The threat of health authorities' accounts being qualified as a result of the generic drugs crisis seems to have been averted, Accountancy Age understands.
The threat of qualification, revealed in Accountancy Age in October, arose because severe delays in processing prescriptions at the Prescription Pricing Authority means that health authorities will not have a full year’s figures for prescribing expenditure when they close their accounts in May.
Two possible solutions have been investigated. Either the accounts could be delayed, although this runs into problems with the government’s timetable for the introduction of resource accounting, or accounts could be closed with an agreed level of estimated figures for drug costs.
Following negotiations between the NHS Executive and the Audit Commission in January, Accountancy Age now understands that the Commission is happy in theory with a degree of estimation, although it wants to test the robustness of the Executive’s prediction model over the next couple of months. And officially it is insisting that decisions over the acceptability of estimated figures will be taken by auditors locally.
The problems at the PPA have been caused by an explosion in what are known as category D drugs. A drug gets classified as category D when there is a problem with availability forcing pharmacists to dispense often more expensive alternatives.
It takes staff at the PPA up to four times longer to process a category D prescription than it does a non-category D prescription. Normally just 1% of prescriptions fall into this category, but the PPA says in its latest processing month nearly one in five prescriptions was category D.
The latest information from the PPA is that prescribing data for October 1999 will not be with health authorities until at least the middle of February, about ten weeks later than under normal circumstances. Although health authorities should close accounts in May, the final deadline for including real prescribing data is being seen as 31 July when accounts have to be signed off by auditors.
By that stage the Executive believes only one or two months figures will have to be estimated.