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Pharmacy on brink of ‘uncontrolled series of closures’, NPA warns PSNC

Mark Lyonette: We need to address the nonsense of dispensing at a loss
Mark Lyonette: We need to address the nonsense of dispensing at a loss

The sector is on the brink of a series of pharmacy closures because of worsening financial pressures, the NPA has warned PSNC during ongoing contract negotiations.

The current pharmacy funding situation is “unacceptable and untenable” and the National Pharmacy Association (NPA) is “very concerned that we are on the brink of facing an uncontrolled and unpredictable series of closures”, it has warned the Pharmaceutical Services Negotiating Committee (PSNC).

In a letter addressed to PSNC chief executive Simon Dukes last week (June 3), the NPA called for an “urgent response…to stop irreparable damage to the [pharmacy] network”.

“Funding is not keeping pace with the increasing costs and workload, and the situation is exacerbated by turbulent and escalating medicines prices,” NPA chief executive Mark Lyonette wrote. 

Negotiations for a new pharmacy funding contract, which began in April, are covering areas as diverse as the future of the medicines use review (MUR) service, the healthy living pharmacy (HLP) programme and the possibility of a national minor ailments service.

Mr Lyonette said the sector is “at a critical point” and the contract negotiations “are an opportunity to ensure that we take the right direction for the long-term”.

“Nonsense” of dispensing at a loss

He called for an overhaul of pharmacy payment mechanisms, including a “more responsive and effective price concession system”, to ensure timely payments and to “address the nonsense of dispensing at a loss”.

Contractors must “have reasonable certainty of what they will be reimbursed and that they will not be dispensing at a loss”, Mr Lyonette said.

Independents disadvantaged

He also claimed that independents are “disadvantaged by a system based on averaging”, as they cannot “spread the risk across an estate or hope to have losses averaged out”.

“This must be addressed so that independent contractors have a fair share of the funding available to deliver the pharmacy service,” he said, and suggested “a model in which the proportion of funding that is derived from margin is lower may be a solution”.

Recruitment problems will grow

Mr Lyonette also called for “an effective platform for developing the community pharmacy workforce” and stressed that “in some parts of the country it is very difficult to recruit pharmacists and we expect this problem to grow”.

“Simply substituting community pharmacists with primary care network pharmacists (sometimes misleadingly labelled as ‘clinical’ pharmacists) and using inflexible commissioning arrangements across primary care rather than increasing the supply of community pharmacists and making greater use of community pharmacists’ skills is wasteful for the taxpayer,” Mr Lyonette stressed.

While the community pharmacy workforce is keen to engage with new training opportunities, backfill funding for locum cover is needed so pharmacists can attend courses, he added.

“Radical change needed”

“Our view is that radical changes are needed, because current arrangements disadvantage independents and are unsustainable,” Mr Lyonette said.

He called on Mr Dukes for “an assurance that a settlement that provides stability and fair and equitable remuneration for independent community pharmacies is being pursued vigorously”.

Read the NPA’s letter to PSNC in full.  

Have any pharmacies closed in your area recently?

Meera Sharma, Pharmacy owner/ Proprietor

Should the NPA not be outlining a vision on behalf of the community pharmacy sector rather than writing letters highlighting what PSNC as negotiator should be aware of anyway? The NPA under its former chairman Ian Strachan led the sector and now it has lost its identity. 



Brian Plainer, Locum pharmacist

Wonder how the "Dragons" of Dragons Den would view a business based upon the current NHS Pharmacy remunerative/reimbursement/service contractual model? Would they be attracted to personally invest or just laugh sympathetically?

cardiff pharmacist, Superintendent Pharmacist

Dispensing at a loss- Abbott freestyle libre- no discount recived, not on ZD list, so 10% discount clawback...£3.50 per pack loss!

Pfizer, AZ, GSK branded lines..all dispensed at a loss.

margin on generics is supposed to make up these losses...but if all price concession then zero margin on them

Sue Per, Locum pharmacist

Dispensing at a loss is entirely the contractors fault for providing services such as collection, deliveries and "mds" at no charge. The aforementioned services are not part of the pharmacy contract, and should be charged to the recipient of the services.Even the BBC had to revoke free licences for the over 75's, and I believe a prespription charge of £2.00 should be levied to everyone, and i believe this will result in reduction in hoarding and retrospective reduction in waste of medications, or in the least part of the cost of wastage will be bourne by the culprit causing the waste.

The multiples have already started to increase the supply of private services, raising the prices on OTC medicines, and therefore the margins. The independents are very versatile, and adapt quickly to manage the changes, and there will be no mass closures as pleaded.

Yet another alarmist article by the contractor owned organisation. What else would you expect??!!


Kav Singh, Community pharmacist

Here we go you think raising the price of a few Nurofen is going to counteract losses made from I counted 44 lines that are currently over tariff and not on concession. Your comments are disrespectful to contractors struggling to keep the lights on. Just refer to christies website there are businesses for sale that are currently in administration.

