The work behind accurate, on-time pharmacy payments

By Martin Morrison, Associate Director in Primary and Community Care (PaCC).

“Our job is simple: to make sure pharmacy contractors receive the right payment at the right time.”

Every month, more than 140 colleagues and multiple integrated digital platforms support the processing of millions of dispensed items. This helps ensure pharmacy contractors are paid accurately and on time.

Accuracy matters

Our target is to pay all primary care contractors, including pharmacy contractors, with at least 99.5% accuracy. We measure this by comparing the total amount paid each month against any payment errors, including underpayments and overpayments made by PaCC.

Find out more about how payment accuracy is measured.

Although our target is 99.5%, we always aim higher. Across all pharmacy payments, the remaining 0.5% could represent around £700,000 of inaccurate payments. For an individual contractor, it could mean a difference of about £500 underpaid or overpaid. This is why every fraction of a percentage point matters.

We also aim to pay contractors by the last working day of each month, although our formal agreement is to pay by the first working day of the following month. In December, we aim to pay earlier, before the festive period.

From prescription to payment

Whether or not we receive an electronic dispensed message, the pricing and payment journey begins when we scan the paper prescription form. This triggers the validation and pricing of each dispensed item. If an electronic message is available, we merge the data directly into our pricing system rather than capturing the same information again. Many prescriptions are still paper only. For these, we extract the data from the scanned image and use digital and manual checks until the item is ready for pricing and payment.

Automation is pivotal to this work and is supported by investment made over the past 15 years. Around 91% of dispensed items are currently priced without manual input, using electronic data from prescribers and dispensers, and complex business rules built into our digital systems. If this rate falls significantly, it becomes more difficult to pay contractors on time.

What makes each month different?

No two payment cycles are the same. Each month, we process between 9.8 million and 11 million dispensed items. The number of working days varies, while public holidays can shorten timescales and staff absence can reduce capacity. Each year we see around a 4% increase compared to the previous year’s volumes.

The quality of paper prescriptions submitted to us can also vary, as can the accuracy of data from dispensers and pricing reference files. System downtime in GP practices, pharmacies or our own services can add further pressure.

Like the rest of the public sector, we run a lean operation. Together, these factors can put both accuracy and payment timescales at risk. We cannot control every factor, but the team stays flexible and responds quickly to keep payments on track.

A team effort

From February 2024 to August 2026, we paid every contractor on time using the dispensed data available to us. We fell below our accuracy target in only three months. For example, in March 2026, we corrected a fault as the system did not recognise some items marked as Not Collected/Not Dispensed. As a result, they were paid when they should not have been. When we corrected those overpayments, we accounted for the inaccuracy in payments made over the preceding months.

A lot happens behind the scenes each month. Achieving these results depends on colleagues across the service working together, anticipating challenges and responding quickly when circumstances change. Everyone has their part to play in making sure payments are accurate and on time.