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Establishment payments to plummet 20% from December

Establishment payments for pharmacies in England will drop 20% from December, the government has announced.

This will amount to £419 less a month for pharmacies which currently receive the highest monthly payment of £2,092, the Department of Health (DH) said in a document released today (October 20).

The payments will fall by a further 40% on current levels from April 2017 – down to £1,255 a month for these pharmacies, it said.

All community pharmacies which dispense more than 2,500 items a month currently receive an establishment payment, but the DH reaffirmed that these payments will be "phased out" entirely over "a number of years".

The DH's document was timed to coincide with confirmation from pharmacy minister David Mowat that the 12% cut to the global sum would go ahead in December as planned.

Despite the DH telling C+D last week that no final decision had been made on the cut, Mr Mowat laid out the plans in the House of Commons today.

Mr Mowat confirmed the Pharmaceutical Services Negotiating Committee's (PSNC) announcement last week that funding would drop by 7.4% on current levels for 2017-18, bringing the global sum down to £2.592bn.

Mr Mowat insisted the government "appreciates the value" of the pharmacy sector. But he stressed the current system does not do enough to "promote efficiency or quality". 

The DH also released an impact assessment of the funding plan today, which confirms “there is no reliable way of estimating the number of pharmacies that may close as a result of this policy”.

PSNC "unanimously" rejected the funding package last week.  

£42m integration fund announced

Following Mr Mowat's announcement, NHS England published details of its promised £42m 'pharmacy integration fund'.

This will support pharmacy to “develop new clinical pharmacy services, working practices and digital platforms”, and result in “more integrated and effective NHS primary care for patients”, it added.

“Wholly unacceptable”

Pharmacy Voice described the government’s plans for significant pharmacy funding cuts as “incoherent, self-defeating and whole unacceptable”.

Chief executive Rob Darracott said the government appears “hell-bent on pressing ahead” with its policy and has “replaced warm words with increasingly aggressive rhetoric. 

The Twitter reaction:
How will you cope with a reduce establishment payment?

bone, Superintendent Pharmacist

the only occupation in the world which gets paid less and less  for doing more and more than it did before.Private industry would laugh at retail pharmacy remuneration system:and our negotiators accept it all,cap in hand,as though we were being treated fairly.  What is the sequel to retail pharmacy ? Aided self destruction by the PSNC

david williams, Community pharmacist

Profit is not a dirty word, if I make a profit, I can deliver services. For example, last week the local hospital rang me to ask if I could put up a MDS for one of our patients from a faxed DAL, ( 2 in the end actually) We liased with the local surgery-no GP available to sign prescriptions, as is common place on Thursday PM-and the MDS's were delivered that afternoon at no charge to the patient. 4 nights x 2 people in the hospital saved -home Thursday instead of Monday-patients refused meds in seperate boxes, as they were confused, What is wrong with that? Where is the lack of professionalism? Around £3,000  saved -or rather, better utilised by the NHS. The hospital pharmacy could not do it, as it did not have the capacity. I am so glad that the Welsh Assembly values pharmacy and the NHS more than the Westminster government and has promised to keep investing in it-albeit with more clinical services to be delivered. I understand everyone's arguments but there is always a bigger picture to see and and the current contract requires a profit to be made to deliver. Other,"more professional and less profit centered" models e.g. "the hospital pharmacy" could not deliver this-i.e. "failed" and therefore is not the best other options, I am, as always, open to suggestions to improve this. Even some of the "ones of envy" above.

SydBashford Sold&Retired&DeRegistered, Community pharmacist

I propose the NPA run a "Ask your pharmacist" campaign but with the pharmacist crossed out and GP above it. This will enrage Gp's but will get far more media coverage and their public support for us too. 

Dilip Shah, Community pharmacist

Now we know the governments position as a profession we can make life difficult for the government by refering increased amount of patients to GP services and A&E.
This is an alternative so that finally this government realises how the NHS services are subsidised by the pharmacists every day.
Also is imposition of this contract legal?

Shaun Steren, Pharmaceutical Adviser

But surely to make any impact you would have to withdraw services that patients actually want. You can't threaten to withdraw the provision of NMS or MURs, not because you are contracted to do them (and paid to do them), but because patients wouldn't care less and so it would have no power. 

The moment you withdraw a service that patients actually want (delivery and MDS for example), you provide an opportunity for a competitor to take your patients. This would also be a patient you would now be unable to foist a unwanted service (MUR/NMS) onto. Do not think for one moment that any of multiples or online groups will not take advantage of that opportunity. 

This is the predicament community pharmacy has managed to get itself into. The services that patients actually want from community pharmacy are those that are only really profitable with economy of scale, vertical integration and corporate tax rates. The pseudo-clinical services do not gain market share. 

