The “devastating news” that the 12% cut to pharmacy’s global sum in England will go ahead in December, will put some contractors “at risk of financial ruin”, Umesh Modi, a partner at accountancy firm Silver Levene told C+D on Monday (October 24).
The Department of Health (DH) confirmed last week (October 20) that the funding cut for 2016-17 will amount to £113 million from December.
Based on an average of "around" 11,500 pharmacies in England, Mr Modi estimated that the average contractor will lose £9,800 in profits for the four month period from December 2016-March 2017.
They stand to lose a further £18,000 when the funding is reduced by 7.4% on current levels in 2017-18, he said. "So the total loss over two years is as much as £27,800."
Mr Modi advised concerned contractors to "speak to their bank manager as soon as possible" to arrange a loan or overdraft facility "to see them through the difficult coming months".
“It is also important to make sure [you’re] on top of [your] targets with medicine use reviews, the new medicine service and flu jabs, to maximise services income,” he added.
As part of the proposals, the DH announced a pharmacy access scheme – first proposed to ensure “geographically important” pharmacies are not forced to shut their doors as a result of a cut to the sector's funding. However, just one in 10 pharmacies will benefit from this.
Mr Modi said pharmacy contractors would have “no choice” but to offset the impact of the drop in funding, by potentially reducing staff numbers, lowering opening times to just core hours, or charging for collection and delivery services.
Contractors may have to make the “very difficult decision” to reduce services for the most vulnerable patients, such as preparing dosette boxes for free, he added.
In an exclusive C+D poll which ran on the website October 18-21, 29% of respondents said they would reconsider filling dosette boxes or monitored dosage systems on behalf of patients as a result of the drop in funding.
At the Avicenna conference in Wales earlier this month, Sigma Pharmaceuticals warned that independents could face an additional £2,400 profit loss in the wake of Brexit. Read the full story here.
The C+D Twitter conversation around the funding cuts is still ongoing. Follow #CDcutschat to catch up on the discussion or to share your views, and look out for more coverage online and in the magazine in the coming weeks.