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In response to a recent Parliamentary question regarding pharmacy reimbursement, pharmacy minister Stephen Kinnock stated that pharmacies were permitted to retain £850 million from the medicine margin for 2023/24. The medicine margin represents the difference between the product price reimbursed by the National Health Service (NHS) and the price at which pharmacies buy them. Rebecca Smith, the Conservative MP for South West Devon, inquired about the number and proportion of community pharmacies that had dispensed medications at a loss over the past three years. Kinnock replied that they do not hold this information, and explained that community pharmacy reimbursement arrangements "do not aim to ensure that every pharmacy is paid as much or more than it paid for every product, but aims overall to reimburse as much as they were bought for, plus the allowed medicine margin." Additionally, the minister highlighted that as part of the Community Pharmacy Contractual Framework (CPCF) for 2023/24, pharmacies are allowed to retain "£850 million from the medicine margin, on top of what they are paid for the medicines they purchase as part of providing NHS services."

The 8th Pharmacy Business Conference, organised by Pharmacy Business, unfolded a dynamic narrative around the theme of 'Pharmacy of Tomorrow', highlighting the trajectory of innovation, adaptation, and the evolving landscape of pharmaceutical services. Attended by over 200 pharmacy owners, industry leaders, and stakeholders, the conference served as a medium for robust discussions and the exchange of valuable insights regarding the future of community pharmacy. Amidst the persistent challenges posed by an underfunded reimbursement system and negotiations with governmental bodies and the NHS for the new community pharmacy contractual framework 2024/25, the conference pivoted towards investing in staff, adapting to change by investing in new technology, and optimising commissioning as pivotal strategies. "Pharmacy professionals are playing increasingly important clinical roles in both primary and secondary care," shared David Webb, Chief Pharmaceutical Officer (CPO), NHS in a video message. He highlighted the NHS's commitment to empowering community pharmacy, with plans to expand services and deprescribe to align with the NHS's focus on preventive healthcare.

Many community pharmacies are under severe financial strain due to chronic underfunding and a mismatch between medicine costs and reimbursement rates. A report by the National Pharmacy Association (NPA) revealed that NHS underpays pharmacies by up to £75 a pack for common medicines, resulting in losses of thousands of pounds each month. The NPA analysis found that, in many instances, NHS funding covers only one-fifth of their purchase costs for medicines. Nemesh Patel, Managing Director of the Southdowns Pharmacy Group, said the current pharmacy funding contract is "completely broken and beyond farcical." Sharing their struggles, he tells Pharmacy Business: "Our teams are wasting hours and hours trying to just source medication for patients when they could be better using that time to clinically support our patients, and then when it comes to reimbursement, the drug tariff prices or concessionary prices are structured such that on hundreds of medications we dispense per month, we will be making a significant financial loss, each and every single time our pharmacies dispense that medication."

The National Pharmacy Association (NPA) has raised the alarm that many community pharmacies are facing losses on NHS prescriptions due to the "broken" funding system. An analysis of prescription drug prices by the NPA revealed that pharmacies are being underpaid by the NHS by up to £75 a pack for common medicines, resulting in losses of thousands of pounds each month. The analysis report released today (16 October) shows the government reimburses £18.06 for a 56-tablet pack of Amantadine, a drug used to treat Parkinson's symptoms. However, the market price of the drug is £94.05 per pack, leading to a loss of £75.99 per 56-tablet pack for pharmacies-amounting to a shortfall of over £1 per tablet. In some instances, NHS funding covers only one-fifth of the cost that pharmacies have to pay for medicines, according to new figures from the NPA.

The 2025/26 pharmacy contract consultation will include a review of the medicine margin and reimbursement arrangements, health and care minister Stephen Kinnock has confirmed. Kinnock made this statement in response to a written question from Nick Timothy, Conservative MP for West Suffolk, who asked the secretary of state for health and social care, if he will review the reimbursement system for pharmacies and GP practices dispensing medicines. Kinnock stated that consultation with Community Pharmacy England (CPE) for the 2025/26 Community Pharmacy Contractual Framework (CPCF) has started and will include "reviewing the allowance for medicine margin as part of funding, and any further changes to the reimbursement arrangements." However, he clarified that there are currently no plans to review the reimbursement system for general practices (GPs) dispensing medicines. Kinnock said: "Dispensing practices receive a dispensing fee, approximately £2.00 to £2.30 per item, which is intended to cover dispensing costs. "This fee is calculated based on forecasted volumes of prescriptions to be dispensed and the size of the funding envelope, according to a methodology agreed by the Department, the General Practitioners Committee (GPC), NHS Employers, and the Welsh Government."

