‘A once-in-a-generation opportunity’: what community pharmacy wants from contract reform 

The 2026/2027 ‘Community pharmacy contractual framework’ (CPCF) for England has outlined a significant increase in funding for the sector. The 10.3% increase from £3,296m to £3,636m outdid the NHS’s funding increase as a whole.

While Community Pharmacy England (CPE) has acknowledged that “ministers have treated pharmacy preferentially for the second year running”, it also conceded that the amount “does not make further significant progress towards delivering sustainability to an increasingly unstable sector”. 

What clinched the deal for the pharmacy negotiators was a commitment from the government to work with CPE on a programme of sector reform, which will “build the strategy for community pharmacy and explore alternative contract, funding and reimbursement models”. 

Janet Morrison, chief executive of CPE, told The Pharmaceutical Journal on 29 June 2026 that it was “working with the Department of Health and Social Care to shape a forward-looking programme of community pharmacy contractual reform, centred on strengthening the sustainability of the sector”. 

“This will require a more effective medicines margin framework in the short term, alongside a fundamental review of the current reimbursement model against alternative approaches.” 

“It will also involve re-examining the clinical services offered across the network, with a clearer steer on national and local commissioning and funding architecture that supports greater clinical contribution,” she said. 

“In parallel, we will reassess how dispensing works within a modern medicines optimisation model, and pursue regulatory reform that removes barriers, enables innovation and supports effective patient access.” 

Morrison emphasised that constructive engagement with the sector is essential to the programme of reform, adding that CPE would be inviting “all sector bodies to put forward their ideas and have already begun collating pharmacy owners’ views”.

In an interview with The Pharmaceutical Journal, published on 17 June 2026, Morrison recognised that different people would want different outcomes from an overhaul of the community pharmacy system.

“If I took 20 people in a room and I say: ‘What do you mean by contract reform?’, I’d get 20 different answers,” she said.

Sustainable foundation

Funding is foremost in the collective mind of community pharmacy when it comes to highlighting the changes needed. 

“We’ve been pushing for contract reform over some years now because pharmacies feel the current system is broken, unfair and contributes to financial instability — in turn threatening services for patients,” says Gareth Jones, director of external affairs at the National Pharmacy Association (NPA). 

“We want to see root-and-branch reform that gives pharmacies financial stability, much greater certainty and transparency over their finances and contributes to what we all want to see, which is a shift of care into the community.”

Meanwhile, Leyla Hannbeck, chief executive of the Independent Pharmacies Association, says that “any reform of the CPCF must put power back in the hands of pharmacies”.

“[Reform] must address the utterly absurd reality that pharmacies are often not adequately reimbursed for medicines dispensed and forced to operate at a loss,” she adds.

This is a long-standing issue for community pharmacy. In September 2024, a CPE survey of 900 pharmacy owners in England and 2,000 pharmacy team revealed that two-thirds of community pharmacies are operating at a loss.

Six months later, economic analysis of the sector by Frontier Economics and IQVIA revealed that nearly 80% of pharmacies were unsustainable in the short term.

For Ade Williams, lead pharmacist at Bedminster Pharmacy, Bristol and deputy chair of NHS BSW, Dorset, Somerset and Wiltshire ICB Cluster, the first priority of reform should be “securing a funding framework that reflects the true cost of providing NHS care and recognises the burden of being the NHS’s most accessible self-care, medicines and clinical care gateway”. 

“It must give contractors and pharmacy owners the confidence to invest in their workforce, premises and technology. Without a stable foundation, meaningful transformation will remain difficult and health inequalities risk widening further,” he explains.

Malcolm Harrison, chief executive of the Company Chemists’ Association (CCA), adds: “[Reform] must provide a sustainable foundation for the sector and enable pharmacies to deliver more for patients and the NHS.

“This should include a clear roadmap to close the acknowledged funding gap, with future funding for procurement and supply linked to rising costs and workload. It must also ensure the margin model reflects today’s buying behaviours, to improve distribution of available margin.”

The 2025 economic analysis also found that the full cost of delivering NHS pharmaceutical services exceeded funding by between £1.642bn and £2.975bn. Following the announcement of the current CPCF, the Office of Health Economics (OHE) warned that the margin write-off — agreed as part of the contract negotiations — “will be on the lower end of what is needed”. 

“For the shift to community-based healthcare outlined in the ten-year plan to succeed, future funding arrangements must encourage the delivery of services that improve health outcomes, reduce pressure on GP practices and hospitals, and make better use of NHS resources,” says Graham Cookson, chief executive of the OHE.  

Concern about the financial survivability of community pharmacy is not limited to those working in the sector. Speaking in the House of Lords on 2 June 2026, Baroness Janke said: “We often hear the community pharmacy described as the front door of the NHS, yet we are currently watching that door being systematically bolted shut in the communities that need it most. The scale of this crisis is staggering and, frankly, a damning indictment of a decade of financial neglect.” 

Cookson argued that a reformed contract should move beyond paying primarily for dispensing activity and reward pharmacies for the value they create for patients and the wider NHS.

