The next review of pharmacy funding under the contractual framework in England must result in funding sufficient to ensure progress towards a service–led future, which is a founding principle of the current five-year deal, according to the National Pharmacy Association (NPA).
At NPA board meetings on 25-26 April, it was argued that inflationary pressures are eating into funds available for investment in pharmacy services and that NHS England (NHSE) is duty-bound to redress the matter.
The current five-year deal between PSNC, NHSE and the Department of Health and Social Care capped core income at £2.592 billion. The NPA calculates that, had the global sum increased in line with inflation (including future projections) throughout the five years of the deal, more than £1.2bn in funding would flow to community pharmacy by 2024.
In fact, the real level of inflation for pharmacy businesses is likely to be even higher than the CPI inflation rate, which today hit 9 per cent.
Staff and locum costs in the sector and medicines costs have risen dramatically. Earlier this year, the NPA drew attention to a 71 per cent increase in the cost of employing locum pharmacists in England, from the 2020 average to the second half of 2021.
NPA chief executive, Mark Lyonette, said: “We frequently hear about the cost of living crisis; our members are facing a cost of doing business crisis and it’s every bit as real. The underlying underfunding, significant general inflationary pressures and specific cost increases for pharmacies stand in the way of our journey to a clinically-focused future.
“Pharmacies cannot pass any of these increased costs onto patients and neither can they substitute away from more expensive drugs or staff - leading to an unsustainable financial squeeze across the sector.
“By taking advantage of their position as the monopoly purchaser of pharmacy services to suppress funding, NHS England now risks the failure of the contractual framework’s main missions.”
In September 2020 Ernst & Young (EY) completed a study of the funding, policy and economic environment for independent community pharmacy in England. This NPA-commissioned study predicted a £497m deficit in community pharmacy funding by 2024 and stated that the network was unsustainable under the current financial framework.
The community pharmacy contractual framework is now in its fourth year of a five-year settlement. Published in July 2019, it commits to “within the settlement period [reviewing] the funding model and the balance between spend on dispensing and new services” as part of “creating the capacity and funding necessary to deliver the wider shift towards a greater emphasis on service delivery”.