Community pharmacies to receive an additional £50m loan to mitigate COVID-19 pressures

The Pharmaceutical Services Negotiating Committee has announced that community pharmacies will receive an additional £50m in funding on 1 June 2020, but the money will eventually have to be repaid.

covid19 community pharmacy

Community pharmacies will recieve a further £50m of advance funding from the government to help with cash flow pressures during the COVID-19 pandemic, the Pharmaceutical Services Negotiating Committee (PSNC) has announced.

In a statement published on 28 May 2020, the PSNC said that the NHS Business Services Authority (NHSBSA) was calculating payments with the intention of paying the £50m loan at the same time as the contractors’ payment on 1 June 2020.

The payment follows the £300m in advance funding already paid to contractors this year in recognition of COVID-19 related cash flow challenges.

The NHSBSA clarified that, similar to the £300m uplift, the £50m was “not additional funding over and above what was agreed for 2020/2021 under the Community Pharmacy Contractual Framework five-year deal” and would be reconciled in 2020/2021.

It added that the mechanism and time period over which the reconciliation would take place had not yet been agreed by the PSNC.

In its announcement, the PSNC said that it was “continuing to highlight to the NHS and HM Government the urgent need for extra funding for the sector”, which included seeking to prevent contractors having to repay any of the advance payments that they have so far received this year.

The PSNC reiterated that its bid for extra funding was “currently being considered by HM Treasury”.

Simon Dukes, chief executive of the PSNC, said the latest £50m advanced payment “should help to ease some of the immediate cash flow and procurement pressures on businesses”.

“We do not know how this pandemic will develop and the long-term effects it will have on pharmacy, but we will continue to gather evidence of contractors’ costs and other financial pressures and to press for margin adjustments and further financial assistance wherever we have a case to do so.”

Dukes previously warned on 16 March 2020 that pharmacies are on “the brink of collapse” owing to the financial strain of the COVID-19 pandemic, with pharmacy bodies calling for an extra £200m to stay afloat.

Mark Lyonette, chief executive of the National Pharmacy Association, said the additional advanced funding “makes talks on cost recovery even more urgent”.

“We need assurances on the medium-term position, because this new advance effectively increases the level of pharmacies’ debt to government,” he said. “Many independent pharmacies will struggle to pay it back and should never be asked to do so.”

Claire Anderson, chair of the Royal Pharmaceutical Society English pharmacy board said that while the funding may help pharmacies to stay open it was “another stop-gap measure” and should be coming from new money, rather than an advance payment.

“The government should review this as part of a fair funding settlement for the longer-term,” she said.

“The ‘new normal’ for the NHS coping with COVID-19 will need a contract which makes the most of pharmacists’ clinical skills to support patients, improve medicines safety, and help people stay healthy and out of hospital.”

The NHSBSA said that pharmacy contractors should be aware that the uplift would not show on their schedule of payment, but that it would be sending a letter to each contractor outlining the additional payment.

Last updated
The Pharmaceutical Journal, PJ, June 2020, Vol 304, No 7938;304(7938):DOI:10.1211/PJ.2020.20208014

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