The contract for England was unveiled on Monday (July 22), with the annual global sum remaining at its reduced level of £2.592 billion for the next five years, and medicines use reviews (MURs) phased out in favour of new clinical services.

In a document containing the contract, the Department of Health and Social Care (DH) claimed that funding “is still supporting more pharmacies in some places than may be necessary to ensure good access to NHS pharmaceutical services”.

DH’s view on “clusters” unchanged

In a list of frequently asked questions published alongside the funding contract, the Pharmaceutical Services Negotiating Committee (PSNC) said the “government’s view on pharmacy clusters remains unchanged”.

The DH used the term “clustering” to justify the 12% cut to pharmacy funding in England in 2016, claiming that “40% of pharmacies are in a cluster where there are three or more pharmacies within 10 minutes’ walk”.

Since then, PSNC estimates there have been 233 confirmed pharmacy closures – with hundreds more expected.

“Whether a pharmacy closes or not is a business decision…and the government and the NHS have not been prepared to discuss their ambitions or expectations for pharmacy numbers as part of these negotiations,” PSNC explained on Monday.

Make merging “commercially beneficial”

The DH also suggested that merging pharmacies could make financial sense for some contractors and proposed amending regulations to “strengthen the protections offered to pharmacies wishing to consolidate”.

“It is recognised that some pharmacy contractors, particularly those with other branches of their own or a competitor’s pharmacy closely located, could consider it commercially beneficial to consolidate,” it explained.

To achieve this, the DH will “look to remove any unnecessary administrative requirements…for example, looking at current prescription endorsing requirements to examine whether these could be simplified and ceasing routine opening hours”.

It is also looking to make “administrative improvements” to the Drug Tariff and update some of the “approved particulars” in the contract.

In a briefing with journalists on Monday, PSNC director of operations and support Gordon Hockey said the proposed regulation change is to protect patient access to pharmacy services and make consolidations “more appealing to contractors”.