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Government to slash pharmacy funding by 6%

Sue Sharpe: Cuts are a destructive blow for the sector

PSNC chief executive Sue Sharpe has slammed the "profoundly damaging" cuts, which the government plans to introduce in October 2016

  • Government plans to reduce global sum by £170 million next year, from £2.8bn to £2.63bn
  • Consultation on cuts will run until March 2016, with changes introduced in October
  • PSNC "staggered" by "clear threat" to pharmacy network

The government plans to slash pharmacy funding by 6% next year, it has announced.

The global sum for 2016-17 will fall to "no higher than" £2.63 billion in October 2016, a 6.1% decrease from the current figure of £2.8bn, the Department of Health (DH) told the Pharmaceutical Services Negotiating Commitee (PSNC) in an open letter sent Thursday afternoon (December 17).

The DH will consult on the proposed changes with pharmacy bodies until March 2016, and make a final decision in April, it said. Delaying the cuts until October will give pharmacists "time to prepare for the change", it said.


PSNC chief executive Sue Sharpe slammed the "unprecedented" funding cuts, which she said represent a "clear threat" to the sector.

"[This] will be a destructive blow to to the support community pharmacies can offer to patients and the public. PSNC will meet in early January to agree how to deal with this," she said.

In the letter, signed by NHS England chief pharmaceutical officer Keith Ridge, the DH said the sector must make an "important contribution" to the £22bn-worth of efficiencies the national commissioner needs to make by 2020-21.

"The government believes those efficiencies can be made within community pharmacy without comprising the quality of services or public access to them," it said.

"More pharmacies than necessary"

There are "more pharmacies than are necessary" in some parts of the country, the DH said. "The development of large-scale automated dispensing, such as hub-and-spoke arrangements, also provides opportunities for efficiencies," it said.

The DH also used the letter to announce plans to pay certain pharmacies less than others depending on their location and local health needs.


How could the 6% funding cut impact your pharmacy?

We want to hear your views, but please express them in the spirit of a constructive, professional debate. For more information about what this means, please click here to see our community principles and information



Helen Darvill, Community pharmacist

Isn't it ironic that the DH are recognising the interfacing skill sets that pharmacists have to offer and are consequently wanting our collaboration within GP practice but are at the same time looking to destabilise (particularly independent ) pharmacies within the heart of our local communities, where we conversely should be maximising investment to reduce the long term burden on the NHS.

Stuart Nicholls, Community pharmacist

The government did not close the door on allowing 100 hour pharmacies quickly enough and is now stating there are too many pharmacies in certain locations, surprise suprise. It can't get its way with the junior doctors, so pick on pharmacists there're an easy target!

Jay Badenhorst, Superintendent Pharmacist

This is a good start.... Https://

Sami Khaderia, Non healthcare professional

They proprietor contractors have always pleaded poverty,despite the global sum having been increased from 1.8bn to 2.8 bn in the past decade, and during the same time, the employee and Locum rates have dropped.The contractors have certainly bagged massive profits along the way, and its probably pay back time. I hope they claw it back, and squeeze them out of existence, and start a fresh with individualised contracts!!! - I agree 100% re-open the market - let market forces dictate the winners and loosers

Pupinder Ghatora, Pharmacy owner/ Proprietor

Here we have someone with no clue! If the pharmacy is not run like a business, it will go out of business. Let's be clear - we need to make profit to survive!! Also, learn to spell loser!

Pupinder Ghatora, Pharmacy owner/ Proprietor Remember this, I wrote it in 2013!!!!!! Now look at our situation!

Graham Phillips, Superintendent Pharmacist

This is ALL about the politics of health. I've argued for years that our profession must engage with politicians just like our medical colleagues do.. but no a combination of apathy and disempowerment has prevented us. Please wake up and small the coffee..

Chemical Mistry, Information Technology

You might find you need to speak the Trojan horse that is Sir Keith ridge .

Marc Borson, Community pharmacist

The P2U news shows that the whole concept of unfeasible, lets hope this finishes them off.

S K, Community pharmacist

RPS has advocated this change from their 'Now or Never' document published in 2013 seeking a change to the pharmacy model. Community pharmacists will pay the price for RPSs proposals on future of pharmacy. Thank you Professional body

Chander Kant Prinja, Superintendent Pharmacist

The biggest impact will be on the independent contractors. Unfortunately, 100 hour pharmacies are damaging majority of the independents. Our negotiators better do a good job on these negotiations . The global sum needs to be increased. But we also need to put our house in order.

