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Community pharmacy

Community pharmacies to lose out in new £2.8bn funding deal

The settlement includes £2bn, which will be delivered in fees and allowances, with the remaining £800m to be delivered through agreed drug purchase margins.  

The Royal Pharmaceutical Society (RPS) says it is ‘disappointed’ at the new deal between NHS England and Pharmaceutical Services Negotiating Committee announced on 22 September 2014.

Source: Eye Ubiquitous / Rex Features

Deal struck between PSNC and NHS England includes £2bn in fees and allowances and £800m in agreed drug purchase margins

The Pharmaceutical Services Negotiating Committee (PSNC) and NHS England have finally agreed a new funding contract for community pharmacy in England for 2014–2015.

The new £2.8bn deal includes £2bn in fees and allowances and £800m to be delivered through agreed drug purchase margins. The £800m figure represents £300m more than the existing agreement for purchase margins. 

Although the overall settlement of £2.8bn  is more than the £2.5bn settlement for 2012–2013, changes to the drug purchase margins mean that pharmacy contractors are set to lose income of £870 on average. 

The Royal Pharmaceutical Society (RPS) says it is “disappointed” at the settlement for community pharmacists reached with NHS England, which was announced on 22 September 2014. 

“Contractors will be disappointed that there will be a fall in income,” says Ash Soni, president of the RPS. “We would have expected funding to stay flat and not experience a reduction, so it’s disappointing.” 

“I think the PSNC probably fought as hard as they could, which is why I think it took so long to reach a settlement,” he says. “It’s probably been the best that they could do, but it’s not good.” 

Community pharmacists will be unhappy with the settlement agreed between the PSNC and the Department of Health, according to the chief executive of Pharmacy Voice Rob Darracott.

“We have got to do a bit extra for pretty much the same [amount of money] but these are the times that we are living in,” he says. “It would have been nice to have had a signal that they were going to make good on lots of the claims and promises about what pharmacy can contribute.”

PSNC’s chief executive Sue Sharpe admitted the negotiations had been “extremely lengthy and complex”, adding that the deal was a “fair settlement” recognising the financial squeeze across the NHS. 

“For over a year we have been warning contractors to expect a tough settlement, one that represented more work for the same level of funding,” she says. “In common with the rest of the NHS, pharmacies have been required to find savings, and this settlement reflects that policy.” Contractor members of the PSNC were unanimous in agreeing it, Sharpe added. 

An adjustment to the price of category M medicines — which comprises more than 500 generic drugs — will see an increase of £10m per month from October 2014, equal to a rise in average item value of around 12p. But in November 2014, the community pharmacists’ practice payment, which is dependent on the volume of items dispensed, will be cut by 17p per item. 

The impact of these changes mean that a community pharmacist will be £870 worse off on average in the second half of the 2014–2015 financial year compared with the first half of the year, the PSNC calculated. 

The £2bn includes continued funding for the New Medicines Service (NMS) that brings it under core contract funding alongside Medicine Use Reviews (MURs). 

The percentage of MURs that have to be categorised within the three named clinical target groups is rising from 50% to 70%. Pharmacists will also be expected to target a new patient group — people with cardiovascular disease or who are at risk of developing cardiovascular disease. 

Other changes to the contract mean that, for the first time, pharmacists will be expected to include the name of their pharmacy in future patient safety incident reports made to the National Reporting and Learning Service. 

Community pharmacists will also be obliged to advise patients with stable long-term conditions about the benefits of using a repeat dispensing service. 

The PSNC has also agreed that pharmacies will take part in a national two-week audit of emergency supplies of medicines made by community pharmacists as part of an ongoing review by NHS England. 

The settlement is for one year only and in the coming months the PSNC hopes to develop the framework for 2015–2016. The PSNC says it is very keen to reach a settlement for 2015–2016 before April 2015.


  • This story was updated on 23 September 2014 to include comments from Pharmacy Voice.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2014.20066577

Readers' comments (4)

  • I totally echo the sentiments of Ash Soni, however “I think the PSNC probably fought as hard as they could, which is why I think it took so long to reach a settlement,” he says. “It’s probably been the best that they could do, but it’s not good.” - I think it's probably true to say that the PSNC fought as hard as they usually do...

    Perversely the funding settlement actually drives contractors further towards item numbers rather than service provision... by making them do more dispensing to be in with the remotest possibility of attaining the same revenues.

    Let's get the emergency supply audit out of the way ASAP and demonstrate the vital role that locally accessible community pharmacy plays to patient's lives and health. It must be swiftly followed by a national NHS emergency supply service to demonstrate PSNC and NHS England's commitment to a future of service based community pharmacy.

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  • Graham Phillips

    Utterly frustrating and totally disappointing. In some ways the money is the least of it. It's the total lack of vision and the complete failure to tap into the long-acknowledged "unexploited potential" of community pharmacy that is so hard to accept. At a time when the NHS is cash strapped and there's a desperate shortage of GPs there is a ready and willing pharmacy workforce. Surely its a no brainer ?

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  • Totally agree with Graham
    I wonder what on earth they have actually been negotiating about for two years?
    A missed opportunity to move towards a true service led contract and this settlement just makes prescription factories more inevitable.
    As for next years contract negotiations...... Oh there's a general election!

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  • Graham Phillips

    The last “re-disorganisation” lleft the NHS in disarray. In some areas the GPs are in melt-down. For example one local practice has collapsed for lack of GPs; another 2-partner practice has enough work for 3 GPs but cannot recruit a third partner or even find locums. 2 GPs are doing the work of 3. They are working 16h days. Sooner or later they'll make a serious error due to being overtired or end up ill themselves. The Royal College says we need 16,000 more GPs but the NHS doesn’t have the money to train or pay them. Even if there was the money there isn’t the time……..

    Meanwhile, pharmacists are in relative over-supply. Some cannot find work - some end up working as Technicians or even Counter-Assistants. Unlike "my" generation, these freshly-minted pharmacists have all the clinical and interpersonal skills to carry out enhanced and advanced services. They could quickly be trained up as prescribers and run clinics and common-ailment schemes in GP surgeries or pharmacies. They could be Healthy Living Pharmacists too and make a huge contribution to the Public’s Health. All that would be needed would be a modest additional investment by the NHS and we could have more than one pharmacist per pharmacy.

    Pharmacy could answer so many of the NHS’s problems. It seems like a no-brainer so what’s stopping it?

    Come on RPS lets have a strong campaign on this issue. If we all pull together we could transform our fortunes in the run-up to the next general election. If every grass-roots pharmacist and all the National bodies worked together we could mount a fantastic campaign.

    Patients and the public love pharmacy. They trust us the most. If patients demanded more from pharmacy the politicians would have no choice.

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