Government to claw back £48m from pharmacy contractors in England on top of cuts

Community pharmacy organisations have expressed significant concern over proposals from the Royal Pharmaceutical Society (RPS) to restructure the national pharmacy contract in England to promote more integrated working with GPs

The government is clawing back £48m from community pharmacy contractors in England over the next four months, with the possibility of more cuts after October 2016, national negotiators have revealed.

The reduction in reimbursement prices for generic medicines listed in Category M of the Drug Tariff — £12m a month from June 2016 to September 2016 — is a move by the Department of Health to reclaim an overpayment to contractors above the agreed allowance of £800m in 2015–2016. The department plans to consider future funding in October 2016 in discussion with the Pharmaceutical Services Negotiating Committee (PSNC), the negotiating body for community pharmacy contractors in England.

The PSNC acknowledges that the Category M margin levels were high in 2015–2016 year but rejects the cut in reimbursement.

The announcement is a further financial blow to community pharmacists in England and comes as the PSNC admits it is making little progress in persuading the government to drop its planned £170m cut to the 2016–2017 pharmacy budget.

Peter Cattee, chair of the PSNC’s funding and contract sub-committee, says ministers have little interest in commissioning additional services from community pharmacy.

“The government appears unshaken in their determination to remove a sum of £170m from community pharmacy funding this year, and to do so via reductions in fees and allowances.

“We are very pessimistic about the outcome of the consultation on community pharmacy’s future,” he adds. “We are also very concerned that the NHS and government have not been clear about their aims… We strongly advise all contractors to make whatever provisions they can for the funding reductions.” 

Meanwhile, Community Pharmacy Scotland, which represents community pharmacy owners in Scotland, has secured an extra £1m for the profession in 2016–2017 following successful negotiations with the Scottish Government.

Last updated
The Pharmaceutical Journal, PJ, May 2016, Vol 296, No 7889;296(7889):DOI:10.1211/PJ.2016.20201155

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