Subject to F2subsections (2) and (8) below, for each financial year, F3every Primary Care Trust and every F6Health Authority shall, by notice in writing given to each practice in relation to the members of which it is the relevant F4Primary Care Trust orF6Health Authority, specify an amount of money (in this Act referred to as an “indicative amount”) representing the basic price of the drugs, medicines and listed appliances which, in the opinion of the F4Primary Care Trust orF6Health Authority, it is reasonable to expect will be supplied in that year pursuant to orders given by or on behalf of the members of that practice.

Subsection (1) above does not apply with respect to a practice which is or forms part of a fund-holding practice recognised under section 14 above.

The members of a practice shall seek to secure that, except with the consent of the relevant F8Primary Care Trust orF10Health Authority or for good cause, the orders for drugs, medicines and listed appliances given by them or on their behalf are such that the basic price of the items supplied pursuant to those orders in any financial year does not exceed the indicative amount notified to the practice for that year under subsection (1) above.

For the purpose of measuring the extent to which a practice is operating within the indicative amount notified to it under subsection (1) above for any financial year, a F8Primary Care Trust orF10Health Authority shall set against that indicative amount an amount equal to the basic price of the drugs, medicines and listed appliances supplied in that year pursuant to orders given by or on behalf of members of the practice.

For the purposes of this section, regulations may make provision as to the specification of, or means of calculating, the basic price of any drugs, medicines or listed appliances.

If, in the case of any practice, a member is on the medical list of a Health Board constituted under section 2 of the M1National Health Service (Scotland) Act 1978 (as well as on that of a F11Primary Care Trust), any question whether this section applies in relation to the members of the practice shall be determined in accordance with regulations made by the Secretary of State; and any such regulations may modify the preceding provisions of this section in their application to such a practice.

This section does not apply in relation to the performance or provision of personal medical services in accordance with arrangements made under section 28C of the principal Act.