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Pharmacy funding cuts: Everything you need to know

The DH is consulting on the funding changes until March 2016

The government plans to cut pharmacy funding by 6% next year. Click on the bullet points below to find out more about the proposals

Summary of the cuts

The Department of Health (DH) and NHS England announced yesterday (December 17) that they plan to reduce the pharmacy global sum by at least £170 million in October 2016. This will reduce funding from the current level of £2.8bn to “no higher" than £2.63bn.

The 6% fall in overall pharmacy funding represents an average funding drop of more than £14,500 for every pharmacy in England.

The consultation process

The DH has pledged to consult on its proposals with the Pharmaceutical Services Negotiating Committee (PSNC) until March 24, 2016.

Discussions with PSNC will be "at the heart" of the consultation process, the DH said. Other pharmacy bodies – including Pharmacy Voice, the Royal Pharmaceutical Society (RPS) and the General Pharmaceutical Council (GPhC) – will be involved in the talks, alongside patient representatives, the DH said.

The DH will make a final decision on the proposed cuts next April.

Paying pharmacists different amounts

The DH will also consult on a Pharmacy Access Scheme, which will vary the amount of funding individual pharmacies receive based on their location and the health needs of the local population.

Pharmacies in deprived or rural areas will be protected, the DH stressed. 

"More pharmacies than necessary" 

The DH argued that there are too many pharmacies in some parts of the country. It claimed that 40% of pharmacies are located within a 10-minute walk of three or more others. This provides an opportunity to make "efficiencies", it said.

However, the DH said it does not know how many pharmacies will close as a result of its announcement.

How hub-and-spoke fits in 

The DH announced in November that it is looking at whether the law can be changed to allow independent pharmacies to operate a hub-and-spoke model, and it reitterated yesterday that this dispensing model will help the sector make savings by reducing operating costs and freeing up pharmacists to deliver more clinical services, it said. 

A consultation into changing the law to allow independents to operate the model will run separately in 2016, it added.

Q&A on other aspects of the cuts

1) Why is community pharmacy being targeted when general practice will receive between 4% and 5.4% more funding each year for the next five years?

The DH said it is impossible to compare funding for the two professions, because the services they provide are different.

2) What about the global sum after next year?

The DH has not made any decisions about funding beyond 2016-17.

3) Will pharmacy receive any new funding streams?

Alongside the cuts, the DH announced a new Pharmacy Integration Fund to help "transform how community pharmacy will operate in the NHS". The fund will support pharmacists to work more closely in GP practices, care homes, and urgent care settings. It will consult on how best to introduce the fund, it added.


How will the cuts affect 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


Shenu Barclay, Community pharmacist


The current situation for locums is extremely dire with almost 500 applications for each job according to 1 of the locum agencies.If these cuts are imposed in October 2016,locums will hardly be employed by any independents or multiples.I can foresee times of austerity for all locum pharmacists ,This is already exemplified by the downward spiral for the hourly locum rates.


Yo Palumeri, Community pharmacist

If you ask any pharmacist to value themselves it is automatically based on locum rate. Until we can clearly put a true value on our services then where can we go? Th CoS enquiry showed that independents failed to invest in pharmacy given the wide difference in independent and multiple costs The DoH's only worry is how to keep the cost of drugs down should they remove pharmacy from supply chain and pay us for our services only

Angela Channing, Community pharmacist

Just axe 350 MURs per pharmacy per year. No one will notice, not customers or pharmacists. Leaving one good, clinical, relevant MUR per week. Worth just as much as 400 quick rushed useless ones!

Glorified Grocer, Community pharmacist

Well done Angela,MUR,you mean medicine useless reviews!

Chris Locum, Locum pharmacist

I couldn't agree more. Reduce MUR and NMS funding instead - they are mostly useless. NMS is no more than duplication, there are few instances where I felt I was doing something useful. They are headed straight back for review anyway.

