Three quarters of pharmacies may be worse off each month under the new discount deduction model announced last week, according to an analysis by PharmData.

The PSNC announced last week that it had agreed changes to the discount deduction system with the Government, with the new payment system to be split into three parts – generic medicines, branded medicines and appliances – instead of there being one value for all three, with separate values for each one.

The changes, which will take effect from October and run for six financial quarters up to January 2024, aim to provide “fairer access to medicine margin across the community pharmacy sector,” said contractor and PSNC member Fin McCaul.

However, concerns have been raised that the changes will favour those pharmacies that dispense higher numbers of items and penalise smaller pharmacies.

The company estimates that 8,296 pharmacies will be worse off under the new deduction scheme, while 2,811 will be better off.

According to the company’s projected calculations, distance dispenser Pharmacy2U is set to be the biggest beneficiary of the changes, saving £129,000 from a reduction to its monthly deductions.

Speaking to Pharmacy Network News, PharmData’s Oliver Staunton said the changes “are going to better off for the larger pharmacies and worse for the smallest pharmacies”.

While the changes are based on the value of dispensed items rather than the volume, these “tend to correlate together,” he said.

“We’ll know for certain the effects of the changes once NHSBSA starts providing both sets of figures to pharmacies, which will be from October,” said Mr Staunton.

For those pharmacies expected to lose money each month, the amounts are likely to be small, he said: “There are thousands of pharmacies for whom this will mean a difference of £100 a month or so.”

The worst-affected pharmacies will see their monthly deductions rise by £318 according to PharmData’s estimates.