The National Health Service (Indicative Amounts) Regulations 1997

Basic price of drugs, medicines and listed appliances

2.—(1) For the purposes of section 18 of the 1990 Act (indicative amounts for doctors’ practices), in a given month the basic price of a listed appliance or of a given quantity of a drug or medicine is—

(a) its net cost calculated in accordance with paragraph (2); minus

(b) an amount representing a percentage applicable to the given month of its net cost, being a percentage calculated in accordance with paragraph (3) and published by the Secretary of State, plus

(c) the amount specified in Part IV of the Drug Tariff for the given month as the allowance for containers and specified measuring devices (but the amount is not to be added in the case of—

(i) a listed appliance supplied with oxygen, or in connection with the supply of oxygen, or

(ii) drugs and medicines supplied in bulk, as defined in paragraph (5)).

(2) For the purposes of paragraph (1)(a), the net cost of a listed appliance is its price as specified in the Drug Tariff for the given month, and the net cost of a drug or medicine is—

(a) where it is included in the Drug Tariff for that month and a price is specified for the given quantity, that price, or

(b) otherwise, the manufacturer’s list price for that quantity.

(3) The percentage referred to in paragraph (1)(b) is calculated as respects practices whose relevant Health Authority is in England, by the Prescription Pricing Authority, and as respects practices whose relevant Health Authority is in Wales, by the Welsh Health Common Services Authority, by

(a) adding together all the deductions made pursuant to the deduction scale in Part V of the Drug Tariff in calculating the remuneration of pharmacists in England or, as the case may be, in Wales for the given month for dispensing;

(b) dividing that sum by the total net cost of items dispensed by pharmacists in England or, as the case may be, in Wales for the given month, and

(c) multiplying the result by 100.

(4) Where in respect of any given month, the sum of all the basic prices calculated in accordance with paragraph (1) of all the drugs, medicines and listed appliances supplied pursuant to orders given by or on behalf of the members of the practice is not an exact number of pounds, then for that month any amount of 50 pence or more shall be rounded up to, and any amount less than 50 pence shall be rounded down to, the nearest whole pound.

(5) For the purposes of this regulation, a drug or medicine is supplied in bulk only when—

(a) it is ordered by a doctor for two or more of his patients;

(b) those patients reside in a school or institution in which at least 20 persons reside;

(c) the name of that school or institution is written on the order; and

(d) at least 10 of the persons residing in the school or institution are patients of the doctor who ordered the drug or medicine.