Community pharmacies in England have received a 10% uplift in funding for 2026/2027 — a greater annual increase than other parts of the NHS. However, pharmacy representatives say it still falls short of reversing years of underfunding, stabilising the sector or supporting growing demands on the network.
Sections
Global sum
Figure 1: The total value of the 2026/2027 contract is £3.636bn
Figure 2: How does this compare to 2025/2026? (£m)
In 2026/2027, a total of £3.636bn will be available to the community pharmacy sector. This funding will cover essential and advanced services, including dispensing, contraception, Pharmacy First and new prescribing services.
The single activity fee has increased by 6 pence from £1.46 in 2025/2026 to £1.52 in 2026/2027, backdated to take effect from May 2026.
Other activity fees remain unchanged (see Table 1).
Table 1: Activity fees for 2026/2027
According to Janet Morrison, chief executive of Community Pharmacy England (CPE), the 10% increase in overall funding from 2025/2026 “is significant in a tight government spending envelope and should not be dismissed”.
But while the negotiator has accepted the deal, that “does not mean we think it is enough — for this year or the future”.
In a press release issued on 29 May 2026, Morrison said: “We have been clear with government that the sector is in a critical position, and that we now need urgent work on a sustainable long-term solution, including reform of the contract, funding and reimbursement model.
“As part of this deal, [the government has] committed to work with us on this programme of work.”
Capping and bundling
The contract has maintained some caps for the Pharmacy First clinical pathways, while also introducing new caps for high-volume pharmacies. Pharmacy First, the hypertension case-finding service and the contraception service remain bundled as into one single national service.
Table 2: Capping and bundling for 2026/2027
Prescribing service
As promised in the Labour government’s pre-election manifesto, the new contract says that from autumn 2026, community pharmacist prescribers will be able to:
- Prescribe within the existing Pharmacy First clinical pathways and the pharmacy contraception scheme;
- Provide up to five new Pharmacy First prescribing-only pathways, which have not yet been announced and will be approved by a clinical reference group before roll-out;
- Prescribe an alternative item where there is a need to meet the needs of an individual patient; for example, where there is a supply chain issue relating to the original prescription and there are arrangements in place with the original prescriber to allow such an approach.
The move was welcomed by Amandeep Doll, director for England at the Royal College of Pharmacy, who said: “Enabling appropriately qualified pharmacists to assess, treat and prescribe for patients directly is a positive step towards delivering more care closer to home.
The government must continue to build on today’s settlement
Amandeep Doll, director for England at the Royal College of Pharmacy
“It reflects the growing clinical capability of the pharmacy workforce, already demonstrated through Pharmacy First, and will improve access to treatment and the patient experience. New prescribing services must be adequately supported to avoid a postcode lottery for patient access.”
However, she added that “the government must continue to build on today’s settlement”.
“The shift to prescribing also brings greater clinical responsibility and time pressures. Its success will depend on sufficient investment in workforce training and capacity, protected time for professional development and system leadership, and strong clinical governance to ensure high standards of care. Without this, there is a risk that the ambition for prescribing in community pharmacy will not be fully realised.”
Prescribing pharmacies will get a one-off setup payment of £500 and a monthly infrastructure payment of £525, alongside Pharmacy First and contraception consultation payments as outlined in Table 1 and Table 2.
But Mike Hewitson, a CPE committee member and a representative for the National Pharmacy Association, said the funding for the new prescribing service “will not be enough for many pharmacy owners to take on the additional clinical responsibility”.
This concern was raised during CPE’s contract negotiations with the government. A statement released by CPE on 29 May 2026 said: “It will be down to pharmacy owners to decide on an individual basis whether they want to provide the service or prioritise the use of IP [independent prescribing] skills elsewhere in their business.”
“In negotiating with government, we faced impossible choices,” Hewitson added. “By accepting this deal, we hope to signal our continued commitment to IP, and we will now lobby hard for further investment so it can become a genuine success from the next financial year onwards.”
The Pharmacists’ Defence Association (PDA) raised concerns that “employed and locum pharmacists practicing in the community sector are already operating at full stretch”.