Sue Per, Locum pharmacist

Totally agree. With most of there has been no patient benefit, but only benefited the corporate coffers.!! Overdue for the scrapheap.

cardiff pharmacist, Superintendent Pharmacist

Opportune that we see today how internet pharmacy really works...or not as the case may be.

Mayur Shah, Community pharmacist

Large multiples have always benefitted at the expense of the independents, but now is the time that they too shall feel the pinch. They have been the first to provide this and that free to attract more business, but soon this will be a business with no profit. This is a wake up call for community pharmacy to reform, to work together , to establish effective practice and a unified voice when negotiating any future contracts. Time has come to stop all the gimmicks such as free blistering and free delivery unless adequate funding is available. The hub and spoke model has been live with large multiples and there are obvious advantages, perhaps the independent sector can actively embrace this opportunity to group together. Time has also come when the Free bees were stopped; Care Homes, for one, should start paying for services rendered , namely MDS trays, loaning of trolleys and equipment etc..

Joy Wingfield, Academic pharmacist

I hesitate to enter this fraught topic but one should just read the whole letter. This is my posting on the PLEA website: "The Department of Health has set out in a letter to PSNC its plans to integrate community pharmacy into primary care. The letter proposes consultation on the introduction of a Pharmacy Integration Fund; a Pharmacy Access Scheme; on new models of ordering prescriptions and collecting dispensed medicines and on changes to the Human Medicines Regulations 2012 to allow all pharmacies to access the efficiencies of "hub and spoke" dispensing. The letter also proposes a reduction in funding within the community pharmacy contractual framework from £2.8bn to £2.63bn for 2016/17, with effect from October 2016. Consultation on these changes is offered to PSNC and others through to 24th March 2016". The contents of the letter should be read carefully. There are sticks and carrots. And it does not suggest that independent pharmacies should be able to "operate" a hub and spoke model; it talks about "access the efficiencies of" hub and spoke which I believe implies a number of possibilities. The existing contract model is archaic; it creates all manner of perverse incentives and it is profoundly unsatisfying to those new pharmacists who simply want to offer their clinical skills in a community setting. How would you change it to harness the currently "over-skilled" but highly clinically trained students now emerging from pharmacy schools to maximise their contribution to our collapsing community and primary care services?

Dave Downham, Manager

Yes, Joy, I know it's hard to belief but the letter has been read - and re-read - by users of this forum. There are no carrots for owners of independent pharmacies, but plenty of punishment for an efficient industry. The entire dispensing of primary care prescriptions has been outsourced to the private sector, who operate in a necessarily competitive environment, which is why there can be more than 1 pharmacy within a 10 minute walk. (Don't get me started on how that is calculated.) As well as outsourcing the negotiation of drug prices - imagine if that was done centrally? - this competition breeds quality and added service for patients, hence the need to offer services FOC such as man and van, MDS etc. By definition, to have efficiencies of scale - which is what we are talking about with H&S - you need to have scale. Hence, the usual big players - Boots, Lloyds, Day-Lewis - will be rubbing their hands at the opportunity offered as small independents are forced to close, leaving the door wide open for the multiples to offer their vanilla at best service.

John Alan James Robinson, Superintendent Pharmacist

With all due respect , Joy. I have read the letter. After spells in Academia anat Nottingham and Manchester, I became a contractor in 1984 . I witnessed loss of on cost in return for rationalision. The very mechanism that allowed those with contracts to remain. Contracts were bought and sold and there is a village in Surrey with 3 branches of the same multiple (Cranleigh if you know it). Since I qualified and over a period of 40 plus years, we have been offered integration and clinical services. I was on the PSNC for 4 years. recent experience ! Of course pharmacy would like to engage with clinical services. Sadly no costings no pilots. Only schemes fudged together at PSNC . Horror stories about lack of uptake and pressure. Also a plethora of governance and big sticks. You are fully aware , with your experience of the lack of inertia in all matters. Decriminalisation???? Yes I have read the whole letter but remain cynical. I truly wish that I could be optomistic.