“The challenge will be designing incentives that support innovation and local flexibility while ensuring public money is directed towards interventions that deliver measurable benefits for patients,” he added. 

“Put simply, the new contract should align financial incentives to the health outcomes we want to achieve in our communities.”

Prevention agenda

The ten-year health plan for England promises a shift in focus from sickness to prevention, and many want to see that emphasised in pharmacy reform.

“We have a unique opportunity to improve access to care closer to home while reducing pressures elsewhere in the NHS,” says Williams.

“[The contract should] support a shift towards patient management and outcomes-based care, recognising the contribution community pharmacies make to prevention, medicines optimisation, long-term condition management and reducing health inequalities,” he adds.

“Independent prescribing should become a funded core element of NHS community pharmacy practice, supported by appropriate clinical governance, workforce development, training and infrastructure.”

Alastair Buxton, director of NHS services at CPE, said on 2 June 2026 that during this year’s contract negotiations, the government turned down proposals for a national enhanced prescribing service to help integrated care boards (ICBs) commission those services. Instead, Buxton said that NHS England would issue guidance to support ICBs and pharmacy owners to support the introduction of prescribing within existing national services.

As part of the prevention agenda, Hannbeck would like to see vaccination “firmly rooted in community pharmacies, easing pressure on GP surgeries while making the most of a trusted, accessible healthcare network”. 

Others share this view. In May 2026, the NPA called for pharmacies to be used to help reform “outdated” childhood vaccination programmes, as part of urgent action needed for outbreaks of preventable diseases. The call was followed by an NHS England announcement, published in June 2026, that it will be commissioning community pharmacies in England to offer thousands of young people the two-dose meningococcal B disease vaccine before the start of the 2026 academic year. 

Future pharmacy services

Harrison said that reform should “support the development of new clinical services, including prescribing-led services, and ensure patient access is protected through a modern, digital-first approach to pharmaceutical needs and market entry”.

The ‘positive pharmacy care law’ suggests that there are more pharmacies in areas of higher deprivation, compared with areas of lower deprivation. However, research published in 2025 has found that this advantage in accessing hard-to-reach communities is being eroded with more pharmacies closing in deprived parts of England.

Williams believes that “any reformed contract must recognise the unique role community pharmacies play in disadvantaged communities”. 

“Pharmacy is often the most accessible healthcare setting, and reform should harness that reach to improve population health, tackle inequalities and strengthen neighbourhood healthcare delivery,” he says.

Wiliams also notes that the emerging neighbourhood health model “presents a significant opportunity, but community pharmacy must be included as a core partner rather than an optional stakeholder”. 

“Mandating the inclusion of local community pharmacy within neighbourhood partnerships would be a logical, cost-effective first step before exploring more radical devolution and commissioning ideas, including clinical services and pathway delivery models,” he says.

“[The desire is] to not just survive, but to grow and offer more services to their local communities.”

Involve the workforce

However, to broaden their services, pharmacists say they need more support. The sector is keen to provide more for patients but needs the funding to do so and wants to be part of the conversation around how this will actually be delivered. 

“Services designed without frontline input risk being under-resourced, impractical and unsafe, with consequences for both pharmacists and patients,” says Alison Jones, director of policy and communications at the Pharmacists’ Defence Association (PDA). 

“While a reformed contract offers a significant opportunity to embed pharmacy more firmly within primary care, this can only be achieved if reforms reflect real-world working conditions, are properly funded and paced, and are supported by a clear workforce strategy.”

Jones highlights a 2025 PDA survey, which “found that 98% of pharmacists expect their representatives to be included when new services are planned or existing ones expanded, yet current negotiations are limited to government and employer bodies, excluding those who will deliver care in practice”. 

“The PDA is therefore calling for a shift beyond purely financial discussions towards a collaborative approach that prioritises safe, sustainable service delivery and unlocks the full clinical potential of the profession,” she adds.

Hannbeck explains that it is crucial that “future contract negotiations properly reflect the views and experiences of pharmacy owners who are directly impacted by these decisions”. 

Sector input is certainly something that CPE agrees on. It says it will be “inviting all sector bodies to put forward their ideas to plot a new direction of travel for the sector”.

On 9 June 2026, CPE opened a poll in which independent pharmacists and non-CCA multiples can share their views on the agreed contract. 

Alongside that, CPE has said that in-person events, running from June to August 2026, will give attendees “opportunities to learn more about the implications of the new funding settlement, ask questions of the team and share views on the future reforms programme”. 

Pharmacy minister Stephen Kinnock, speaking at a Westminster Hall debate on the future of community pharmacies on 2 June 2026, thanked CPE for the “the incredibly constructive way in which they engaged with myself and my team around the contract negotiations, and about the strategic thinking that needs to go into long term reform”.

It is clear the sector stands ready to join in that strategic thinking on reform. “Community pharmacy contract reform presents a once-in-a-generation opportunity to redefine the sector’s role within the NHS,” says Williams. 

“The conversation must move beyond simply funding individual services and instead focus on creating a sustainable model that delivers better outcomes for patients, communities and the taxpayer.”