Introducing prescribing into Pharmacy First is not a minor extension — it is a significant further increase in clinical responsibility
Spokesperson for the Pharmacists’ Defence Association
“Introducing prescribing into Pharmacy First is not a minor extension, it is a significant further increase in clinical responsibility that requires time, staffing and appropriate facilities,” a spokesperson for the PDA told The Pharmaceutical Journal on 29 May 2025.
“Without explicit commitments on workforce and operational models being part of the agreement, there is a real danger this expansion will be forced upon overstretched environments where one pharmacist is already expected to do everything at once, a scenario which is neither safe nor sustainable.”
Regulatory changes
The contract also includes several regulatory changes, including allowing pharmacies to close for up to four hours a month to support staff training (with more detail to be established from October 2026) and giving contractors up to three months to claim payment for Pharmacy First and new medicine service consultations (to be introduced from June 2026).
The Department of Health and Social Care (DHSC) also said it would review and update the Pharmacy Access Scheme, implementing any changes from 2027/2028.
It also pledged to explore possible actions, including potentially terms of service changes, to:
- Help protect pharmacy staff from patient abuse;
- Help address inappropriate management of electronic prescription service nominations by a small number of pharmacy owners.
Reform
As part of the contract negotiations, CPE said it obtained a commitment from the government to take part in a “joint programme of reform”, to “support a sustainable and resilient community pharmacy network”. As part of this, the government and negotiator have planned further work to review elements of the contract including reimbursement, margin distribution and dispensing at a loss — after the escalating cost of medicines left pharmacies paying out of pocket and price concessions at a three-year high.
The DHSC also said it would explore how the contractual framework can recognise and reward sustainable purchasing behaviours. It promised to engage with integrated care boards on branded generics prescribing and re-evaluate Pharmacy First caps.
CPE said the commitment to work together on reform “was a significant factor in the Committee’s decision to accept the settlement”.
Peter Cattee, negotiating team member, chair of the funding and contract subcommittee, and a non-CCA multiple representative, said: “We will push DHSC to review the current funding model, tackle loss-making dispensing and ensure core NHS services are economically sustainable. There must also be meaningful engagement on network capacity and future planning to secure long-term structural stability.”
In 2025, a NHS England-commissioned analysis of the community pharmacy sector revealed that 78% of pharmacies did not have sufficient funding to cover the costs of delivering NHS services “in the short run”, while 99% would not have enough to cover the cost of NHS services “in the long run”, defined as three to five years.
Reactions to the contract
Commenting on the new contract on 29 May 2025, Olivier Picard, chair of the National Pharmacy Association, said the organisation was “concerned that it does very little to close the £2.5bn funding gap that the NHS itself identified a year ago”.
“Ministers pledged that last year’s uplift was a first step to bridging that gap, and this year’s uplift, while above headline inflation, will be mostly eaten up in increasing costs so we’re clear that action is still needed to put the network on a sustainable footing,” he added.
Picard also called for prescribing services to be expanded beyond minor ailments to the management of long-term conditions.
Leyla Hannbeck, chief executive of the Independent Pharmacies Association, welcomed the addition of prescribing to the contract, but said: “Patients will only feel the benefits of empowering pharmacies to do more if the doors of their local pharmacy remain open.”
The funding package falls significantly short of what is required to protect pharmacies and patients
Leyla Hannbeck, chief executive of the Independent Pharmacies Association
“The funding package falls significantly short of what is required to protect pharmacies and patients — it is unsustainable for community pharmacies. Many will no longer be able to effectively subsidise the NHS and will be faced with no alternative but to close,” she said.
“The government’s welcome ten-year vision for a neighbourhood health service will fail if the front door to the NHS slams shut in the communities that need it most.”
In a LinkedIn post published on 29 May 2026, pharmacist Aditya Aggarwal said he was “excited by the expansion of the Pharmacy First scheme to include five more conditions”, having “seen how much patients value this when used correctly and the time it can save the NHS”.
But on the same day, Daniel Lee, founder of Pharmacy2U, HubRx and CloudRx, was less complimentary in his commentary.
“It’s a travesty that we’ve all been building clinical capacity for the IP service to be given such a paltry sum,” his post said.