Sue Per, Locum pharmacist

You didn't visit Christies auctions by chance did you?? on the Christies  pharmacies "sales" site on the front page it says 2.8% year on year growth!!

you mention 44 lines that are above the Tariff price, how about the (X-44) that are below tariff!! Is there any complaint regarding that?? Of course not, because you are in denial. In reality if things were that bad, one would have witnessed sales at negative premimus or closures. All the parties with vested interests in squeezing the NHS's udders for more will disingenously plead hardship and poverty. What utter nonsense in absence of any tangible evidence to the contrary!!

Jackie Robinson, Marketing

Agreed ...pharmacies never close they are sold ..the cheapest is 300,000 and go up to 2 million... biggest business in the world is pharmaceuticals

C A, Community pharmacist

The below tariff items are there to give pharmacy a purchasing profit and that profit is capped, any excess is recovered by Cat M clawback. The question is, are the losses on the lines above tariff added to the cap prior to clawback? Thought not...

Rajeshvari Patel, Community pharmacist

After all you are a locum. You leave at the end of your day and leave the running of the retail outlet to the owner who also has a professional responsibility to look after his customers. They , by the way, indirectly pay your wages. How would you know how the negotiations affect the livelihood of an independent pharmacy. Be careful, if this is your thinking, you are only good to work for multiples and I wouldn’t want to use your service with your attitude

Alexander The Great, Community pharmacist

NPA is talking about dispensing from the NSCO list. If you get a script on 1st June for something above the DT, you will not find out sometimes if you will get reimbursed for it until maybe the end of the month. This is totally unfair and an unfit for purpose system.

MDS systems should only be supplied when the person has been assessed and has a form of disability. It is agains the Disability Discrimination Act if you do not supply an MDS, which apparently is already paid for in item remuneration.

I agree though that all other services should be charged for. BUT, with pharmacy2u and other multiples delivering for free... will an independent be the 1st to take the plunge and risk losing customers? I think anyone business-savvy wont take the 1st step.

Sue Per, Locum pharmacist

Pharmacy2u, is racking up losses, and with the costs of delivery rising, it will be a long time before it becomes profitable. It is quite posible that if it is reliant on NHS business it will fold.I have reason to believe that while it is increasing its NHS volumes, its other side businesees are rising faster, and it is potentially subsidisng the NHS side of the business. In this current economic climate where the deficit is likely to persist till at least 2025, the paymasters will not loosen their purse strings until they percieve an improvement in quality of service rather than quantity propelled by MDS's on 7 day scripts!! They conveyor belt MDS repackaging Lines, will need replacing with clinical services. The DOH need to scrap the volume led contracts, subject to manipulation and targets!!! 

Sam Pharmacist, Community pharmacist

Pharmacy2U would charge for delivery if they could, but Internet Pharmacies are prohibited to charge for delivery as per the PSNC contract negotiated for internet pharmacies.

C A, Community pharmacist

Maybe the PSNC should negotiate for internet pharmacys to be allowed to charge delivery?

Reeyah H, Community pharmacist

Why doesn’t the NPA call for a more radical solution? We only need to shut shop for one day - and let the chaos ensue at A and E and GP surgeries. We can’t simply keep writing letters to people who won’t respond to them. 

sayyad naqvi, Community pharmacist

Infact may be a good idea for NPA to reduce their charges ...they've had a good run !! And what have they really achieved for members

Alexander The Great, Community pharmacist

Yes, we need to strike!!!

N patel , Non Pharmacist Branch Manager

At long long article that says it plain in language that would make trump happy
Unfortunately the chinless and ballless wonders at the psnc wont do anything about the dire situation we find ourselves in

paul lisbon, GP

One of the best articles I have read. It's madness how pharmacies have to dispense at a loss. We have made PPA recount our prescriptions several times, and in one particular month, we were underpaid over £7000. Regarding dispensing at a loss, i think pharmacies should get together and take legal action as this has to be illegal and also against TAX transfer rules. 

Alexander The Great, Community pharmacist

Not only are we dispensing at a loss for NCSO prices, the reimbursement assumes we get a 10% clawback of discounts, which is total nonsense!!!

Reeyah H, Community pharmacist

It’s simple to sort reimbursement for cost. Anything that we obtain more expensive than DT, we can endorse NCSO ZD. A copy of the invoice attached, filed into the red sheet. Something for them to do at NHS Pricing. 

Charles Whitfield Bott, Pharmacist Director

You are wasting your time, you will still only be paid DT price. Their are no lines on the NCSO list and have not been for years!


In fact if you are doing this just to make work for the PPA you may find that your payments are delayed, how will you manage if you miss a monthly payment.

Reeyah H, Community pharmacist

I was being sarcastic. 

Sam Pharmacist, Community pharmacist

And the wonderful letter I received from AZ that they are moving to a single wholesaler AAH. Thought they would have learnt their lessons from Pfizer


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