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Published on 1 February 2008

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Pharmacy contract spending defended

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The Government has rejected claims by the Conservatives that it spent £811m more than it should have done in the first two years of its new pharmacy contract.

The contract, which came into effect in April 2005, imposed a £500m limit on the profit that pharmacy contractors can make from purchasing medicines and then dispensing them on the NHS.

The Tories claimed that the contract was being mismanaged after a parliamentary written answer showed that the cap was exceeded by £300m in 2005-06 and £511m in 2006-07.

But the Department of Health (DoH) said £300m was recovered in 2006-07 and the £511m excess is in the process of being clawed back.

A DoH spokesman said: “The reimbursement prices of generic medicines and fees paid to contractors were adjusted in October 2006 and 2007 to recover the excess margin.”

Public health minister Dawn Primarolo added: “We periodically carry out a survey to establish the level of excess margin.

“The Government then works with pharmacy contractors to bring the funding of the contract back into balance by clawing back the excess.

“This process happens every year and ensures that the Government pays the right price for essential drugs.”

Copyright © PA Business 2008

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