means DHSC recalibrates Category M tariff prices upward, supporting generic dispensing margin through the year.
As part of the 2026/27 settlement, DHSC agreed to write off up to £239m of net contract margin over-delivery earned to the end of March 2026 rather than recover it. The measure is intended to stabilise the volatile medicines supply chain. Why it matters: Writing off prior over-delivery removes a clawback risk that would otherwise have reduced future reimbursement.
The June 2026 Drug Tariff added five Part VIIIA Category C products and amended five others: budesonide capsules fell from £75.05 to £60.00, macrogol compound rose from £4.38 to £4.91, and naproxen suspension rose from £45.00 to £90.09. Eight Category C products were deleted. Why it matters: Reimbursement on these specific lines changed from 1 June, so dispensing margin shifts wherever you stock them.
The June 2026 Drug Tariff added nine products to Part II Discount Not Deducted (DND) status and removed two. DND lines are exempt from the discount deduction scale applied to monthly reimbursement, and July added a further five. Why it matters: A line moving to DND is paid without the clawback deduction, so it is more profitable to dispense than its price alone suggests.
The June 2026 Drug Tariff deleted 17 Part IX appliance and stoma products, including catheters, dressings, eye and ear products and compression garments. July followed with a further list of Part IX deletions. Why it matters: Deleted appliance lines are no longer reimbursable, so any remaining stock cannot be claimed against the tariff.
April 2026 closed with 204 price concessions after a fifth update that improved prices on several lines. It was the second of four consecutive months above 200 concessions. Why it matters: Later concession updates can raise the price on lines already dispensed, so reconcile April claims against the final figures.
Serious Shortage Protocols SSP079 to SSP082 cover all four Estradot strengths (25, 50, 75 and 100 microgram) and were further extended to Friday 10 July 2026, allowing supply of an equivalent Evorel or Estraderm MX patch without referral back to the prescriber. Why it matters: The substitution flexibility lapses on 10 July unless extended again, so check the live SSP list before supplying an alternative.
The Single Activity Fee paid for every item dispensed, including medicines and appliances, is 152p. The fee is a fixed per-item payment separate from the reimbursement of drug cost. Why it matters: The per-item fee underpins dispensing income and is unchanged, so volume remains the main lever on fee revenue.
The discount deduction (clawback) scale deducts between 5.63% and 11.5% of the monthly total of prices reimbursed, with higher-volume dispensers deducted at higher rates. Discount Not Deducted lines are excluded from this calculation. Why it matters: Clawback erodes headline reimbursement, so the effective margin on a line is the tariff price less the applicable deduction.
March 2026 closed with 201 price concessions, the first of four consecutive months above 200. The run of high concession totals continued into April (204), May (230) and June (254). Why it matters: A sustained run of 200-plus concession months means generic reimbursement keeps moving, so monthly stock reviews protect margin.
The 2026 payment (rebate) rate for newer branded medicines under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) is 14.5%, down from a record 22.9% in 2025. Newer medicines are broadly those within 12 years of marketing authorisation. Why it matters: VPAG is a manufacturer-to-DHSC rebate that does not change the tariff a dispensary is reimbursed, so branded reimbursement is unaffected.
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.