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.  

Community pharmacists disappointed with settlement on new pharmacy contract

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.
Last updated
The Pharmaceutical Journal, PJ, 27 September 2014, Vol 293, No 7829;293(7829):DOI:10.1211/PJ.2014.20066577

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