The Tariff is the rulebook for what the NHS pays your dispensary back. Understanding its categories — and the reforms now reshaping them — is the difference between assuming you made margin and knowing it.
The Drug Tariff is published every month by the NHS Business Services Authority on behalf of the Department of Health and Social Care. It sets out what dispensing contractors — pharmacies and dispensing practices — are reimbursed for the medicines they dispense, plus the fees and allowances they're paid for dispensing them.
For dispensing practices the part that moves the money is Part VIIIA: the basic reimbursement prices for the generic medicines that make up the bulk of what you dispense. Each line sits in a category, and the category decides how its price is set — and how often it changes.
Three long-standing categories — A, C and M — and, from March 2026, a fourth: Category H. Each is priced on a different basis and a different clock.
A weighted average of list prices from the main suppliers (AAH and Alliance weighted more heavily than Teva and Accord). Historically reset monthly; since 2024 reforms it is moving onto a quarterly, sales-data-based footing.
Cycle · quarterly (reforming)Reimbursed on the list price of a particular branded product or supplier. Used where a generic isn't readily available from multiple sources — so the price tracks one product rather than a market.
Cycle · as the listed source changesSet from manufacturers' reported actual selling prices, then deliberately uplifted so the system delivers the agreed level of retained "margin" to dispensers. It is also the lever used to claw that margin back. Reset quarterly.
Cycle · quarterlyA subset of multi-source Category C products moved into a new category. DHSC sets the price from suppliers' sales data, and it applies only where the drug is prescribed generically. Updated quarterly.
Cycle · quarterlyKnowing a line's Tariff price is only the start. Three further mechanisms decide whether you actually kept any of it.
Reimbursement category, minus clawback, plus fees, against what you actually paid after rebates — resolved for the right week, for every line. Miss one moving part and the margin you think you made isn't the margin you kept.
Reimbursement is being steadily rebuilt around suppliers' real sales data. That means more accuracy for the NHS — and more frequent, harder-to-predict change for you.
The first multi-source products move from Category C into the new Category H, priced from sales data and updated quarterly (next change June 2026). Community Pharmacy England objected to the timing, warning it adds uncertainty to an already fragile supply chain — so expect early volatility as the list grows.
Category A reimbursement is transitioning from monthly supplier-list pricing to a quarterly basis driven by price-per-unit sales and volume data — smoothing some month-to-month noise but lagging the market by a quarter.
The common thread across Category M, the Category A reforms and now Category H is the same: prices set from real sales data, reviewed on quarterly cycles, with margin recovered more tightly. The net effect for a dispensary is less slack and more lines sitting close to the line between profit and loss — which is exactly where continuous, line-level monitoring earns its keep.
RxMargin reconciles every dispensed line against the right category, the week's concessions and your real costs — then shows you what's recoverable.