Pharmacy negotiators strike deal allowing contractors to claim for COVID-19 costs

The Pharmaceutical Services Negotiating Committee has struck a deal with the UK government, meaning that all community pharmacy contractors in England can claim for COVID-19 related costs.

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Community pharmacy contractors in England will soon be able to claim for a range of costs incurred during the COVID-19 pandemic, following a deal between the Pharmaceutical Services Negotiating Committee (PSNC) and the government.

However, as part of the deal, contractors will be required to repay the £370m advance payments received in 2020.

This is despite comments from the Department of Health and Social Care (DHSC) in November 2020 that suggested the government was considering writing off the loans.

In a statement published on 28 June 2021, the PSNC said the offer means that contractors can now claim for costs incurred during the 13-month period between 1 March 2020 and 31 March 2021.

Under the deal, contractors can claim for additional staff costs owing to COVID-19; costs incurred to make premises COVID-19 secure; IT and communication costs to support home working and virtual patient contact; and notified closures for infection control purposes for a maximum of 14 days.

However, the PSNC’s statement said that HM Treasury “insisted” that the sector pay back the £370m advance payments, which were distributed in 2020.

The DHSC plans “to take back repayments in six equal monthly sums” from October 2021, but the negotiator will have “a further discussion on this in due course”, the statement added.

The PSNC said the terms of the loan repayments will depend on the amounts claimed and is subject to “some further negotiation”.

The deal comes after the PSNC had previously rejected an offer of funding to help pharmacies with costs related to COVID-19 in the summer of 2020.

The negotiator described the latest deal as “much improved” after the initial offer only proposed to accept claims from within a three-month window, excluded non-staff costs and capped the total value of claims at £120m.

Under the new deal, multiples can now also make a single claim per business, whereas the original offer had sought a separate claim per branch.

Claims should be made to the NHS Business Services Authority between 5 July and 15 August 2021, with payments for claims due on 1 October 2021.

Simon Dukes, chief executive of the PSNC, said he hoped that “after many months of frustration and uncertainty”, it would be a “relief to community pharmacy contractors to hear today that we have reached a deal on COVID-19 costs for the sector”.

Dukes said the deal is “not quite what PSNC had asked for: we wanted contractors’ COVID loans simply to be written off against the costs they have incurred during the pandemic”.

“But this was rejected outright by HM Treasury and this deal is the best one we could get, giving every contractor a fair chance at having their costs covered”.

The PSNC’s focus now, Dukes said, would be on “helping contractors to make robust claims that cover as many of their costs as they can”.

He added that it is “critical that every contractor who has borne costs makes a claim — they need this money, and we need them to show HM Government the sorts of costs that pharmacies have absorbed, in good faith, to help the NHS through this crisis”.

Leyla Hannbeck, chief executive of the Association of Independent Multiple Pharmacies, said that “the decision to allow pharmacies to claim for 13 months’ worth of costs over the course of the pandemic versus the three months suggested previously would make a big difference”.

“Throughout this crisis, community pharmacies have remained open, fulfilling healthcare needs. During that time, they’ve run up enormous bills as a result, and it’s only right that is now recognised and they’re properly reimbursed.”

Mark Lyonette, chief executive of the National Pharmacy Association, said: “It’s good that the government has finally listened to our repeated appeals for a decision about how COVID-19 costs will be repaid to pharmacies in England. We look forward to examining the fine print of these arrangements.

“It shouldn’t have taken battle buses, petitions, newspaper campaigns and public protests by NPA [National Pharmacy Association] members to get us to this point,” he said.

“This is no more than our members deserve — after all pharmacies bore COVID costs in good faith that they would be repaid, in the service of the nation.”

Last updated
The Pharmaceutical Journal, PJ, June 2021, Vol 306, No 7950;306(7950)::DOI:10.1211/PJ.2021.1.93522

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