Post cuts, the strategy is to provide the 'free' services because they are the ones that patients actually want and so gain market share. Once you have locked in those patients, then foist the unwanted pseudo-clinical services onto them. Those who are not economic with 'free' services will be cannibalised. This makes any threat to withdraw services rather redundant, with an interestingly similar symmetry and redundancy to employee/locum pharmacists threat to strike. 

We’re all doomed, Locum pharmacist

Community pharmacy...a fragmented workforce that is easily exploited. The PSC have presided over the protection of a simplistic supply function remuneration model for oh so many years. The RPS too are implicated as they were holders of representation and registration. The model is too simple can be easily manipulated by the DoH. IF a more clinically focused model of remuneration had been developed allied to the pharmacy degree education we might have been able to show our worth. Instead we compete against each other, offer services for free and also publish indicative income! We are not remunerated for our professionalism instead the focus has become the purchase margin. I feel very let down by the professional bodies there to represent us, toothless, no leadership, no creative vision the most recent day in the life of a pharmacy in the future was a farce unless it was allied to a remuneration model. Glad I'm not starting out, if I was I would be considering my alternatives with a life science degree rather than that to become a professional person. Osteopathy comes to mind as an alternative degree, as do Masters in public health, epidemiology etc. And don't get me started on the expansion of Schools of Pharmacy since 30 years ago. Quite simply what a great big mess, well done Mr and Mrs Sharpe


Gerry Diamond, Primary care pharmacist

Integration fund will possibly include funding the emergency supply of OOH meds, minor illness, repeat dispensing and further NMS/MUR funding. Integrating primary care services with GPs and chronic disease meds management, but more down hill than before!

A Hussain, Senior Management

If the government wants to move away from dispensing to a more clinical future then they must look at dispensing doctors.

Open Mon-Fri 9-5, no MDS, no delivery, no reviews, no other services.  £2 item fee.  

Too scared to take on the GP's, or don't see this as retail like they see community pharmacy.

Philip Levy, Community pharmacist

I think the time has come to remove the word "negotiating" from PSNC - it's clearly not accurate.

Chris Pharmacist, Community pharmacist

If the govt is reducing funding then we have to reduce what we do. Anything else is just fuel for the govt to thnk they are right that there is excess profits in pharmacy and to continue with the cuts...please can the multiples wake up and show some delivery, free MDS and free repeat ordering has to end....the govt needs to realise these cuts will have an impact on patients

Shaun Steren, Pharmaceutical Adviser

The deliveries and MDS are not 'free' they are funded by two things:

1) Reduction in employee pharmacist wages and massively increased workloads 

2) Gains in market share. Any contractor who doesn't want to provide these services for 'free' will have their items taken by other contractors who will

Sue Per, Locum pharmacist

I futher believe that the D.O.H., have realised that the all contractors both Independents and Multiples, had a "target driven" rather than a "patient and clinical" need approach for the services on offer, with the aim of maximum profit with very little "value" to the recepient party.This was coupled with fraud, through over-ordering on Repeat-managenment" schemes of all sorts, specials, parrell pricing, etc..Needless to say the same will occur with minor ailments scheme.

There needs to be a radical "shake-up" of the NHS pharmacy contract, with transparency, and total accountability by the contractor. to its paymasters.

Chris Pharmacist, Community pharmacist

It ws the NHS and PSNC that imposed the 'new pharmacy contract' on you blame appear confused. Any shortcomings in the contract are the fault of the NHS and PSNC failing to consult with pharmacists and completely lacking in vision as to what pharmacists can actually do to help patients and support the NHS.

Sue Per, Locum pharmacist

The PSNC cannot impose the contract, as they negotiate for the contractor, and safe to say that they did not manage to deliver to the expectations of the contractors. Contrary to the widely held belief, I believe PSNC did a reasonably good job in achieving annual increases for the past ten years, along with the a few additional advanced services. And it is safe to say that the contractors manipulated the system to their advantage for maximum profit, by delivering a "less than adequate professional service", by chasing targets, with poor outcomes!!. During that time with the "Stick" approach, and "Stretch & Extract" model they maximised profits, and several pieces of evidence supports that view, such as annual p&L accounts balance sheets, pharmacy re-sell values, staff morale, etc...

In contrast the employee pharmacists remuneration and locum rates have fallen in real terms, and power shift needs to re-equibrate., and the employee pharmacists and locums need to be self centered, and collectively start bargaining for the better pay and working conditions!!It is overdue!!! 


Shaun Steren, Pharmaceutical Adviser

With respect, I don't think community pharmacists could become anymore self-centred than they already are. Is there another profession who has a more potent 'every man for himself' attitude than community pharmacists? I very much doubt it. The very reason why employee pharmacists will not unionise collectively is that their self-centred opportunism comes all too naturally.

