Q&A: Community pharmacy funding cuts in England – views from the front line

In light of the government’s intention to cut funding for the sector and reform the remuneration structure, we asked four people from four different community pharmacy backgrounds to share their views.

Illustration of a person cutting a pharmacy price tag

On 20 October 2016, health minister David Mowat announced the government’s planned funding cuts to community pharmacy in the House of Commons. He confirmed that funding will be cut by 4% for 2016–2017 to £2.687bn, with a further 3.4% cut planned for 2017–2018. Pharmacies in areas with fewer pharmacies and higher health needs will be protected from the impact of the cuts through a pharmacy access scheme, while up to £75m of the £2.592bn community pharmacy budget for 2017–2018 will be allocated to a new quality payment scheme from April 2017. But to qualify for the quality payment scheme, pharmacies will have to meet four criteria, including provision of least one specified advanced service and use of the electronic prescription service. 

To understand the potential impact of these changes, we asked four community pharmacy professionals from different parts of the sector for their thoughts on the government’s plans and what they will mean for them, their businesses and their patients. 


  • Cormac Tobin, managing director of Celesio UK
  • Ash Soni, community pharmacist and proprietor of two pharmacies, member of RPS English Pharmacy Board
  • Leonard Smith*, an employee pharmacist in a small independent chain in the north of England (*name has been changed)
  • Hiren Satra, part-time locum community pharmacist

What are your immediate plans in light of the government imposing cuts to funding to community?

Cormac Tobin: Celesio UK, a provider of integrated healthcare services to the NHS, comprises the UK-wide logistics network, AAH, as well as the LloydsPharmacy chain, so we are well aware of the impact of the funding cuts on all types of community pharmacy. No contractor is immune from the government’s decision, regardless of its size or ownership. Our immediate plan is to analyse the impact of the funding imposition and how the reductions affect each of our 1,800 pharmacies. We will be helping LloydsPharmacy employees to understand the changes and operational impacts, as well as what this means for their business bottom line. We are also reviewing the support that we give to our independent pharmacy customers through our Careway proposition to help them deal with the impact.

I will also try to reassure staff that their jobs should be safe and the business will continue

Ash Soni: The first step is to understand the impact this will have on the financial position of my pharmacies. Depending on what the calculations show, I will look at the services we provide and ensure the pharmacies are maximising the incomes available. I will also try to reassure staff that their jobs should be safe and the business will continue. Additionally, I will see what other opportunities exist to cover the financial shortfall.

Leonard Smith: Our immediate focus is on patient care. We will continue to do everything we can to ensure that the services we provide now will still be there once the changes have been implemented and thereafter. We have started to look at taking advantage of natural wastage — not immediately replacing members of staff who leave us but assessing whether there is a genuine need for them to be replaced like for like. We are thinking about employing relief dispensers and medicines counter assistants, who will be able to work in any of our pharmacies according to demand. This way, we can ensure we are still adequately staffed at peak times without being overstaffed during quieter times. Stock holding and buying deals will also be re-examined to ensure our dispensaries are working as efficiently as possible.

Hiren Satra: The immediate plan is to ensure that customers are served as best as we can without compromising quality and reassuring the general public given the current situation. As a locum I will have to be aware that my working conditions may become more stressful owing to potential staff cuts and I will have to balance my workload accordingly to ensure patient safety. In addition, members of the public will have to be educated as to the non-evidence-based rationale behind these cuts and how they could help us fight our case.

Will you have to cut services as a result of the cuts? If so, which ones?

Cormac Tobin: 
The impact on each pharmacy will be different, and we are looking at all of our pharmacies on a case-by-case basis. We will be doing everything we can to avoid any impact on services, although it is inevitable that there will be some change including how we implement the new contractual requirements.

Ash Soni: 
It is difficult to know the answer to this question. However, I will be reviewing all the services my pharmacies offer and ensure that the costs and income received make it justifiable to continue. Some services may end up being stopped or curtailed.

Leonard Smith: My hope is that services such as home deliveries, repeat prescription ordering and preparation of monitored dosage systems (MDSs) will continue but it would be foolish of me to think that we won’t have to look at viability. These services are not funded or contracted but that doesn’t mean they’re not important to patients and we will do what we can to continue providing them.

