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England’s pharmacies won’t receive any funding increase for 2018-19

The single activity fee will be lowered by 3p – from £1.29 to £1.26
The single activity fee will be lowered by 3p – from £1.29 to £1.26

Funding for England’s pharmacies will remain at its current level of £2.592 billion for the remainder of the financial year, PSNC has announced.

The single activity fee will be lowered by 3p – from £1.29 to £1.26 – from November “in order to keep within the funding envelope”, the negotiator said this morning (October 22).

The recovery of excess margin will be continued following a pause over the summer, but at a reduced level of £10 million per month – compared with £15m up to August 2018.

“This is to repay excess margin earned by pharmacies in previous years, in particular 2015-16, for which the results of the margin survey show that there was significant over-delivery of margin,” the Pharmaceutical Services Negotiating Committee (PSNC) explained.

The £2.592bn funding is £208m lower than the £2.8bn the sector received for 2015-16, before the government cut the sector’s funding for two years.

Current level an "improvement"

However, PSNC stressed that the current funding level is “an improvement” on a further £33m cut intended for 2018-19, which had been revealed during its High Court challenge to the original funding cuts.

“After a lengthy and difficult debate, PSNC unanimously accepted this funding offer,” it said.

The sector is the “very early stages of rebuilding a constructive working relationship with [the] government, its only payer, and needs to demonstrate its desire to move away from the adversarial relationships that has halted progress for the past two years”, PSNC stated.

PSNC chief executive Simon Dukes recognised that “many community pharmacy contractors will be disappointed to hear that there is no more money available for pharmacies this year”.

“Accepting this funding offer was a difficult decision for PSNC to make,” he added. “But we were very mindful of the proposals we have seen previously to reduce funding by £33m this year and, in that context, along with the backdrop of uncertainty in the wider economic climate, we knew that pharmacy was not going to get a better offer from [the] government.”

PSNC also warned contractors they would notice a “cashflow dip” at the end of January as a result of the drop in the single activity fee. Read C+D's coverage here and editor James Waldron's initial thoughts here.

Have funding cuts affected your pharmacy in the last 12 months? Is the picture different in Scotland, Northern Ireland and Wales? Take the C+D Salary Survey and tell us how community pharmacy across the UK is faring – complete the survey here

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61 Comments
Question: 
What do you make of the funding settlement?

Reeyah H, Community pharmacist

The locum going on about their pay- it’s simple. Your rates went down alongside contractors remunerations. We are all in it together! 

Thomas Wilde, Community pharmacist

I do laugh when I see locums moan about being paid £22/hr when I'm a branch manager in a multiple and I'm on the equivalent of £16/hr 

Sue Per, Locum pharmacist

Add the perks, security of employment, paid holidays, bank holidays, sick pay, GPHC fees paid,, pension perks, staff discounts, lower mortgage rates,   etc.......... and it soon equates to over 25+  Per hour!!!!!. 

Thomas Wilde, Community pharmacist

Not many multiples pay registration fees anymore. Lower mortgage rates only help if you live in a part of the country where houses are affordable, unfortunately my landlord doesn't give me a reduced rent because I'm not a locum. Things like staff discount would make a very small difference unless you happen to buy a lot from the pharmacy. So the only difference is holidays, which at the rate locums get paid would still make you £10,000 a year better off, assuming you took a month off a year which is about what we get. Pensions, even if you paid in what a mulitple would have to out of your own pocket you would still be on more. 

Sue Per, Locum pharmacist

if the pastures are greener on the Locums side, then become one. Simple.

 

AJ Smith, Locum pharmacist

its strange thevalues of pharmacies hasn’t plummeted , considering every one seems to be struggling so much

Dave Downham, Manager

They have. The only thing strange is your grammar.

Benie I, Locum pharmacist

Any evidence Dave? or just a facetious retort? I'm an interested buyer.

Dave Downham, Manager

Only the evidence of my eyes and brain. There are more "opportunities" out there than I've seen in a long time as the senior generation head for the lifeboats. They might be on the market at full value, but there doesn't seem to that many going for in excess of asking price and others are being relisted at lower values.

Would be ecstatic to be proved wrong on this.

R A, Community pharmacist

For the best part of this decade, DH has been reducing reimbursement fees. Why is it a suddenly a big shock when this happens again?

Honestly, I wish the remaining contractors would accept the fact that the gravy train for pharmacy is well and truly over. As far as DH is concerned we are expendable.  I think all we can hope is for a miracle. Otherwise, most of us have few options left. 

Mike Bereza, Community pharmacist

"I think all we can hope is for a miracle." stop hoping start doing, make a service in your pharmacy which adds value to the NHS, record the data, prove it and then sell it to your local health authority.

R A, Community pharmacist

I have other plans not sure if it will work out but who knows?

All I am saying is that its best to move on the sector is controlled by the government from all points i.e. control of entry, setting fees for reimbursement and the services it is willing to pay.

Frankly speaking, the government has failed to commision any healthcare services as it initially proposed when it introduced the new contract back 13 years ago. Instead, it introduced that awful Category M and all it has ever done is continuously squeeze the margin. All the NHS wants is an infrastructure to deliver cheap medicines and nothing else. If pharmacies close throughout the UK I doubt they would lose any sleep over it. 

I'm not a contractor but did seriously did consider it but I'm grateful I managed to avoid it. Clearly, people should take stock of the situation and try to get out as soon as they can it's only going to get worse. Pharmacy in the UK is entirely dependent on NHS. This makes it a very vulnerable business model.