Pharmacy First has demonstrated the enormous value of community pharmacy in providing accessible front-line care. However, pharmacists continue to face several challenges in delivering the service. "Pharmacy First is a success, but it needs proper support to reach its full potential," said Numark chairman Harry McQuillan. In the first year alone, community pharmacies in England delivered an incredible 2 million consultations, highlighting the vital role pharmacists and their teams play in supporting the NHS. "This significant number shows the high demand for accessible healthcare and the trust patients place in their local pharmacy teams. It's clear that when empowered, community pharmacy delivers," McQuillan told Pharmacy Business. Key challenges in providing the service While Numark members have embraced Pharmacy First, McQuillan pointed out several challenges that persist: "Workforce capacity continues to be a concern, with patient demand sometimes outpacing available resources. "The administrative burden, particularly around IT interoperability, data capture, and reimbursement processes, adds complexity." "Additionally, some geographical areas are still struggling with public awareness, meaning more work is needed to ensure patients understand when and how they can access Pharmacy First."

The Department of Health and Social Care (DHSC) has announced adjustments to the reimbursement rates for several Aptamil products dispensed earlier this year, following a pricing error that left pharmacies out of pocket. The changes, which apply to products dispensed between January and April 2024, come after Community Pharmacy England (CPE) raised concerns about discrepancies in the pricing data used by the NHS. The issue stemmed from recent price increases by Nutricia Ltd, the manufacturer of Aptamil, which were not reflected in the NHS Dictionary of Medicines and Devices (dm+d). To address the shortfall, the DHSC has retrospectively increased the reimbursement prices for the following Aptamil products: - Aptamil Anti-Reflux powder (800g): From £14.29 to £16.08 - Aptamil Comfort milk (800g): From £14.29 to £16.08 - Aptamil First milk powder (200ml): From £0.92 to £1.06 - Aptamil Follow On milk (200ml): From £0.92 to £1.06 - Aptamil Lactose Free powder (400g): From £7.70 to £8.39 These changes, effective from January 2024, are intended to ensure that pharmacies are appropriately reimbursed for the cost of these products.

In many cases, a pharmacy's most valuable asset is its NHS contract. This is what buyers are paying for - the right to provide pharmaceutical services commissioned by the NHS and be reimbursed for the medicines dispensed. However, a pharmacy consists of more than just an NHS contract and when buyers look for a pharmacy to buy, they will also examine these other areas - the pharmacy's customer base, its staff, the property it operates from - to name a few - because these are all also crucial to a successful pharmacy. In this day and age, another important consideration is the pharmacy's intellectual property (IP) i.e. the pharmacy's rights to certain types of information, ideas, and forms of expression. At the most basic level, this includes the trade mark in the name of the pharmacy, because all pharmacies will have a name by which they distinguish themselves from other pharmacies. The more well-known the name, the more valuable this form of IP is - mention 'Boots', for example, and most will have an instant association with the largest pharmaceutical retailer in the UK.

Dr Bharat Shah CBE regrets that neither community pharmacists nor pharmaceutical wholesalers in the UK have any control over how Category M reimbursement prices in Part VIII A of the Drug Tariff are determined. The co-founder and chief executive of Sigma Pharmaceuticals was speaking at a conference organised by Avicenna in West London on Sunday (March 6). Introduced into the Drug Tariff in April 2005, Category M is used to set the reimbursement prices of over 500 drugs. The Department of Health and Social Care makes the final decision on the amount of reimbursement (cost of drugs and appliances supplied against an NHS prescription form) and remuneration (fees paid as part of the NHS community pharmacy contract for the provision of a service).

harmacists in the town of Barnoldswick in Lancashire are reportedly suffering from various problems including a lack of medicines and the movement or loss of pharmacy staff. Problems, including delays with supply of insulin, were reported at a recent Pendle Council West Craven meeting. And this week the head of one pharmacy chain, Whitworth, highlighted a range of issues faced by his teams including supply chains, costs, loss of staff and NHS reimbursement for contractors. In Barnoldswick, queues have formed inside and outside pharmacies as people attempt to get prescriptions. Some said they had to wait for days to get what they needed, had made repeat-visits to pharmacies and were unsure when medicines might arrive. They also said the number of pharmacies in the area have fallen over the years. Two town centre pharmacies, Whitworth and Well, are located opposite each other, close to a doctors' surgery. Standing in one queue outside Whitworth was Marilyn King. She said: "I have been waiting seven days to get my prescription for blood pressure and some other medicines. This week, I've come back time after time. But the staff say sorry, they have not got it in because nobody has delivered it. "I came here on Saturday, when there was a queue. But the pharmacist was not here. I came again on Tuesday and then Wednesday. Then finally, just when I reached the front of the queue, they asked me to come back in an hour…

