Under the contract arrangements, published yesterday (September 22), the government has committed to reviewing the price concessions system, extending the transitional payment, and launching a new pharmacy contraception service.

Read more: £100m in excess margin written off as DH stands firm on flat funding deal

It has also waived £100 million in excess margin for pharmacies in England, although it has not budged on the £2.5 billion a year in funding it agreed with PSNC as part of a multi-year deal in 2019.

These recent agreements mark the conclusion of “tense” negotiations over community pharmacy funding in England that began in February between the Pharmaceutical Services Negotiating Committee (PSNC), NHS England and NHS Improvement (NHSE&I) and the Department of Health and Social Care (DH).

The negotiator had been “frustrated” by the government’s reluctance to move away from the five-year deal – “despite the overwhelming evidence of the current economic pressures”, PSNC said.

C+D has approached PSNC for comment after many sector bodies said they were left underwhelmed by the “hard-won” agreements.

 

AIMp: “Biggest disservice ever done to pharmacy”

 

The Association of Independent Multiple pharmacies (AIMp) slammed the agreement, with a spokesperson branding it on Twitter as a “devastating blow to thousands of pharmacies that are struggling to survive”.

“The current world situation proves that the five-year, no inflation, no contingencies deal has been the biggest disservice ever done to pharmacy and it was done by our own negotiator,” they added.

Read more: PQS funding remains at £75m for final years of pharmacy deal

The AIMp spokesperson continued that the deal is both “hugely disappointing” and “demotivating for all our members and thousands of contractors who have clearly cared too much and given too much”.

“That has perpetuated this disgraceful treatment of them,” they stressed.

They added: “To cap everything, with highly business continuity-damaging workforce challenges, [which are] particularly affecting pharmacists, PSNC has agreed to more professional services for pharmacies to carry out without any extra funding. Really?”

 

NPA: “Fundamentally under-resourced contract”

 

In a statement, the National Pharmacy Association (NPA) said it was “bitterly disappointed and concerned” that the announcement “contains no commitment to fresh funding”.

The NPA’s vice-chair, Nick Kaye, pointed out that while the new health secretary, Thérèse Coffey, “is busy telling broadcasters that pharmacies can relieve more pressure from GPs, the investment that’s needed to achieve this is nowhere to be seen”.

“The life is being choked out of independent pharmacy businesses by the continuation of a fundamentally under-resourced contract in England”.

“The £100m write-off on so-called excess margin goes a small way to recognising the current dire financial circumstances,” Mr Kaye added. “But a clawback of any amount under this kind of pressure would surely be totally unreasonable”.

While he conceded that this round of negotiations was “particularly challenging… that doesn’t make the reality on the ground for our members any easier to bear”.

However, the NPA is encouraged by the government and NHSE&I’s commitment to commission an economic analysis of NHS pharmaceutical services through an independent review to help inform future contract negotiations.

This “may yet prove to be the most significant part of today’s announcement”, he said, “because the current method of settling the financials appears to be based on a power imbalance rather than accurately and fairly weighing up evidence”.

 

CCA: New economic analysis “welcome news”

 

Meanwhile, the Company Chemists’ Association (CCA) said it was “encouraged by the news” of the waived £100m in excess margin, as this will “ease the financial pressures on pharmacy businesses over the next two years”.

The body is, however, “disappointed” that NHSE&I and the DH “have chosen not to depart from the five-year funding deal”.

This was “agreed at a time when the current inflationary and workforce pressures could not be envisaged”, they said.

Read more: PSNC unveils plans for new national pharmacy contraception service

But plans to undertake the independent economic review of pharmaceutical services is “welcome news”, the CCA added. “We encourage contractors to engage in this work.”

NHSE&I must now “endeavour to undertake a system-wide review of the pharmacy workforce, to ensure that patients can access care when and where they need it the most”, they urged.

 

PSNC: “We will continue to do everything within our power”

 

Upon announcing the deal yesterday, PSNC vice-chair Bharat Shah stressed that the negotiator had gone into negotiations “determined to do all that we could to improve the economic position of contractors… despite the flat-funding constraints of our five-year deal”.

Mr Shah, who sits on PSNC’s negotiating team and is himself an independent contractor, claimed that the team had rejected the government’s “very tough initial stance”, thereby “safeguarding” the £100m margin write-off and extended transitional payments.

But he acknowledged that these measures do not go far enough. “All members of PSNC remain deeply concerned about pharmacy finances and capacity – and this is why our work continues,” he said.

He continued: “Rejecting the deal, while allowing us to make a stand, would have meant losing [the waived excess margin], as well as losing other benefits and the chance to engage constructively with a new government.

“We will continue to do everything within our power to demand that the government and the NHS support us through the looming economic crisis: pharmacy stepped up to support them in their COVID-19 hour of need, and they must now return that obligation.”