I understand for some people it's not a viable option but for those who can afford to get out, that is the best option. ​

Ebers Papyrus, Pharmaceutical Adviser

Bon travail! So much for a new collaborative approach paying dividends. Is the psnc seriously going to sit by and watch vital community pharmacies, their overworked, over regulated, highly trained and committed staff go to the wall. It’s an absolute disgrace that since 2008 community pharmacy has been treated with utter contempt. 

You’re not clinical enough, you’re not efficient, you don’t add value. You must do much more for less and we’ll make you jump through a myriad of new regulations. If you go bust, so be it, pity your patients, your staff and your livelihood.

Sue Per, Locum pharmacist

Moaning about a 3p drop!!!! simple solution, end the freebies, and charge for collection & deliveries, MDS and increase on private services. This will more than make up for the shortfall in the "drop of net profits". If it is still not good enough, then sell up!!. while the prices are still in the positive territory, unlike for other businesses, which are folding

Us locums have had no increase for the past ten years, but a drop of 50% in real terms.And is not as bad for the contractors. You must now know how we have felt over the past decade....

Now we await negative analysis from Mr Modi.

Watto 59, Community pharmacist

If, or rather when contractor's remuneration falls further locum rates are bound to follow. Similarly if there are more closures there will be more locums seeking fewer bookings.  Your apparent antipathy to contractors who pay your fees is puzzling to say the least. However I partially agree with you regarding freebies but it is easier said than done. 

It is a very fine line choosing between losing business and charging for and/ or ending free services.  I have always considered providing free services allied to the NHS contract to be offering an invidious distinction amongst contractors.  The GPhC and previously the R. Pharm Soc  have not ever seemed to consider this, pehaps not daring to start a fight with the multiples. however it may do us all a favour if the GPhC were now to declare such a position.  I do not know what experience you have of working in deprived areas but I think any expansion in private sevices here is limited at best, so selling up or closing down might well be the only options.

Sue Per, Locum pharmacist

Selling up is the logical solution, whilst pharmacies are commanding very good prices, with a queue of buyers!!!, Speak to christies, they will find you a buyer faster than you can so WOW really !!!!, complete by end of the month............speechless.............. 

Dave Downham, Manager

No they're not.

Sue Per, Locum pharmacist

there's a lot of evidence to support your three word statement!!

Dave Downham, Manager

Thanks - glad you finally agree.

N O, Pharmaceutical Adviser

" charge for collection & deliveries, MDS "

Easy said than done. For smaller independents fighting the larger Multiples, these are the FREE services that get stable, loyal customer base. Don't forget rural pharmacies, they cannot fight with Multiples in nearby towns if they do not offer these freebies. For small independents even a PENNY counts.

Peed Off Superintendent, Superintendent Pharmacist

Totally sold down the river by the PSNC again....what no negotiation....just roll over like a dog having his belly scratched! Everyone please contact your LPC tomorrow and tell them that you are not paying any more PSNC levies until this shitshow is sorted out

Watto 59, Community pharmacist

A few months ago I asked the PSNC if Dispensing Doctors had received a severe cut to their renumeration for the years 17-18, the same question would apply for 18-19.  I have not been able to find out myself yet but I was surprised to discover that nobody at PSNC either seemed to know or care what had been arranged for dispensing doctors.  I do not know exactly how dispensing doctor payments are made but I would be very surprised if they would have accepted similar treatment to phamacies without mumur.  I do not know the answer to this at the moment but would expect PSNC to know.  If dispensing doctors have not had similar treatment PSNC should ask publicly why pharmacy has been treated differently

Reeyah H, Community pharmacist

This is an absolute joke. All independents need to unite. Shut shop and go home! How can this even be allowed to happen? PSNC should be absolutely ashamed. 

A N, Community pharmacist

Independents will suffer, however if you do some math you will realize it easily means milions of pounds for multiples as well. More closures are coming?

Angry Pharmacist, Locum pharmacist

REVOLUTION COMETH!! THOU SHALT NOT ROBBETH, LOOT AND PILAGE FOR MUCH LONGER. UNITY IS STRENGTH. THE OPPRESED WILL RISE!’ 

N O, Pharmaceutical Adviser

On top of it, the NCSO prices announced are no way nearer to what we pay. And for this month there is not even the first list (its already 22nd) !!!!

SydBashford Sold&Retired&DeRegistered, Community pharmacist

Another successfully spun positive declaration from the PSNC when there’s a loss.... “However, PSNC stressed that the current funding level is “an  improvement”” !!!!!!  How come they NEVER “unanimously” REJECT such an offer?

Watto 59, Community pharmacist

Could not agree more with you. In addition to unanimously rejecting this they should now at least attempt to coordinate some kind of active protest that most or all contractors could agree to.   Government must think PSNC is Proven Submissives No Contest.   
 

Mike Hewitson, Superintendent Pharmacist

We did in 2016 when DH was forced to impose the funding cuts decision.

I'm not a member of PSNC any more, but I personally think they need more resources to help us move away from this broken system. I want more of the resources paid to LPCs to go to PSNC, to fund a proper transition plan for the organisation and more importantly for the sector. We need real transformational change. 

I'm as disappointed as anyone to see that funding will remain the same (in real terms we earn 15% less today than we did in 2008), especially with general inflation running at 2.2%/year, FMD implementation costs, pensions auto-enrolment and living wage increases. 

Margin is a big part of the problem. The system is broken. Need to move away from margin as a mechanism for delivering funding. 

S Morein, Pharmacy Area manager/ Operations Manager

Mr Hewitson you euphemistically suggest "margin is part of the problem". You are well aware of the vast excesses in margin that contractors have benefited from for decades. The DH now is simply removing some but NOT all that overpayment. No independent contractor still fails to exceed the agreed notional margin at any dispensing volume due to these unwarranted aquistion purchase profits. 

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