Dave Downham, Manager

Could we all come and live in your world? London Locum would love it there!

Stephen Walsh, Community pharmacist

OH THE BRAVE NEW WORLD. READ THIS AND THINK AGAIN MR. RIDGE. POSTED ON PHARMACY2U WEBSITE.... Important notice: We are very sorry to advise that Pharmacy2U is experiencing unforeseen, operational difficulties due to our recent move to our new premises, which means that we are struggling to send medicines out as quickly as required. This means that we will not be able to deliver any prescriptions requested from 21st December until the week commencing Monday 11th January 2016. We apologise for the inconvenience that this will cause you at this busy time of year, however it is very important to be sure that you do not run out of medicines. So regretfully, if you can not wait until the week commencing 11th January, it is safest for you to make arrangements with your doctor or a local pharmacist to have your next prescription dispensed locally.

Stephen Walsh, Community pharmacist

If I understand the letter correctly, the Global Sum will be set at NO MORE than £2.63 billion, then it could be less. That will be up to the PSNC to ensure it isn't. I can recommend one way to cut over £123m immediately. Stop the money chase that is the MUR. It'll also free up a lot of time . There won't be many pharmacists shedding a tear over their demise.

Sue Per, Locum pharmacist

And the NMS, which is a complete waste of time,The patients are asked to see their doctor two weeks after starting their new medication, therefore what is the point in a duplication for the service.- Kill it immediately.

Dodo pharmacist, Community pharmacist

You are right Stephen and to get the 2.63 billion we will have to agree to do all sorts of things such as home deliveries to all patients. It is a total nightmare and will result in the decimation of the pharmacy network. The worst thing is that this all on the say so of one man Keith Ridge who's views are his alone and totally unevidenced and just plain wrong. How can this be allowed to happen?

Mohammed Kauser, Pharmacist


Chemical Mistry, Information Technology

Also if this happen to any other so called profession it would be front page news eg junior doctors strike or in law ie legal aid in both cases government made backed down or concessions why? Because they had strong Union or professional body behind them but in the pharmacy case it is the RPS which does not get involved such disputes so we are left with pharmacy voice who is funded by the big boys so not entirely impartial and the Npa which as gone downhill. Also with the RPS did it get briefed about this a few months since it advocated alignment with the Gp contract but was shouted down by the PSNC maybe sir Keith ridge tipped them the wink this was coming down the line probably be fellow in the new year . Off to have some nice Chablis tonight happy drinking !

David Pattinson, Community pharmacist

They have been around for some time! Nearly as long as I have. FREE provision of prescription delivery services, 'free' provision of Domiciliary and Monitored Dosage systems. Free extended hours of service removing need for rota services. More recently Flu vaccinations for £5 - little if anything above cost. Boyant pricing for businesses in pharmacy sector. What do all these tell the government about current pharmacy remuneration. No body likes it, but with EPS and robotics now with us I'll predict this will not be the last cut to contractor funding! Over the years every economy pharmacy has made, has been clawed back. The government is little interested in what pharmacy can add to primary care, otherwise we would already have national minor ailments (down time for overworked GPs) schemes etc. Only thing that surprises me is its as little as 6%! Oh! and as pharmacist salaries fall this too will be clawed back!

Farm Assistant, Community pharmacist

i am afraid the only joy on the horizon is when all those useless area managers get fired. I guess they can all go back to Cadburys and Coca Cola. So can anybody please tell me how all those free trays, deliveries etc turned out? The profession is reaping what it has sown. Pharmacists in France went on strike for two days and the government gave in. Happy Christmas everyone!

Sue Per, Locum pharmacist

Don't be so naive,Those trays generated four fold income with seven day scripts, and delivery's were made to secure hefty margins, through purchase profits, and putting back unwanted items back into stock !!. Look at the balance sheets of all the pharmacies. They are in the public domain.

