“The intention“ is that contractors will receive the £50m at the same time as their planned NHS Business Services Authority payment on June 1, the Pharmaceutical Services Negotiating Committee (PSNC) announced today (May 28).

This is the most recent of three advance payments that PSNC has secured from the Department of Health and Social Care (DH) in a bid to ease COVID-19 related cashflow challenges in the sector. The first two of these payments – totalling £300m – were made to contractors on April 1 and May 1.

Earlier this month (May 19) the DH announced it would increase Category M reimbursement prices by £15m in June.

“Extra funding” needed

PSNC said it is also raising awareness of the “urgent need”  for extra funding for the sector with the NHS and the government and it is trying to “prevent contractors having to repay any of the advance payments that they have so far received this year”.

The negotiating body has submitted a bid for extra funding to the Treasury and will update contractors on it “as soon as we can”. PSNC CEO Simon Dukes said it is “frustrating that these negotiations are taking some time” but that the organisation is “continuing to press for answers”.

Commenting on today’s announcement, Mr Dukes said the latest cash injection, coupled with the £15m increase in category M prices in June "should help to ease some of the immediate cashflow and procurement pressures on businesses”.

Should be “new money”

Professor Claire Anderson, England board chair at the Royal Pharmaceutical Society, said the advance payment “may help pharmacies” to continue to provide essential services but is “another stop-gap measure and should be coming from new money, rather than an advance payment”.

“The Government should review this as part of a fair funding settlement for the longer-term,” she said.

National Pharmacy Association CEO Mark Lyonette said the latest cash advance “increases the level of pharmacies’ debt to government” and many contractors “will struggle to pay it back and should never be asked to do so”.

“It is now more urgent than ever that the government fulfils commitments to repay all the extra costs incurred by pharmacies during the COVID-19 pandemic,” he said.