Pharmacies across the country are “in real economic peril” and “urgently need a roadmap to recovery”, Community Pharmacy England’s (CPE) chief executive Janet Morrison has warned the government.
In an “uncompromising letter” to pharmacy minister Stephen Kinnock, she demanded that the government “deliver rapid progress towards sustainability” in upcoming contract negotiations, including the start of a “credible, long-term recovery plan”.
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She said community pharmacies are “losing money and accumulating debt” and “are struggling to cope with the ongoing demand from patients and the public”.
Accounts filed at Companies House “continue to show the perilous financial position that many pharmacy companies are in, typically with high levels of loss-making, borrowings and net current liabilities,” she added.
Worse off
The letter told Kinnock that pharmacies “are worse off than a year ago” despite 2025’s funding uplift, which it said “has been swallowed by inflation, tax changes and operational pressures”.
It stressed that the sector is facing a £2bn funding gap that leaves “many businesses losing money every month”, and that recent Drug Tariff cuts and Category H changes are “another blow” that further destabilises medicines supply.
Read more: Gov defends NHS move to claw back £158m from pharmacies
Pharmacy opening hours “have fallen dramatically”, the letter added, with 75,000 fewer hours each week since mid-2023 and an 88% decline in “late evening provision”.
And changes announced in last year’s Autumn Budget - including an increased National Living Wage and higher business rates - are “expected to add millions in extra costs”, it said.
Priorities
CPE also said it has “been clear” to the government that upcoming contract negotiations must deliver:
- A plan to close the sector’s funding gap, with “proper indexation for activity and inflation”
- A “roadmap for the future” that aligns with the government’s 10-year health plan ambitions
- A “margin reset and continued write-off of over-delivery”
- Progress towards the Community Pharmacist Prescribing Service - to the extent that this is “achievable for the sector within the funding available”
- Reforms to “aid efficiency and reduce red tape”
Economic peril
Morrison said community pharmacies in England are “entering 2026 in real economic peril”, and that last year’s funding uplift “has not undone the decade’s worth of chronic under-funding” they have faced.
She warned that if “a second decisive step towards sustainability is not taken soon” and progress is not made “on the roadmap for the future”, the government “can expect to have to manage further changes to the network” over the next year.
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These changes “will have a direct and negative impact” on patients and public access to services, put wider NHS plans and ambitions “at risk”, impact high streets and employment, and harm “other NHS services and all those who rely on them”, she said.
“There is much at stake,” she added. “Community pharmacies have so much to offer for patients, their communities and the wider health service, but this will not be deliverable if progress on sustainability is not made and the network is allowed to collapse.”
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Meanwhile, NPA chief executive Henry Gregg said ministers “must get round the table and put pharmacies in a financial position to help deliver the transformation of local NHS services they, and we, want to see.
“Anything less than a 8.9% increase will be a real terms cut, jeopardising patient care and risking further closures.
“We want to see concrete progress towards closing the funding gap and real strides towards new services and independent prescribing – both outside funding for medicines.
“We need to be very clear with the Department of Health that while they have made some progress, they have not fixed pharmacy funding and rapid reform of the system is required to deliver the better service we and our patients want.”
Read more: ‘Appalling’: NPA slams ‘bombshell’ £158m NHS clawback
It comes after the National Pharmacy Association (NPA) and the Independent Pharmacy Association (IPA) last week called on the government to begin negotiations for the 2026/27 contract “as soon as possible”.
Negotiations were expected to commence last autumn, but CPE this month told C+D that it was still awaiting the mandate from the government and the NHS to begin - and now expects negotiations to start early in 2026.