Killian Johnston, Superintendent Pharmacist

Pharmacists in the south of Ireland went on strike and certain chains sold them out

Yuna Mason, Sales

This is a very significant threat to the pharmacy network, and yet it has only made news in the specialist press, not the national press. More needs to be done to inform and involve the public in discussions about what this will mean for them. The situation does present an opportunity to completely overhaul the pharmacy contract - but I expect this will face incredible resistance from some organisations who I imagine are very happy with the current vertical integration arrangements. That's where the money could be freed up - if a parent company owns the wholesaler and the pharmacy, they control the average wholesale price which influences the Drug Tariff price. They can sell to their pharmacies at that price who claim the cost back from the NHS, whilst the actual cost of the drug could be much much less. Making a "hub and spoke" automated service available to all pharmacies will require a substantial legal review. If that has happened in time for the cuts, by October 2016 (doubtful), the only companies in a position at that point to offer a hub and spoke service will be the wholesalers owned by the same companies as the multiples. It takes years of development and significant investment to design efficient high-capacity automated dispensing systems. You also need the distribution network in place to get the necessary efficiencies, coupled with access to a wide range and high volumes of drugs - meaning hub and spoke arrangements can only feasibly be offered by the existing wholesalers. The wholesalers would control the price of the service so the parent companies would then be benefiting from vertical integration AND would be subcontracting dispensing services to independent pharmacies. They would also have a rich source of data re: what was dispensed from those independents and be able to simply buy out the most profitable ones. That is one possible future for the profession, but not the one it needs.

David Pattinson, Community pharmacist

Would expect to see that at some future point hub and spoke dispensing will lead different remuneration structures for the different dispensing models/volumes and wholesaling, given the past history of pharmacy remuneration.

John Alan James Robinson, Superintendent Pharmacist

MUR and NMS money is difficult. We genuinely find time constraints in rural pharmacy with elderley patients. Recruitment in year two is more difficult because the patient queries the need. Consultations an take up to 30 minutes with complex cases. It was said in PSNC by a colleague from IOW that 10 minutes was more than enough time to consider interview and complete. Well in the real world life may not be so easy. If cuts lead to further reductions in staffing levels then how on earth will the advanced services be viable ? National minimum/living wage to increase in tandem with pension provision in 2017 for the small players. COSI not implemented. New service = new burden and no IT. Click and collect , delivery to home without IT systems will be a nightmare. Its all well and good to say more for less but there is bound to be wailing and gnashing of teeth. The DH must be persuaded that the model for independents who are not AIM and have one or two outlets must be different and don't fit the model applied to Retail driven multiples. The government has arguesd that GP's are different and therefore need a $% increase. Have they cut dispensing doctors by 6% . Not yet, perhaps not at all. Fair funding is really all that we ask for and surely deserve.

London Locum, Locum pharmacist

In year 2 of course they query the need. MURs are a complete joke and everybody including patients know this. And to be fair you do not deserve anything because you have all behaved like subservient sheep for too long. You actually deserve all the crap currently being dumped from above

Chemical Mistry, Information Technology

As one now out of pharmacy I have to agreed slightly since the contractors big and small " never had it so good " maybe not the last few years but over years they have happy to go long with th DH and PSNC with the changes well knowing if they wanted to get out then,they could sell up to the big boys for a big profit and lie on the beach well the chickens have come to roost since the big boys have not only shafted the employees pharmacists they have now shafted the other contractors because of their lobbyists and buying power they can still make a profit look at the shoes company one of the worst but the general public still associate them being one of the best. Also if they were so unhappy how come they never got rid of chief negotiator S Sharpe if any other ceo of a company did such a crap job then they would be out of the door however they kept her on all theses years again so maybe they are makers of their own downfall,and here a idea how about if the PSNC said for example all community nomad trays should be paided for by the patients from a set date eg 1/1/2016 with a minimum charge of say £20 a month for time/labour etc due to the cut backs ,ask yourselves this how many pharmacy contractors would enforce this ruling, I tell you the big boys would still provide it for free happy for the rest to lose the business to them so there is your answer,The DH and chief enforcer Sir Keith Ridge will have done their job divide and conquer and conquer they have. Merry Christmas and have few glasses of Merlot on me since going to need it ! Also was a mere coal face pharmacist who loved the job but was lucky to see the writing on the wall and more better work life balance since only get one go in this life!

Freelance Chemist, Pre-reg Pharmacist

Change or DIE!!!!!

Chris Locum, Locum pharmacist

I fear there are some who have chosen slow professional death....

Dax Trader, Finance

No point crying yourselves to sleep every night. If you don't like it leave and do something more profitable with your time. You only have one life. I have worked for all the big chains. Didn't like it. Left to run my own pharmacies. Still didn't like it. Now working from home for myself. Not pharmacy. Loving it. Far more profitable too.


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