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PSNC: Funding talks have started, but pharmacy owes ‘a lot of money’

PSNC CEO Simon Dukes (left) told the LPC conference he will take a "fresh approach" to talks
PSNC CEO Simon Dukes (left) told the LPC conference he will take a "fresh approach" to talks

The first meetings with government officials to negotiate England’s pharmacy funding took place this week, but the sector “owes the government a lot of money”, PSNC has warned.

The Pharmaceutical Services Negotiating Committee (PSNC) met with government officials twice this week to begin formal talks for a funding settlement for 2018-19, its director of funding Mike Dent told contractors at the local pharmaceutical committee conference in Birmingham on Wednesday (September 26).

CEO Simon Dukes stressed that while these initial conversations are not yet “substantive”, he is “very pleased” the negotiator has “embarked on a fresh approach” with the government.

PSNC wary of “service creep”

Entering negotiations means PSNC “has to be mindful of two things”, Mr Dukes told delegates.

“The first is that we have to be wary of what I call ‘service creep’. We have done a lot for free and we have to be wary of doing more things for free. It is because of our patient focus that that becomes so,” he said.

“The other thing to bear in mind is that we currently owe the government a lot of money from overpayment of margin in previous years. And that…leads to a very interesting situation from the point of view of negotiation.”

Mr Dent said that while he was unable to discuss the details of the initial funding conversations, the government is “prepared to work” with the negotiator to alleviate some of the sector’s current cashflow problems.

Mr Dukes also referred to concessions PSNC had secured in relation to the updated Quality Payments Scheme – which PSNC director of NHS services Alastair Buxton set out at the conference – and said the negotiator “has also engaged with some of [the government’s] requirements on patient safety”.

PSNC “has to show a willingness to work with” the government after the “two-year hiatus” of funding negotiations, he added.

PSNC has previously said that it will use the negotiations to lay out a new service-based pharmacy contract to the government.

How do you think PSNC should approach the funding negotiations?

Reeyah H, Community pharmacist

The government owes the government a lot of money!!! 

Chas Pharmacy, Locum pharmacist

I am a new contractor, Can the PSNC explain why I owe the NHS anything as I have never been over paid.  Can't understand how it is legal to deliberately under pay with a clear intention to cause closure even though I have never received any overpayment

Chicken Little , Pharmacy owner/ Proprietor

Although in principle you are correct and the reimbursment position is ludicrous....

3 points:
1/ if you carried out financial due diligence you should have picked this up
2/ one of the primary reason Llyods gave for its divestment was 'margin reimbursement', a clear red flag
3/ Your return on investment should have been calculated on a stable margin position (adjusted for overdelevery) therefore short term issues like in article should have been factored into valuation

All that said, I wish you well and agree the PSNC is useless and I can't fathom how the bumbling mike dent is in a job

Stephen Eggleston, Community pharmacist

Chicken Little - That's a bit harsh. Whilst Chas Pharmacy himself has not (according to the article) been overpaid, the view is that Pharmacy has. Therefore, the view to recoup the money is imposed on all contractors by increasing clawback/reducing Cat M (and other) prices and, while this is of n comfort, thems the breaks. However, Dave Downham makes a valid point - contracts have been imposed and funding reduced, so I don't understand how we can "owe the government a lot of money". If, by this, they are fore-warning of another reduction in funding, that is a completely different thing, and to try to disguise it as something else is, at best, disingenuous, and at worst, deceitful of the PSNC and Minister

Dave Downham, Manager

BTW, has anyone done an analysis so I don't have to of the extra incremental work needed to comply with the more onerous quality payments requirements? As Mr Dukes is warning about service creep, I wonder if PSNC have done this work.

Richard Judge, Manager

And FMD and online exemption checking..


Dave Downham, Manager

Mr Dukes ought to be negotiating Brexit.

Pharmacy shouldn't owe the government anything. They unilaterally set the terms for the last 2 years and if they got their sums wrong...tough! New man, new start, new approach...same result, we're screwed.

S Morein, Pharmacy Area manager/ Operations Manager

Pharmacy since the start of the contractual framework has consistently been substantially over reimbursed the cost of medications. There is an agreed retained margin. No more. No less. 

Dave Downham, Manager

Retained by whom? Also, there isn't an agreed margin - the contracts for 2016-7 & 2017-8 were imposed, not agreed.

(Nice to see you're still with us, Ms Morein.)

C D, Community pharmacist

Brilliant. So our approach to the negotiations is to start from a position of saying that we owe the government a lot of money. Well that's all my concerns about the new PSNC chief laid to rest... not.

The eventual outcome will of course be "We tried everything and worked very hard to get a better deal from the DoH and are very pleased with what we have achieved even though we did not get what we wanted as the DoH were nasty to us and wouldn't agree to anything that we asked for."

Please prove me wrong PSNC.

RS Pharmacist, Primary care pharmacist

Very clever tactics from Mr Dukes, when you start from a low base the only way is up. Eventually he will come out saying he worked hard to get an excellent deal after lowering all expectations.

Watto 59, Community pharmacist

Doh! ....PSNC getting their excuses in early.

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