Government report finds 78 per cent of pharmacies face uncertain future due to lack of funding

Patients could face severe disruptions to accessing medication and clinical services in the future after a report today found that more than three out of four pharmacies would not be able to continue under the current financial environment.

The long-awaited independent analysis commissioned by NHS England into community pharmacy funding found that around 47 per cent of pharmacies were not profitable in their last accounting year.

Almost every pharmacist (99 per cent) said the funding they received was lower than the full economic cost to run their business over the last three years and this led to significant changes in things such as management of staff.

Among the other key findings, 37 per cent of pharmacies said they would be deterred from closing because of the costs incurred in doing so (e.g. redundancy costs, lease commitments, loss of asset intended to support pension). And an increasing number of pharmacies are defaulting on Direct Debit payments for stock.

A new pharmacy contract is expected to be announced next week and it will need to address the stark reality that around half of pharmacy companies may struggle to meet their debts over the next year, according to the economic analysis report.

It added that the economic cost of providing NHS pharmaceutical services across England in 23/24 was £4.3-£5.7 billion. And it heighted that that community pharmacy costs could rise from £5,063 million to £8,106 million between 2023/24 and 2029/30.

Nick Kaye, chair of the National Pharmacy Association (NPA) said the report “shows the sheer scale of the financial crisis in community pharmacy”.

“The analysis published today reflects the urgent issues our members have faced over the past decade to support millions of people in our communities,” said Kaye.

"This lays bare this new government's dreadful inheritance and we recognise they have a mountain to climb if they are to begin to bridge the funding gap facing pharmacies and maintain services to patients.

“This is a very serious situation for patients which we know ministers will take extremely seriously and we hope the Government’s financial settlement can start to turn the tide for pharmacies that are on the brink.

“The report also points to the need for urgent reform and we stand ready to work closely with ministers to stabilise the pharmacy network and deliver change so that patients maintain access to medicines and improved health services.”

Malcolm Harrison, chief executive at the Company Chemist Association (CCA) said he hoped the economic analysis would bring about lasting change to community pharmacy.

“The economic analysis confirms what the CCA has warned of for many years – a decade of sustained underinvestment in the pharmacy network has had severe impacts and, without significant intervention, will continue to do so," he said.

"We hope that these stark findings will help to bring about lasting change to the direction of travel for pharmacies in England.

"A strong community pharmacy sector is vital for maintaining patient access to medicines and urgent care, and as such to wider national economic growth.”

Community Pharmacy England (CPE) have said a new pharmacy contract will be announced on Monday.

A spokesperson said: “We are pleased that the Government and NHS have published their Economic Analysis, which has informed CPCF negotiations and which they committed to being fully transparent about. The analysis underlines the critical pressures that pharmacies are under, as we have been warning for many years.

"Now that Community Pharmacy Contractual Framework (CPCF) negotiations have concluded we are working urgently to share full news and details about the year ahead with the sector – timings are dictated by government, but this is scheduled to happen on Monday. We are continuing to stress that this is an extremely anxious time for pharmacy owners.”