Health Insurance (Pharmaceutical Benefit) (General Provisions) (No. 2) (Amendment No. 12) (Jersey) Order 2014

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 29 August 2014:

Decision Reference: MD-S-2014-0113
Decision Summary Title:	DS - Health Insurance (Pharmaceutical Benefit) (General Provisions)(No 2) (Amendment No 12) (Jersey) Order 2014		Date of Decision Summary:	27 Aug 2014
Decision Summary Author:	Policy Principal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR - Health Insurance (Pharmaceutical Benefit) (General Provisions) (No.2) (Amendment No.12) (Jersey) Order 2014		Date of Written Report:	27 Aug 2014
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Health Insurance (Pharmaceutical Benefit) (General Provisions) (No.2) (Amendment No.12) (Jersey) Order 2014
Decision(s): The Minister made the Health Insurance (Pharmaceutical Benefit) (General Provisions) (No.2) (Amendment No.12) (Jersey) Order 2014
Reason(s) for Decision: The Health Insurance (Pharmaceutical Benefit) (General Provisions) (No.2) (Jersey) Order sets out the details in respect of the administration of pharmaceutical benefit, including the dispensing fee and the discount applied to remunerate pharmacists under the Health Insurance Law. A previous amendment to the Order created a two tier dispensing fee, with the first 50,000 items dispensed in a 12 month period attracting a higher dispensing fee and a commitment was given to increase the fee paid for tier-1 items (up to 50,000) with effect from October 1st 2014 in line with the Jersey RPI(Y) year to June 2014. This Order thus increases the dispensing fee for tier-1 items from £3.45 per item to £3.51 per item. Amendments have also been made to the discounting scale, reducing the claw-back from 15% to 10% and thereby allowing pharmacists to retain a greater proportion of the discounts they achieve.
Resource Implications: There are no manpower implications in respect of this Order. The cost of the dispensing fees and the pharmaceutical benefit is met by the Health Insurance Fund. The additional cost in the coming year (running 1 Oct 2014 to 30 Sept 2015) to uprate tier-1 dispensing fees and increase the percentage of discount retained by the pharmacists is calculated at approximately £136,200, based on current volumes.
Action required: Policy Principal to notify the Greffe and the Law Draftsman that the Order has been made and to forward the signed and sealed Order to the States Greffe, requesting the Greffier of the States to arrange for the Order to be notified to the States.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Health Insurance (Pharmaceutical Benefit) (General Provisions) (No. 2) (Amendment No. 12) (Jersey) Order 2014

Social Security Department Ministerial Decision Report
Subject:	Amendment to dispensing fee and discount scale
Exempt/Public:	Public
Date:	27 Aug 2014
Author:	Policy Principal, Social Security

Introduction

The Social Security Department provides a benefit from the Health Insurance Fund in respect of approved drugs prescribed by GPs and dispensed by community pharmacists. The fund meets the cost of the drug itself and a formula is applied to deduct a proportion of the discount achieved by the pharmacist. The fund also pays a fee for each prescription dispensed. This creates the total remuneration package.

The Minister for Social Security is responsible for setting the discount rates and the dispensing fee paid to community pharmacists.

It has been agreed that the dispensing fee for tier-1 items should be increased by RPI(Y) June 2014 and that the discount claw-back should be reduced to equate to 10% on aggregate.

Dispensing fee and discount values

A two tier dispensing fee was introduced in 2013, whereby a higher fee is paid per item for the first 50,000 items dispensed. On 1st October 2013 the fee was set at £3.45 per item in tier-1 and £3.13 per item in tier-2. The tier-1 dispensing fee will be increased with reference to the Jersey RPI(Y) year to June 2014, which has been calculated at 1.6% by the Statistics Unit. This will increase the fee per item to £3.51. (Tier-2 will remain at £3.13 per item.)

Pharmacist remuneration also includes the net cost of the drugs they dispense. This is calculated with reference to the drug tariff compiled and maintained under Regulation 18(1) of the National Health Service (Pharmaceutical Services) Regulations 1992 of the United Kingdom. In the UK and Jersey remuneration systems it is recognised that pharmacies often achieve a discount compared to the standard drug tariff prices; therefore a formula is applied to recoup a proportion of this discount. The discount formula is currently set to claw-back 15% and as of October 2014 this will reduce to 10%, enabling pharmacies to retain a larger proportion of any discount they achieve.

Costs

Dispensing fee: In the first year since the introduction of the two tier dispensing fee (May 2013 to April 2014) 1,277,200 items were dispensed in tier-1. The chart below shows how these are distributed across pharmacies.

Increasing the tier-1 dispensing fee from £3.45 to £3.51 will increase costs to the Health Insurance by approximately £76,600.

Reduction in discount clawback: In the eight months since October 2013 (over which period the discount scale was set to 15%), the scale has recouped £119,200 to the Health Insurance Fund. From this is it estimated that the scale would recoup a total of £178,800 across a 12 month period. Reducing the discount scale to return 10% of the discounts achieved will increase costs to by approximately £59,600. This is an estimate and would be the case if, during the coming year, similar drugs and volumes were prescribed as in the eight months since October 2013.

Resource Implications

There are no manpower implications in respect of this decision. The new discount scale and tier-1 tariff will be applied by NHS Business Services Authority. In total the uprate to the dispensing fee and reduction in the amount of discount recouped will increase costs to the Health Insurance Fund by approximately £136,200.