Independent contractors have at least shown the sort of unity and fight that you would never get from the typical employee/locum pharmacist. Much of what many contractors argue for is self-interested nonsense, but at least they have the backbone to fight, the good sense to unite and the work ethic to give up their own time. 

Anonymous Anonymous, Information Technology

Time to start referring 20% more patients to their GP or A&E... Or perhaps 100% - see how the service becomes swamped then...

Sue Per, Locum pharmacist

As always,late, but, the giant has woken up, and come up with a sensible sentence i quote, "Mr Mowat insisted the government "appreciates the value" of the pharmacy sector. But he stressed the current system does not do enough to "promote efficiency or quality". Quite simply it evaluates us as high calibre  professionals, delivering a near useless service, by running dispensing  "sweat shops"It is implying, use your acquired skills to deliver a quality innovative services rather than concentrate on filling up mds's, building up dispensing volumes, repeat management ordering, etc. 

It has also realised that the contractors are placing profits before people, and running their business for maximum profit, without the risk that ordinary business face!!., and at the tax - payers expence.... and why should the tax-payer fund such a business model??

It is really time to up the game, and provide a high quality professional services, that complement with other healthcare providers, and abandon the "Social services" element of repeat ordering, MDS assembly and delivery services, etc..   


Jupo Patel, Production & Technical

Finally, somebody telling the truth.

A Hussain, Senior Management

Maybe we are chasing the numbers, rather than quality but that is the sytem we are in.  The reality is that somebody has to dispense the increasing number of items being prescribed.  Free delivery and free MDS aren't run for maximum profit though, so your point does contradict itself somewhat.

Remind me again how GP's are funded/reimbursed?

Sue Per, Locum pharmacist

Free delivery, MDS's and Repeat "Ordering-Management"are not part of the contracted services, therefore it is entirely up to you, whether you want to offer it free or at a cost to  client!!.Most do it for purely commercial reasons, like a lot of other bussiness.

Choose you business model as it suits you, ultimately you have a choice., if you can't hack it, sell it!!!. There is a queue of buyers !!!




Simon MEDLEY, Community pharmacist

queue of buyers  ...   for cough !

A Hussain, Senior Management

Commercial decision yes, but if you are heartless enough to charge a confused patient for an MDS or charge for delivery when a patient is truly in need, then you should be a politician and not a pharmacist.

Answer the reimbursement question please seeing as you have all the answers.  It's apparently abhorrent to pay me an establishment fee as I work from a shop.  But if I work from a house as a GP, the NHS pays my mortgage for me.

Angela Channing, Community pharmacist

And I'm sure we have all seen the confused elderly who live in very big houses, and the "truly in need" who arrive in taxis, or clutching mobiles better than yours. Your hand wringling over this is what has brought us to this situation. Most elderly are quite well off now, certainly better than most under 35s. I'm sure they can afford a pound or two a week/month to pay for the time, effort and plastic of that nice little tray you make up for them! If they get their groceries delivered from Tesco, they will be charged by Tesco, Tesco will not waive the charge because they are a little old, confused lady!! ====================================================And the sooner all pharmacists and companies start to take this attitude, then life in community pharmacy may start to change for the better. We have been doormats for too long.  

Sue Per, Locum pharmacist

A true reflection of reality!! well said Angela.

Nat Mitchell, Community pharmacist

It is crazy that we have ended up providing these high social value services for free, but I don't want my pharmacy using the same criteria as Tesco. Neither will you if you are a locum. 

Sue Per, Locum pharmacist

Mr Hussain, we are not "social services", but pharmacists, and are on remit to deliver services as contracted!!, Any thing else is discretionary. In respect of your argument,one may as well adopt a communist model, where all the essentials are paid by the state. Free housing, food coupons, schooling, healthcare, etc....., and then bring the state to its knees and create scenarios as in N Korea, Cuba, former USSR

A Hussain, Senior Management

Are you replying to me or just ranting.  I run a business and I want to make money.  I have to provide these services to keep my business, but I also have a social conscience.

I asked about remuneration of other NHS contractors not about the situation in dictatorships?  Why does a GP get his/her rent reimbursed for example? 

Jupo Patel, Production & Technical

I think that question  is for another forum. Politicians are not interested in ramblings here.

G K, Superintendent Pharmacist

Another great idea from the insane conservatives. First the chaos after brexit, and now this. Truely going to be a memorable xmas this year.

ROBERT SHODUNKE, Community pharmacist

It is now simply a joke being a pharmacist, there must be alternative options to earn some respect/earning for working so hard !


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