"PSNC has negotiated an £87m increase in pharmacy contract funding for 2009/10 with the Department of Health. This represents a 3.9% increase on last year's funding."
We're half way through the year so we have made the figures match what we have already seen an can project into the next six months. However this extra money is given to you by PSNC and is not profits earned from your own business decisions as that will be taken away.

"In addition to this, the Department of Health has agreed to make substantial provisions against the excess margin over the £500m, which has been identified for a number of one-off costs pharmacy contractors are facing, including preparing for EPS2, information governance, and business continuity planning, to sustain the effective delivery of community pharmacy services. Details of these arrangements will be finalised over the coming weeks."
You know all that cash that you have stuffed under your matresses from the early part of this year. Well you can keep that to pay for all the extra things that we are going to insist you pay for over the next 12 months. Well not all of it obviously.

"PSNC had previously announced that the medicines margins survey disclosed that significant excess margin had been achieved beyond the £500 million allowed. To recover this, having allowed for the provisions, average item value will be reduced by 9.4 pence per item achieved through a reduction in Category M reimbursement prices. The reduction came into effect from 1st October. Fees and allowances remain unchanged from October 2009 because of prescription volume growth, including the fee per MUR. Volume thresholds for the Establishment payment and the Practice payment will increase by 3% in line with previous years."
Sorry, I said in the previous paragraph that we were going to allow you to keep "substantial" amounts of that cash that we say you have profiteered out of us. Well actually you can't. In fact we are already taking it back off you.

"The financial environment continues to be challenging for pharmacy contractors, but the Minister has sought to protect levels of funding in the period before the results of the joint PSNC / DH Cost of Service Inquiry can identify funding needs for the future. The substantial increase in numbers of pharmacies since 2005 has put great pressure on funding."
We are trying to make sure you don't all go bust whilst at the same time trying to work out how much we should be paying you. There are so many more pharmacies now that we have made it a free for all by allowing loopholes in the control of entry with 100 hour pharmacies, local service provision and internet/mail order pharmacies and there isn't really enough money to go round. woops!

"The £87m increase in pharmacy contract funding represents a 3.9% rise on last year's figures. PSNC is now focused on the Cost of Service Inquiry, which is its early stages and is due to report in 2010. This will represent a vital step in ensuring that contractors’ remuneration and reimbursement accurately reflects all the costs of providing NHS community pharmacy services."
We have increased the amount of money that you can turn over while limiting the amount of profit that can be made. We are still trying to work out how much it actually costs to run a pharmacy and provide services. We continually reduce the amount we pay until all the pharmacies are unprofitable. When there is only one left that must be the minimum amount required to run a pharmacy. Alternatively we could work out exactly how much it costs to run a pharmacy but we might find out that we owe you money so we'd rather stick with this figures out of thin air approach. Perhaps you could do some moonlighting for the local PCT?

"Total funding available for distribution will be £2,300m. Of this sum, buying profit of £500m is allowed. Fees and allowances and buying margins are adjusted in October in each year in order to deliver as closely as possible the funding available for distribution in the year.
Consequently any excess buying profit earned in the first half of the year will be reflected in the level of fees and allowances for the second half of the year. Reimbursement will be adjusted in the second half of the year to prevent any further excess being accrued."
This is great if you are a large company. Make as much excess profit as you can in the first half of the year 'cause when it's finally noticed in October the difference will be claimed back equally from everyone. If your not a large company this means that if you were making £2 on a particular drug in the first half of the year we will be taking back the extra pound you have earned by reducing the price. Then to make sure you don't get any excess profits next half we'll take the other pound as well. You might think that this at least makes you even but we're still going to take 10% clawback as well.