There has been a lot of coverage in the national and pharmaceutical press of the prices being charged to pharmacy owners for certain medicines. Leaving aside the reasons for steep price rises, I have been asked on social media and elsewhere whether pharmacy owners can refuse to supply prescribed medicines if they would make a significant financial loss. Legal obligation The first thing to point out is that the National Health Service Act 2006 imposes a legal duty on the Secretary of State and NHS England to make arrangements for people to receive sufficient prescribed drugs. These arrangements involve the publication of the Drug Tariff. The Drug Tariff includes reimbursement prices or a method for determining prices. Various factors can be taken into account in determining reimbursement prices. The Drug Tariff does not provide a pound for pound reimbursement for medicines that pharmacies supply on NHS prescriptions.

The recruitment of pharmacists in Primary Care Networks (PCNs) has exacerbated a general shortage of pharmacists, revealed an independent review of Integrated Care Systems (ICSs) published on Tuesday (4 April). The review, Rt Hon Patricia Hewitt, highlighted the impact that the Additional Roles Reimbursement Scheme (ARRS) roles for pharmacists are having on the community pharmacy sector. "Contracts with national requirements can have unintended consequences when applied to particular circumstances. For instance, the national requirements and funding of Additional Roles Reimbursement Scheme (ARRS) roles for community pharmacists within PCNs, has on occasion exacerbated the problem of a general shortage of pharmacists, with some now preferring to work within primary care rather than remain in community pharmacies or acute hospitals, compounding the problem of community pharmacy closures and delayed discharges." It set out to consider the oversight and governance of ICS in England and the NHS targets and priorities for which Integrated Care Boards (ICBs) are accountable, including those set out in the Government's mandate to NHS England. As part of this work, Hewitt and her team engaged with a wide range of stakeholders representing various local health and social care settings, including LPCs.

The Company Chemists Association (CCA)'s workforce finding showed that by 2024 eight years' worth of growth of the pharmacist workforce will have been funnelled away from community pharmacies. "In 2019, when NHS leaders realised they were unable to find enough GPs to meet the public's needs, they hastily decided to recruit pharmacists and other healthcare professionals to fill the gaps. This was implemented without any corresponding efforts to increase the supply of pharmacists, creating huge shortages," said CCA. "The bulk of the NHS's recruitment drive was paid for using additional money ringfenced by the NHS - the £2.4bn Additional Roles Reimbursement Scheme (ARRS). We estimate over the life course of ARRS funding (2019-2024), the equivalent of eight years of growth in the number of pharmacists in England will have been funnelled directly into primary care at the expense of other sectors. At the current rate, CCA estimate that community pharmacy will have experienced the equivalent of three fallow years by 2024. To ensure the pharmacy network is protected and able to take pressure off other parts of the NHS, there are several urgent measures which must be implemented. Countering the impact of primary care recruitment: Community pharmacists should be commissioned to provide 'packages of care' on behalf of GPs, rather than taking pharmacists away from accessible high street settings.

Parliamentarians continue to highlight the serious challenges faced by community pharmacists, calling for increased support for the sector. On Wednesday, January 8, during Prime Minister's Questions, Marie Goldman, Liberal Democrat MP for Chelmsford, drew attention to the issue of pharmacies dispensing medications at a loss. Goldman cited the case of a pharmacy owner in her constituency who is 'sometimes forced to pay over 100 times more' for a particular mental health drug than the contract reimburses. Dipak, the pharmacy owner, has been serving his community since opening his pharmacy in 1991, often greeting patients by name. However, he is now struggling to keep his business afloat as his NHS contract no longer covers the cost of the drugs he dispenses. "Dipak is dipping into his life savings to keep the pharmacy afloat. I am sure many other pharmacies are doing the same," Goldman stated. She asked the prime minister whether he agreed that "no pharmacist should be forced to use their own money to keep their pharmacy viable."

The Challenges There cannot be anyone working in or with community pharmacy that either feels or sees the pain that emanates from the current operating climate. Pharmacy closures; increased workload and operating costs; increased patient and commissioner expectations; and, more fundamentally, an inadequate, undervalued and poorly structured remuneration and reimbursement contractual framework. As important as they are, we will not focus on these points here as they are not in the control of pharmacy owners and managers. They are the responsibility of those organisations that represent them at a national and local level who must deliver a better outcome as difficult as that may be. However, there are matters which are in the control of pharmacy owners and managers. These include their premises, their team, their systems and processes, their relationships with other healthcare providers and the broader community, their NHS and private service offer, and how they promote and deliver them to give the best patient experience. In order to create the head space to develop and implement a business plan, pharmacy owners and managers must make time to work on their business as well as in it. Then it requires the capacity and capability within their team to deliver the services and that excellent patient experience.

