Draft Order to increase Dispensing Fee

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A decision made (29/09/2009) regarding: Draft Order to increase Dispensing Fee.

Decision Reference: MD-S-2009-0046
Decision Summary Title :	Health Insurance (Pharmaceutical Benefit) (General Provisions) (No 2) (Jersey) Order 2009		Date of Decision Summary:	24 September 2009
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 :	Health Insurance (Pharmaceutical Benefit) (General Provisions) (No 2) (Jersey) Order 2009 Report		Date of Written Report:	24 September 2009
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Basic dispensing fee – draft an Order to increase rates of the basic dispensing fee for supply of pharmaceutical benefit
Decision(s): The Minister decided that an Order should be prepared to increase the basic dispensing fee for pharmaceutical benefit supplied through the provisions of the Health Insurance (Jersey) Law 1967, effective from 1 November 2009.
Reason(s) for Decision: The Minister previously approved the settlement for Pharmacy Contractors for the period October 2006 to September 2009 (MD-S-2008-0059). The Minister decided to extend the decision so that the settlement period applies until the 30 September 2010. Consequently in accordance with the principles of the settlement, the dispensing fee is to be increased by RPI(Y) 2.9% to £3.05 per item (previously £2.96). The Minister requires a cost survey to be undertaken during the next twelve months to establish a definitive cost base for future remuneration agreements.
Resource Implications: The Health Insurance Fund is ring-fenced for the subsidy of primary care. The changes will have an estimated cost of £124,000 to the Health Insurance Fund. There are sufficient resources and no manpower implications.
Action required: Policy Principal to ask the Law Draftsman to prepare an Order increasing the rate.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Draft Order to increase Dispensing Fee

Health Insurance (Pharmaceutical Benefit) (General Provisions) (No 2) (Jersey) Order 2009 Report

Purpose of Report

The purpose of this Order is to increase Health Insurance dispensing fees with effect from 1st November 2009 from £2.96 to £3.05.

Background

The Health Insurance (Jersey) Law 1967 collects contributions (2% in total) from employers, employees and the self-employed and uses this money to pay for medical and pharmaceutical benefits and the administration of the Law. The money collected cannot be used for any other purpose.

The pharmaceutical benefit consists of the cost of the medicines and the remuneration paid to community pharmacies who supply the prescribed medicines. The community suppliers provide medicines under the terms and conditions set by the Health Insurance (Pharmaceutical Benefit) (General Provisions) (No2) (Jersey) Order 2008. These terms and conditions are negotiated with community suppliers on a three yearly basis and the dispensing fee is part of the agreement. The current three year agreement expires on 30 September 2009 but despite ongoing negotiations (September 2008 to July 2009) no final settlement has been reached.

The proposed increase is an extension of the current (1 October 2006 to 30 September 2009) settlement of community suppliers’ terms and conditions. During the current negotiation, the Minister seeks to:

Extend the period of the current terms and conditions to September 2010.
Increase the dispensing fees by RPI(Y) of 2.9 per cent for 1st November 2009 in concordance with the current terms and conditions.
Require a cost survey to be undertaken during the next 12 months to establish a definitive cost base for future remuneration agreements with community suppliers.

Recommendation

For the Minister to approve the Order amending Pharmaceutical Benefit) (General Provisions) (No 2) (Jersey) Order 2002, in concordance with the principles of the 2006 settlement with community suppliers. This new Order increases the dispensing fees within the Health Insurance Fund to £3.05 with effect from 1 November 2009.

Financial and manpower implications

The changes have an estimated additional annual cost to the Health Insurance Fund of £124, 000. There are no manpower implications.