What is the Drug Tariff? The short answer
The Drug Tariff is the monthly schedule published by NHS Business Services Authority (NHSBSA) that sets what NHS England reimburses community pharmacies for dispensing prescriptions, plus the fees, allowances and rules that apply to those payments. It sits within the Community Pharmacy Contractual Framework (CPCF), which is the overarching contract between NHS England and pharmacy contractors. Pharmacy income is contract-driven, not till-driven: it flows from the tariff and the CPCF, not from shop turnover.
This guide covers the mechanism. For live reimbursement prices, always use the NHSBSA Drug Tariff portal directly. The "latest changes" section below carries the most recent update and its as-at date.
Reimbursement vs remuneration: the two halves of pharmacy income
One of the most important distinctions in understanding how the Drug Tariff works is the split between reimbursement and remuneration. Both live within the Drug Tariff framework and the CPCF, but they cover entirely different things.
| Term | What it covers | How it is set | Where to look |
|---|---|---|---|
| Reimbursement | The price paid for the medicine or appliance dispensed (the "ingredient cost") | Drug Tariff Basic Price or Discount Not Applicable (DNA) price, reviewed monthly by NHSBSA | NHSBSA Drug Tariff portal |
| Remuneration | Fees and service payments (dispensing fees, advance payments, Pharmacy First payments, quality payments, other allowances) | Negotiated under the CPCF and updated periodically; not drug-by-drug | NHS England CPCF pages |
Both are published as part of the Drug Tariff document, but they flow from different economic decisions. Reimbursement tries to track the cost of the drug. Remuneration recognises the labour, dispensing risk, and service value the pharmacy provides. Understanding which half is moving when you see income change is the first step in margin analysis.
Sources: NHS England, Community Pharmacy Contractual Framework; NHSBSA, Drug Tariff.
The main parts of the Drug Tariff: a plain-English tour
The Drug Tariff is a large document with several distinct parts. Prices within each part change monthly; this overview covers what each part does, not the specific prices (those must be checked via NHSBSA).
| Part | What it covers | Why it matters to pharmacy finances |
|---|---|---|
| Part II (Category M) | Reimbursement prices for commonly dispensed generics, set centrally and adjusted retrospectively | The largest volume category; margin here is inherently volatile because prices are set after dispensing |
| Part IX | Appliances: stoma products, catheters, wound management and similar | High-dispensing-cost lines; reimbursement pricing is separate from standard drugs |
| Part VIII (Category A, B, C) | Branded and other specified drugs at set prices | More stable than Category M; margin is set by the spread between list price and what you actually pay |
| Fees and allowances | Dispensing fees, Pharmacy First payments, quality payments, advance payments on account | The remuneration half; income here is volume- and service-driven, not drug-price-driven |
| Concessions | Temporary uplifts for drugs in short supply where the basic reimbursement price falls below market cost | Protect margin in supply-crisis months; must be claimed and checked monthly |
For full category descriptions and current prices, always refer to the current NHSBSA monthly edition. Part names and structure can be reorganised in a tariff revision; the NHSBSA edition is the binding reference.
How a Drug Tariff change reaches your margin
When NHSBSA revises a reimbursement price in the monthly tariff, the effect on a pharmacy's dispensing margin is direct and immediate from the following month's payment. Understanding the mechanism matters more than any specific figure, because the direction of the change (up or down) and which category it falls in determines how your income is affected.
The core dynamic, sourced to HP 8 (NHSBSA Drug Tariff), is this: gross margin on dispensing is set centrally and retrospectively adjusted. You buy the drug from a wholesaler at a market price. You dispense it. NHSBSA then reimburses you at the Drug Tariff price for that month. The spread between those two figures is your gross margin on that item, and it can change each month without any action on your part.
- Tariff price rises above what you paid: margin on that item improves.
- Tariff price falls below what you paid: margin on that item is compressed or turns negative.
- Concession granted: a temporary uplift to the tariff price for a short-supply drug, partially protecting margin during a supply disruption. The concession expires; you must check each month whether it is still active.
