Reimbursement

Financial Framework · 2025-26

Non-Global Sum

The Drug Tariff arrangements in Scotland differ from elsewhere in the UK — covering how medicines are priced, reimbursed, and how margin is managed across the network.

Back to Framework

Overview

Scotland's Drug Tariff & Reimbursement

The Drug Tariff arrangements are different in Scotland from elsewhere in the UK. You may commonly hear reference to 'Category M' in the pharmacy press — Part 7 of the Scottish Drug Tariff is broadly the Scottish equivalent of this mechanism, but with differences to suit Scotland's agreed Tariff arrangements.

Part 7 is used to set the reimbursement prices of around 850 commonly prescribed medicines. It is the principal price adjustment mechanism to ensure delivery of the retained margin guaranteed as part of the pharmacy funding. As prices have to be set in advance, estimated volumes are used which may differ from actual volumes.

The scheme is closely monitored by CPS and the Scottish Government to ensure it operates correctly and to identify anomalies. Regular feedback is provided to ISD, who manage the Drug Tariff in Scotland and set prices on behalf of Scottish Government. Prescriptions with Part 7 items are paid at the published Part 7 price — brand or manufacturer endorsements are ignored.

Pricing Mechanisms

Part 7 and Non-Part 7 Medicines

Part 7 — Generic Medicines (~850 lines)
Set annually using manufacturer volume and price data plus NSS dispensing volumes. Reimbursement is at the published Part 7 price — brand or manufacturer endorsements are ignored. Closely monitored by CPS and Scottish Government with regular feedback to ISD.
Non-Part 7 — Branded & Other Medicines
No published tariff price. Contractors must endorse the brand or wholesaler on paper and electronically. Practitioner Services maintain an on-file price list; where no price is held, a contractor price endorsement or the dm+d dictionary may be used.

How Part 7 Prices Are Set

Uses information gathered from manufacturers on volumes and prices of products sold

Combined with information from National Services Scotland on dispensing volumes

Prices are set annually in advance — estimated volumes are used which may differ from actual volumes

CPS and Scottish Government monitor the scheme closely and provide regular feedback to ISD

Shortages

Shortages & Adjusted Prices

From time to time, due to many factors, supply issues can arise for Part 7 medicines whereby they are unavailable at the Drug Tariff price.

CPS receives reports from contractors by telephone or through the shortage reporter on the website and enters into discussions with National Services Scotland. NSS may agree to a price adjustment — meaning the Drug Tariff price would be changed (likely increased).

Step 1 — Report
Contractor reports a shortage to CPS by phone or via the shortage reporter tool on the CPS website.
Step 2 — Adjust
CPS discusses with NSS. If verified, NSS agrees a price adjustment — the Drug Tariff price is updated (typically increased) to reflect the actual market cost.

Clawback Arrangements

Generic, Proprietary & Zero Discount

Generic Clawback (Part 7)
Contractors are allowed to retain an agreed level of margin from Part 7 medicines. Any income above the agreed sharing point due to Boards is delivered through a reduction to Part 7. Generic clawback ceased from April 2020.
Proprietary Clawback (Non-Part 7)
There is no agreement for profit to be retained on non-Part 7 medicines. Clawback is enacted using margins from the quarterly pricing survey. Applied on a sliding scale — the higher the value paid to the contractor, the higher the clawback rate.
Zero Discount (ZD) Lines
For lines agreed between Scottish Government and CPS where no discount can be achieved, items are classified as Zero Discount (ZD). Part 7 ZD lines: no generic clawback. Non-Part 7 ZD lines: no proprietary clawback. Items not classified as ZD are discountable.

The full list of Zero Discount medicines can be found in Annex A of Part 1 of the Drug Tariff. Contractors should check this list when sourcing Part 7 items to understand which lines are subject to clawback and which are protected.