One option we’ve been looking at is to liaise with local care agencies to try to support the use of medicines from original packs. Nationally, there has been a big push for this to be the default position, with carers prompting patients to take medicines according to a medicines administration record sheet rather than using MDSs. As well as having obvious cost benefits for the pharmacy, the NHS stands to benefit, too. Any changes to patients’ medicine regimens can be implemented immediately rather than having to wait for the prescriber to generate a new prescription for all the medicines in the MDS, wasting the old MDS and the medicines it contains.

It would appear that the most vulnerable in society will end up suffering as a result of these cuts

Hiren Satra: 
It is inevitable that services will have to be cut. It is difficult to choose between them but dosette boxes and deliveries come to mind because these are not funded by the NHS. We may have to be pickier as to the criteria we use for these services. These services are currently self-funded and bear no cost to the Treasury as part of our contract. It would appear that the most vulnerable in society will end up suffering as a result of these cuts.

What opportunities do you see with these announcements?

Cormac Tobin: 
We were pleased to see that one of the quality payment criteria relates to pharmacy staff being trained as ‘Dementia Friends’. Celesio UK has proudly been supporting this initiative since 2014 by growing our own community of more than 4,000 Dementia Friends who have attended information sessions in order to help assist those affected by dementia directly within their communities. The stated aspiration to move away from a focus on dispensing and towards services will rightly ‘release the genius’ of pharmacists, although this will, of course, be informed by the clinical service review. Our pharmacists are integral parts of the communities they serve — not just because of their expertise, but also for their knowledge and understanding of the area and the patients who come into store. They are recognisable, friendly faces and play a key role in the health and well-being of local people, enabling them to live more positive lives.

Ash Soni: 
At this stage it is not easy to identify the opportunities — the potential of the pharmacy integration fund is still unclear. The main opportunities are out with the imposition. These are likely to be in working with local GPs, the clinical commissioning groups and local government about new services or identifying private services that the public are prepared to pay for.

I don’t see the pharmacy access scheme being fit for purpose

Leonard Smith: 
Our contract currently is far from perfect and reform is much needed. But these changes cannot come at any cost. Reduction in income associated with dispensing, via the single activity fee, and a reduction in establishment payments will threaten pharmacies across England. I don’t see the pharmacy access scheme being fit for purpose since it only takes into account dispensing volume and proximity to the next nearest pharmacy. If the government is serious about integrating pharmacy and promoting it as an essential part of the NHS, bring it on! We have the ability to take pressure off other areas, such as A&E and general practice. A nationally commissioned minor ailments service with a referral pathway would help enormously, but, as ever, it would need to be properly funded.

Hiren Satra: At the moment the future looks bleak. The oversupply of pharmacists, coupled with the potential closure of thousands of pharmacies, will certainly devalue the role of a locum pharmacist. I see a massive cut in locum rates looming. The only opportunity would be to leave the profession to pursue a different career path. On a positive note, hopefully all our disparate professional and business pharmacy bodies might unite on a common ground to secure the future of pharmacy.

Which areas in community pharmacy do you see as having potential to improve efficiency?

Cormac Tobin: 
We fully support the ‘Community pharmacy forward view’, which articulates the areas where pharmacy can make the most impact, if provided on a national level. These are: pharmacy being the first port of call for common ailments, pharmacy playing a significant role in supporting people with long-term conditions, and pharmacy being the health and well-being hub of the community. The document highlights that all these things are happening in pockets around the country, where the efficiency improvement comes from is having this delivered consistently and at scale. The government has said it will encourage local commissioning of minor ailments next year. It’s only fair to the people who are struggling to access primary care every day and our overstretched GP colleagues to mandate this, and as soon as possible.

As with all private contractors, there’s no bottomless pit to bail us out if there’s a financial shortfall

Ash Soni: Pharmacy has exhibited significant efficiencies in the past decade and more. All the savings that community pharmacy has generated in medicines procurement have been used to underpin overspending in other parts of the health economy. This has been recognised by the National Audit Office and in the latest KPMG report. Expecting pharmacies to continue to create efficiencies without investment in new models of care and funding is expecting blood from a stone. There are some who believe that hub-and-spoke systems will increase efficiency but there is no evidence that this is in financial terms.

Leonard Smith: 
We are already hugely efficient. As with all private contractors, there’s no bottomless pit to bail us out if there’s a financial shortfall. We have saved around £1bn a year on generic medicines buying since the introduction of the current contract through Category M. We have an incentive to buy generics as cheaply as possible, something that benefits the NHS budget. If there are to be only a few central dispensing hubs as proposed, what will happen to the drugs bill? The current set-up will be destroyed, there will only be a few wholesalers able to supply medicines as the governments want, reducing competition and leading to the NHS paying more for medicines.

