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Sector in crisis: Thousands of pharmacies at risk of closure as inflation bites

Thousands of community pharmacies in England are facing a “real risk” of closure following years of flat NHS funding and mounting inflation, a report commissioned by the National Pharmacy Association (NPA) has revealed.

“Such closures would impede medicines supply, threaten treatment safety, and reduce opportunities for better NHS care,” researchers from the University College London (UCL) and the London School of Economics (LSE) wrote in the report, published today (September 27).

The number of pharmacy closures could be in the order of 3,000 by 2024, according to an estimate shared by UCL emeritus professor of pharmaceutical and public health policy, David Taylor, at a press briefing this morning.

Read more: 'We cannot subsidise NHS medicines bill': PSNC ramps up pressure on government

Professor Taylor said the closures represent a “serious crisis” and “an existential threat to NHS community pharmacy in England”, with pharmacies serving the most vulnerable being “at special hazard”.

Professor Taylor and LSE associate professor of international health policy, Panos Kanavos, wrote in the report that the closures “will be as a result of policies which have not been subject to informed scrutiny beyond very limited circles…and might well have been rejected had they been adequately understood”.


“No allowance for inflation”


Community pharmacy funding in England has been frozen at £2.592 billion per year since 2017, “with no annual allowance for inflation”, Professor Taylor and Dr Kanavos wrote.

If a 10% – or greater – rate of inflation extends into 2024 by the time the current Community Pharmacy Contractual Framework (CPCF) ends, the value of the community pharmacy global sum will have fallen from £2.5 billion to around £1.7bn, they projected.

This means the pharmacy network in England will have seen a “real term” loss of £800 million by 2024.

“This would be almost 40% below the 2015 value of the contact sum and 29% below its 2019 value,” the academics wrote. 

For the current year, the value of the English global sum has already fallen to £2.1bn, or 76% of its 2015 value.


PSNC’s negotiations a “limited mitigation”


While the report acknowledged that the outcome of the funding deal for years 4 and 5 of the CPCF last week allowed £100 million of a previous medicines purchasing “over-payment” to be retained, “no action has been taken to address the underlying financial deficit” affecting the sector.

The negotiations “offered a desirable but limited mitigation”, the professors said.

Read more: Pharmacy bodies blast ‘devastating’ English funding deal

The resources needed to maintain the pharmacy network are “modest” compared with the rest of the NHS, the researchers argued.

But the sector’s “emergency” situation caused by funding cuts and the impact of inflation has yet to be addressed, Professor Taylor and Dr Kanavos wrote in the report.

Even if, for instance, an extra £250m was injected into the pharmacy contract for 2023 and 2024, “overall annual cash outlays on community pharmacy remuneration in England would still be effectively the same as they were in 2015,” they added.


"Different policy objectives” around UK


Community pharmacy policies in other parts of the UK have “progressed without the disharmony seen in England”, the report found.

Initiatives such as Scotland’s Pharmacy First Plus – allowing prescribing pharmacists to treat a wide range of common conditions – and progress in Wales towards reducing the proportion of pharmacy fees derived from dispensing, “promise greater financial stability and enhanced primary care provision”, they wrote.

Read more: ‘Massive Achievement’: Pharmacy First service hits 3m consultations

While it is estimated that pharmacy funding in England stands at £46 per head of the total population, Professor Taylor and Dr Kanavos said the equivalent figures for Wales and Scotland are £66 and £67 respectively.

The higher figures for Wales and Scotland raise “important concerns about the differing policy objectives being pursued, service standards and the competing patient and public health interests at stake”, the researchers added.


“Reasons for long-term optimism”


However, the report identified “reasons for long-term optimism”, pointing to the General Pharmaceutical Council’s commitment to ensure that all new pharmacy graduates will qualify as independent prescribers by 2026.

“Policy makers should with urgency seek to enable community pharmacists to become clinically oriented healthcare providers throughout the UK,” they wrote.

“Such progress should be fostered in a manner that also allows them to execute their dispensing and allied medicines supply responsibilities in ways that best meet NHS users’ requirements.”

Professor Taylor added that increasing the number of prescribing pharmacists will provide “greater convenience”, “reduce waiting times” and “in some cases, fundamentally improve clinical care, as well as taking the strain off general practices”.

COVID-19 pandemic responses have also shown the value of community pharmacy throughout the UK, the report concluded.

“Given pressures on GP and A&E services, now is the time to build on this by enhancing access to clinical care in pharmacies”.


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