This mechanism is why pharmacies cannot manage dispensing profitability with ordinary retail margin logic. The "selling price" (reimbursement) is fixed by NHSBSA, not by the pharmacy. The "cost price" (wholesaler price) is determined by supply and demand. Margin is the residual, and it moves monthly. For a detailed look at how Category M clawbacks work within this mechanism, see the related post on Category M clawbacks explained.
Concessions, broken bulk, and the volatile edges of the tariff
Two provisions at the edges of the Drug Tariff generate regular financial questions from dispensing pharmacies.
Concessions
When a medicine is in short supply and pharmacies cannot source it at anywhere near the normal tariff reimbursement price, NHSBSA can grant a concession price: a higher reimbursement price for that drug for that month only. Concessions are published monthly alongside the main tariff update. They are not automatic; a pharmacy needs to be aware of which drugs have a concession for the month and, in some cases, must meet certain conditions. They expire at month-end unless renewed. NHSBSA is the only source; check the current edition at the start of each month.
Broken bulk
Where a drug is only available in pack sizes larger than the prescribed quantity, a pharmacy may have to open a full pack to dispense part of it, leaving a partial pack that cannot easily be used. The Drug Tariff includes provisions to allow reimbursement of the full pack in qualifying circumstances, recognising the economic cost of broken packs. The conditions are set out in the tariff rules and are subject to change; the applicable edition at the time of dispensing governs.
Both provisions illustrate the broader point: the Drug Tariff is a live, operational document that requires active monthly monitoring, not a static reference. Financial planning that assumes tariff prices and concession states are stable will underestimate income volatility.
Drug Tariff changes: latest update
As at: July 2026. This slot is refreshed monthly. Check the NHSBSA Drug Tariff portal for the current edition and any concessions in force this month. Live prices and concession lists are not reproduced here.
The July 2026 edition of the Drug Tariff is now available at the NHSBSA portal. As with every monthly edition, Category M reimbursement prices have been reviewed and a number of lines revised upwards or downwards relative to June. Concession prices for drugs in short supply this month are also listed in the current edition.
Notable areas to check in the current edition:
- Category M price movements: high-volume generic lines where the tariff price has moved significantly relative to your current wholesaler buying price will have the most immediate impact on dispensing margin this month. Cross-reference your July purchase prices against the new tariff list before drawing margin conclusions.
- Concessions: the concession list for July is published within the edition. If you dispensed any listed drug this month, check whether a concession applies and that your dispensing system is capturing it correctly.
- Fee rates: any changes to dispensing fees or Pharmacy First payment rates for the current period are set out in the fees and allowances section. These are updated less frequently than drug prices but should be checked when a new CPCF negotiation period begins.
For the full July 2026 edition, price look-up tool, and concession list: NHSBSA Drug Tariff portal.
How to check the current Drug Tariff
The authoritative and only binding source is the NHSBSA Drug Tariff portal. It provides:
- The current monthly edition as a downloadable document
- A searchable online price look-up tool for individual drug lines
- The current month's concession list
- Archived previous editions for retrospective checking
Third-party reposts and PMR system price feeds may lag the official edition or carry errors. For any financial decision, dispensing claim, or margin calculation, use the NHSBSA portal as the primary source and treat other feeds as convenience tools only.
For the pharmacy income side of the picture (how your FP34 submission translates into the cash that arrives roughly two months later), see the related post on how the FP34 payment cycle works.
Understanding the tariff is half of managing margin
Reading the Drug Tariff tells you what NHSBSA will reimburse you. It does not tell you how that compares to what you are actually spending to dispense, how your margin stacks up against comparable pharmacies, or where the largest variances in your model sit.
That second half, measuring your actual margin against the tariff, requires benchmarking: comparing your dispensing costs, purchase prices and reimbursement receipts against sector norms. Pharmacies that understand their tariff position but have not benchmarked their buying costs regularly find margin leakage that the tariff alone cannot explain. If understanding where your dispensing margin sits relative to the sector would help, the pharmacy benchmarking and margin review service covers that analysis.