Hiren Satra: Pharmacy is as efficient as it can get. The government has tinkered with funding over a number of years and there comes a point where it is difficult to become more efficient. We need to move from a transactional model to a service-based model, with individual pharmacists holding contracts just like GPs and, like them, the current premises would still hold contracts. This will increase both efficiency and accountability. However, this will require a complete change of mind set by all our professional and negotiating bodies together with our paymasters.

What sort of feedback have you had from patients about the government’s announcements?

Cormac Tobin: I have spoken to many patients who are concerned about the future of their pharmacy. They have built up strong and lasting relationships with pharmacists because they are the people whom they see most out of all the NHS contacts they may have. This is testament to the passion that community pharmacists and their teams feel for delivering healthcare. The people who use pharmacy most often are vulnerable, owing to age or ill health, and they really do value the services and support they get from their pharmacy team. Patients are concerned that the government’s policy will reduce the services they get and undermine the relationships they have built up, over years in some cases.

We have suggested that we may need to start to charge for some services

Ash Soni: 
Customers have come in to express their support but they fail to understand why this has happened. They have expressed concerns that the pharmacy may close and we try to reassure them that we don’t believe that is the case. However, we have suggested that we may need to start to charge for some services that historically have been provided at no charge. This is not just patients but also other health professionals, including doctors and nurses, who feel that this undermines the rhetoric of the importance of pharmacists in improving patient outcomes.

Leonard Smith: 
Patients are rightly scared that they will lose their local community pharmacy — the pharmacy they’ve been using for years and the healthcare professionals who know them and who they know. For some of the more vulnerable in today’s society, the only reason they are able to live an independent life is because of the services they receive from their local pharmacy and I don’t know how the government feels that it can put a price on this. Patients may not have internet access but can still ring their pharmacy for their regular medicines. We go through their regular items and make sure they actually need what they’ve asked for and check they’re not missing anything they need. They may have complex medicine regimens that, without an MDS or reminder chart, could mean relying on an external carer.

Hiren Satra: We have had a lot of support from our patients who are writing to their local MP about our predicament and say they would be devastated to lose us. This is as a result of goodwill built over many years.

What are your views on the quality payment scheme?

Cormac Tobin: 
We do value quality, and this is of utmost importance when delivering pharmacy services. The quality payment aspects of the new contract will help to raise the bar for community pharmacy provision and hopefully underpin the commissioning of services in the future. There is, however, a significant amount of investment required from contractors to fulfil the quality criteria, and when the sector has had such arbitrary and substantial cuts to funding, this money may be difficult to find. Indeed the quality payment scheme is not an opportunity to earn extra money to plug the gap in funding. It is part of the new global sum so contractors will need to engage fully just to stand still in the new world.

A significant amount of investment is required from contractors to fulfil the quality criteria

Ash Soni: The quality payment scheme is one potential area of good news. It does not compensate for the loss in income from the core funding cut. However, if it is developed and grows into a more substantial part of community pharmacy funding it will reward improving quality but it must be adding to current funding in the same way as quality outcome frameworks for GPs was an additional income stream.

Leonard Smith: Anything to improve the outcome of patient health can only be a good thing and increasing minimum standards expected of pharmacies will give both commissioners and the general public increased confidence that the services we provide are of a high quality. However, a couple of the criteria that need to be met to access the scheme give me cause for concern. First, in the past we have had issues trying to get access to generic NHS Mail accounts for individual pharmacies. Only individuals have been able to apply in the past. Second, pharmacies sited close to surgeries that do not use the electronic prescription service may be denied access to the scheme through no fault of their own. Here in the north of England, there are still a large proportion of surgeries that, despite success elsewhere in the area, do not use electronic prescriptions. As long as pharmacies are not blocked from entering into the scheme owing to factors outside their control, I’m all in favour of the quality payment scheme.

Hiren Satra: 
I agree with the quality payment scheme but, as it stands, it appears to be a tick-box exercise based on our current transactional model. Quality payments should be attributed to individuals as well as premises and should have different parameters attached to each.

Last updated
The Pharmaceutical Journal, PJ, November 2016, Vol 297, No 7895;297(7895):DOI:10.1211/PJ.2016.20201942

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