The new 'How to Involve and Engage Patients on Digital Health Tech Innovation' learning module has been created specifically to support the development and delivery of patient-centric technologies, at a time of critical digital transformation in the NHS. The foundation level module will be freely available at www.orcha-digitalhealthacademy.com and on the Health Education England NHS Learning Hub (learninghub.nhs.uk). No training previously exists on conducting effective patient and public involvement and engagement (PPIE), leading to wasted resource on unsuitable technologies at a time when the healthcare system simply cannot afford it. The module aims to educate innovators who are creating new technology, and the clinicians who are prescribing these solutions. Crucially, the module also provides valuable support to the 500 NHS clinicians who are on the Clinical Entrepreneur Programme. The module is an introduction to the first evidence-based framework for PPIE, launched by the University of Plymouth, the AHSN Network (the national voice of the 15 academic health science networks in England) and Boehringer Ingelheim UK & Ireland. It helps to fast-track learning for the EnACT principles described in the framework, outlining how to involve patients in product innovation and critical issues such as data privacy, intellectual property, inclusivity, reimbursement, useability, and recruitment of patients.

The Pharmaceutical Services Negotiating Committee (PSNC) has developed a webtool to help community pharmacy contractors estimate the impact on their payments under the new discount deduction system. The calculator aims to illustrate the changes to discount deduction that a pharmacy could experience during the transition to the new arrangements from October 2022 to January 2024, when the new system will be fully in place. PSNC's calculator requires contractors to input information about their individual pharmacy dispensing mix (i.e. split of reimbursement by appliances, brands and generics) to provide an estimate for the level of impact the new discount deduction system will have. "The impact on individual pharmacies cannot be estimated without using dispensing mix data, meaning that any estimates which do not take this into account will not be reliable," said PSNC. For years many contractors have been frustrated by how discount is applied to their accounts and have often raised concerns about the blanket nature of its application to PSNC.

The regulators have added 10 new products to the 'Drugs for which Discount is Not Deducted' (DND) list from Thursday (01 June). Community Pharmacy England on behalf of its members had made further applications to the Department of Health and Social Care (DHSC) and the NHS Business Services Authority (NHSBSA), resulting in the inclusion of 10 new products in the DND. More than 610 products are granted DND status following checks made by Community Pharmacy England's dispensing & supply team over the past 3 years to ensure fair reimbursement for our members. The DND list is updated monthly by the DHSC and includes grouped and individual items. Individual items are separately listed in Part II of the Drug Tariff. Any items covered by the 'Group Items' heading are not listed again individually in Part II. "We will continue our work to assess whether other drugs and appliances fulfil the current DND entry requirements under either the 'Group' and 'Individual item' criteria and make applications to NHSBSA and DHSC, on behalf of our members accordingly," said Community Pharmacy England.

The Digital Medicines Transformation Portfolio (DMTP) was able to deliver the electronic prescription service (EPS) in Wales - just 20 months after starting the project - with support from key partners in the NHS and industry. Patients in Rhyl were the first to benefit from the new service, which allows GPs to send prescriptions electronically to the patient's choice of community pharmacy, without the need for a paper form. The new EPS service is currently in a live testing phase, with a phased roll out across Wales expected from January 2024. DMTP, which is hosted by Digital Health and Care Wales (DHCW) has worked closely with NHS England, who provided the core EPS platform that has been developed for use in Wales. NHS Wales Shared Services Partnership has also made a major contribution in the project, incorporating digital reimbursement to pharmacies and putting security measures in place.

The NHS Business Services Authority (NHSBSA) has published the Drug Tariff Category M price list for July which reflects an increase in reimbursement level of approximately £5m per quarter. An adjustment of -£23.8m was announced, in light of the results of the margin survey (latest result up until end of December 2022), and the phasing down of the additional £100m agreed across years 4 and 5 as part of the Community Pharmacy Contractual Framework and uplifts for underlying market prices (between January - March 2023). Community Pharmacy England has agreed the adjustments based on the analysis of margin delivery and on current projections for 2023/24. It said: "The objectives are to ensure full delivery of agreed margin and smooth delivery as much as possible. As always, the impact on individual pharmacies will vary depending on dispensing mix."