Super Pharmacist, Community pharmacist

I'm sorry to say this & I'm sure I'll get flak for it but, we'll do the same thing we've always done. Moan, moan some more & then accept the offer on the table. Unless something fundamental changes within the make up of the profession & its leadership, things will stay as negative & even more as they have been for a number of years now.

Harry Tolly, Pharmacist

Who is we ? Only contractors can vote to accept or not ?

London Locum, Locum pharmacist

Thats why there is this sorry mess. Independents only complaining as they've realised the big plan is to get rid of them too.

Peter Marshall, Community pharmacist

Community pharmacists providing free delivery services, free MDS , no wonder the Dept of Health can see areas for cuts. If the current fees allow pharmacists to give a free delivery service there must be excess profit in the system. Perhaps theDept of Health is right to say we have too many pharmacies in the wrong locations, but I would love a scheme to allow contractors to give up their contract or a scheme to allow pharmacies to merge to provide a better service

Ravinder Rahanu,

This again makes us wonder whether the idea " prevention is better than the cure " is correct. The DOH and so called Boffins are putting it to the test by intiating cuts in pharmacy run public health and the community pharmacy budget whilst expecting health gains in the population, especially the elderly.The euphemistic assertion of making efficiency saving by this means is clearly an idea of an inept and an ignorant mind set . Perhaps refusing to do any new MDS for clients ( due to the these cuts and capacity reasons) will help save the Contractor £20 loss every time one is requested. This will hopefully be perceived as "efficiency" by the DOH and clearly not by the Client .

J Bate, Community pharmacist

Time to stop doing things for free. Only do what we get paid for. We may then have something to negotiate. Pharmacy must unite. Unfortunately we have never been able to do that.

Old Timer, Manager

Never a truer statement made ,the big boys will win ,for ever Pharmacy has been told jump to which it answers "how high Sir "

Frustrated Pharmacist, Pharmacist

Hear, hear! Could start with blister packs & deliveries. If everybody refused to do these, without the fear of business going elsewhere, the NHS would soon cave in. I can't see the NHS paying for two attempted deliveries to lazy shirkers who can't be bothered leaving the TV screen to answer the door!

John Alan James Robinson, Superintendent Pharmacist

Excuse me but which crystal ball did you gaze into and to whom have you spoken ? I wish we did have the tools to know more. Protection of rural pharmacies ? Thats a new strategy. Don't think that PSNC has engaged in rurality or dispensing Doctors for a long time. A sub committee was formed with few meetings and little discussion between 2010 and 2014. I was there , I know. Most of what you have regurgitated within hours of your last article is no longer a mystery. Pharmacy integration fund , paid for by the cuts ? Bit like the 10 billion in 22 billion out. I sit at PPG group meetings and listen to CCG pharmacists asking for savings which will not be lost but reinvested back into the CCG. The GP's believe them. Deprivation tends to occur in high population, inner city areas and also on the coast. Rural areas have always come second to deprived or health action areas. This is the same old dressed up in a different way. The pharmacist in GP surgery pilots are effectively being paid for by the cuts in community pharmacy. The pharmacy contractual framework remains unfit for purpose and too easily manipulated by ministers with a little or perhaps a lot of help from DH pharmacists and dare I suggest , PSNC. Fair funding and COSI have been buried. Soon to be followed by a mass graveyard for community pharmacy. Embracing new services is great if they exist , continue to exist and are paid for at a realistic rate. The man with a rural pharmacy , even if the only one in a village of 5000 ,will have great difficulty in surviving. Some have taken risks with personal money for most of their lives. Some will have no pensions , only overdrafts. What a christmas present !

Harry Tolly, Pharmacist

"The DH argued that there are too many pharmacies in some parts of the country .." Many would argue that there are too many second rate pen pushing pharmacists at the DoH. Can we cut some of them ?

Simon MEDLEY, Community pharmacist

someone needs to get Keith Ridge to go and spend a day working in a selection of pharmacies- then he can persoanlly show the staff where they can be more efiicient. maybe even sack any loafers and shirkers he meets

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