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Theresa May: Pharmacy funding has 'risen' in recent years

May: Most pharmacies receive establishment payment regardless of size or quality

Spending on community pharmacy has “actually risen” in recent years, the Prime Minister has said to explain the funding cuts in England.

Theresa May said this afternoon (March 1) there had been an “increase of over 18%” in the number of pharmacies in the country in “the past decade”, and “most” receive the £25,000 establishment payment “regardless of size or quality”.

Ms May was responding to a question from Labour MP and all-party pharmacy group chair Sir Kevin Barron in today’s Prime Minister's Questions.

Sir Kevin said he had received an email from a pharmacist in his constituency explaining that the drop in funding had already forced him to reduce “staff and services”.

“This week he received a notification of the payments for prescriptions dispensed in December of last year, and he has had a reduction of nearly £9,000 – which represents 18.8%,” Sir Kevin said.

“This is well beyond the 4% the pharmacy minister talked about in October of last year.”

Sir Kevin asked the government to revisit the pharmacy funding cuts “as a matter of urgency”.

In response, Ms May claimed two-fifths of pharmacies are within 10 minutes’ walk of “two or more” others, and the average pharmacy receives “roughly £220,000” in NHS funding.

The system needs "reforming" so that NHS resources are spent “efficiently and effectively”.

The government “made changes” last summer to make “greater support” available to pharmacies in “particular areas”, Ms May added.

You can watch the full exchange on Parliament TV here.

26 Comments
Question: 
What do you think of Theresa May's comments?

Farhat Ahmed, Locum pharmacist

Is anyone able to put the detail into the following comment:-

" and the average pharmacy receives “roughly £220,000” in NHS funding."

How many items does this relate to and what is the breakdown of the funding?

ben stokes, Student

as-salaam aalikum 

as an owner who does 4000 items a month with a 40 hr contract, its not as bad as ppl make out...still good money to be made in pharmacy

Dave Downham, Manager

That old chestnut of an "average" pharmacy. £220k is approx total funding divided by number of pharmacies. 

Leon The Apothecary, Student

Her answer is very political and only takes the context in which it looks favourable. 

Leon The Apothecary, Student

I suspect Quality Payments are going to hit some pharmacies very hard indeed.

Andrew Morrison, Superintendent Pharmacist

And whose fault was it that the number of community pharmacies rose?.....The government were so keen on 100 hour pharmacies they opened the floodgates. Now they find that there are too many pharmacies.....this is all due to their making.

L H, Community pharmacist

Indeed.  NHS Digital statistics say there were 1,161 100 hour pharmacies in 2015/16, which represents 10% of the total number of community pharmacies.

 

Just below that stat, I came across this.  There was the general pharmacy opening/closing stats.  Interesting...

2012/13    264 opened vs 51 closed

2013/14    207 opened vs 55 closed

2014/15    48 opened vs 33 closed

2015/16    47 opened vs 39 closed

Wonder if it'll be 2016/17 or 2017/18 when it'll swing to more closing than opening and by how much?

Dave Downham, Manager

Good stats - anyone want to correlate increase in item numbers with number of pharmacies? I bet the former outstrips the latter greatly.

Angela Channing, Community pharmacist

Well, Tony Blair's making ! 

Valentine Trodd, Community pharmacist

People aren't investing their hard-earned cash opening pharmacies for the greater good of society. The assumption must be that the reason for the 18% increase in the number of pharmacies is that it is quite a profitable investment. Maybe a few of these contractors whinging about cut-backs should open up their books for scrutiny so we can see the whole story?

Leroy Jackson, Community pharmacist

Double plus good payments made to pharmacies. All confirm they are double plus plus happy with government and we will have victory in Eurasia soon.

Soon-To-Be Ex-Pharmacist, Superintendent Pharmacist

??????

Dave Downham, Manager

1984 - keep up, Winston!

Simon MEDLEY, Community pharmacist

18 % increase  in pharmacy numbers over a decade '' - so thats not the same as an 18% increase in funding is it ?  Where are the figures for this ? Anyway even if it is- is that not the same as 1.8% increase each year,- inflation has been above that for some of the years and rx volume has been way above that.

S Morein, Pharmacy Area manager/ Operations Manager

Ummm...when the contractual framework started the notional global sum was c£1.6bn this rose to nearly c£2.8bn in the decade (PSNC figures). Even allowing for inflation and the increase in contractor that is a substantial increase per contractor both ahead of inflation and ahead of total pharmacy numbers.

Shaun Steren, Pharmaceutical Adviser

We must also consider net profit. Employee/locum wages have fallen significantly and the number of items has increased by over 50% without any increase in staff hours (an actual reduction in staff hours in my experience). So unit costs are down considerably. 

We need a thorough and independent investigation into the net profits of contractors. One thing is for sure - community pharmacy is very profitable - what we need to know is exactly how profitable across the spectrum of contractor types.

For some reason I think there would be great resistance to such an 'intrusion'. I for one would delight in a forensic investigation.

Clive Hodgson, Community pharmacist

And perhaps a further forensic investigation of the tax affairs of the large Pharmacy Multiples?

Some have gone to extraordinary lengths with highly complex and novel schemes devised specifically to avoid UK Corporation Tax. These schemes are probably legal but not in any way what a reasonable member of the public would consider equitable.

Meera Sharma, Community pharmacist

Clive, completely agree with you. While the govt is looking for ways to increase revenue, tax loophol;es need to be thoroughly looked at. Yesterday's news - Cafe Nero pays no tax in the UK. I suspect there are a lot of companies out there need scrutiny of their tax affairs - pharmacy multiples are no exception!

Valentine Trodd, Community pharmacist

“...received a notification of the payments for prescriptions dispensed in December of last year, and he has had a reduction of nearly £9,000 – which represents 18.8%,” Sir Kevin said.

A reduction compared to what? December the previous year? The previous month? Same value of items, same number, same MURs, NMS, etc? It makes for a good headline, but the devil is very much in the detail.

Martin Bennett, Superintendent Pharmacist

iIt's a reduction against what we would have been paid using the fee rates paid in November. This is not fantasy. I've been analysing FP34Bs  for the last 44 years! The DH quoted a 12% cut  PSNCs calculator showed 14% for us, my calculation estimated 19% . It has turned out to be 18.8% cut  

 

 

Valentine Trodd, Community pharmacist

Thanks for the clarification - makes things a bit clearer.

S Morein, Pharmacy Area manager/ Operations Manager

An accurate assessment Valentine. Meanwhile for the last decade contractors have made record high  profits (net and gross) with record high levels of gross profit with record high levels of goodwill values for their businesses. Yet the ususal suspects continue to make strange comments about the imminent collapse of the so-called network. 

Martin Bennett, Superintendent Pharmacist

Do you have any evidence to support these assertions in the last year? It certainly doesn't seem that way to me  

 

S Morein, Pharmacy Area manager/ Operations Manager

Certainly....ask any of the business transfer agents. Ask for copies of contractors audited accounts and the multiples used for calculating goodwill. All have substantially increased. 

Martin Bennett, Superintendent Pharmacist

Business Transfer Agents are trying to encourage sales - that's how they make money. So you will find that it is always a good time to sell!  The accounts I see have not shown increases in net profit  Be that as it may, a 19 % cut badged as 12% verges on criminal deceit  

 

Angela Channing, Community pharmacist

And NOT shared it around amongst the locums and employee pharmacists either!!  

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