Community pharmacy funding will not be cut by £33m for the 2018/2019 financial year as expected and will instead be maintained at £2.59bn, the Pharmaceutical Services Negotiating Committee (PSNC) has announced.
The single activity fee will be lowered from £1.29 to £1.26 from November 2018 in order to “keep within the funding envelope” and deliver the £1.79bn in fees and allowances, but this will remain under review by the PSNC and Department of Health and Social Care (DHSC) throughout the rest of 2018.
In addition, Category M prices will reduce by £10m per month from November 2018 until March 2019 in order to repay excess margin earned by pharmacies in previous years. In particular, there was a significant over-delivery of margin in 2015/2016.
After March 2019, the PSNC will meet with the DHSC again to decide the next steps.
In a press release, the PSNC said that the funding offer had been accepted unanimously after “a lengthy and difficult debate” in recognition of the difficulties faced by contractors, as well as its need to rebuild constructive working relationships with the government after a “two-year hiatus”.
Simon Dukes, chief executive of the PSNC, said: “We know that many community pharmacy contractors will be disappointed to hear that there is no more money available for pharmacies this year, and accepting this funding offer was a difficult decision for the PSNC to make.
“But, we were very mindful of the proposals we had seen previously to reduce funding by £33m this year, and in that context, along with the backdrop of uncertainty in the wider economic climate, we knew that pharmacy was not going to get a better offer from HM government.”
At a press briefing held at the PSNC’s London offices on 22 October 2018, Mike Dent, director of pharmacy funding at the PSNC, said the settlement was “quite awkward” because, although it was “on the one hand good news”, it still provided a challenge for contractors.
“We have to acknowledge that the minister could have cut funding and chose not to,” he said.
Dent also noted that the settlement announcement was “very late” as a result of delays caused by the judicial review appeal into community pharmacy funding, as well as a change in minister.
He added that the PSNC was trying to get away from one-year funding settlements and had “an explicit ambition” to agree multi-year settlements in the future in order to “deliver predictability to contractors” and enable them to plan ahead.
In its announcement, the PSNC said it had expressed its desire to begin negotiations on community pharmacy funding for 2019/2020 and beyond “as soon as possible”.
The negotiator will be holding a funding webinar at 7pm on 30 October 2018 to give community pharmacy contractors the opportunity to ask questions about the funding settlement.