Government considers writing off £370m advance COVID-19 funding for community pharmacies

The Department of Health and Social Care has proposed a package of pandemic-related funding measures to pharmacy negotiators and is also considering writing off advance payments.

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The government is considering writing off advance payments of £370m given to community pharmacies in England to deal with cash flow pressures caused by the COVID-19 pandemic.

During a webinar for community pharmacists on 12 November 2020, the Department of Health and Social Care (DHSC) said this was one measure that the government was looking at, alongside a package of pandemic-related funding measures that it has proposed to the pharmacy negotiator.

This follows a video message from Simon Dukes, chief executive of the Pharmaceutical Services Negotiating Committee (PSNC), to pharmacy contractors on 15 May 2020, which said a bid for extra funding to cover costs associated with the pandemic had been submitted to the Treasury.

Dukes later told The Pharmaceutical Journal, on 9 November 2020, that the almost six-month delay in agreeing extra funding for the community pharmacy sector was “bewildering”, and that “HM Treasury and others appeared determined to constrain the amount of compensation that is offered to pharmacy businesses”.

But Jeannette Howe, head of pharmacy at the DHSC, said during the webinar for community pharmacists that the government had “put a proposal to the PSNC” for funding to cover costs “incurred in relation to COVID such as staff cover”, adding that this proposal is “under active discussion”.

“You will have seen that the PSNC is making the case that the £370m advance should not be reclaimed from community pharmacy and those representations are also being carefully considered by the department,” she added.

The DHSC announced in March 2020 that it would be providing £300m in advance funding to community pharmacies, but it insisted that this would have to be repaid. Since then, the government has announced an extra £70m in advance funding.

It also increased medicine reimbursement prices by £15m in June 2020 as part of its annual adjustments to ensure community pharmacy received the planned margin payment of £800m.

“We acted very quickly at the start of the pandemic to put extra advance funding in to address the cash flow difficulties that we knew community pharmacy was facing, and over those early months we put in £370m in terms of extra advance payment,” Howe said.

“We have also funded specific activity and services, such as the medicines delivery service; and we have also been addressing the PPE [personal protective equipment] point in terms of it now being available free, and looking to reimburse where PPE has been previously purchased.”

Commenting on Howe’s remarks, Dukes said: ”High-level negotiations on community pharmacy contractors’ COVID-19-related costs have been challenging throughout. The community pharmacy sector has done phenomenal work during the pandemic and this has yet to be recognised with offers of funding from HM Government that PSNC can agree.

”PSNC has presented its case as business data, analysis, projections, case studies and strong value arguments to officials: we are waiting for a response to our latest proposal on COVID-19 costs, and also to our separate bid for an uplift to CPCF [Community Pharmacy Contractual Framework] funding.”

Last updated
The Pharmaceutical Journal, Government considers writing off £370m advance COVID-19 funding for community pharmacies;Online:DOI:10.1211/PJ.2020.20208549

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