Several MPs have warned that the Government’s ambitions for more care in the community cannot be delivered unless pharmacy funding is put on a sustainable footing.
A Westminster Hall debate on Wednesday (9), sponsored by Leicester East MP Shivani Raja, focused on Government funding for local pharmacies and the pressures affecting pharmacy businesses across England.
In her opening remarks, Raja said community pharmacies are being asked to play an increasingly important role in primary care, but warned that the sector needs certainty to deliver.
The Conservative party member said the sector is nearing a "tipping point" as independent economic analysis has revealed that community pharmacy is facing a funding gap of around £2.5 billion.
"As a consequence, England lost roughly 1,000 pharmacies between 2016 and 2026, which is an 8% decline. In Leicester East, we have seen our local provision drop from 32 pharmacies down to 29, which is a net loss of 9% of our local community network."
She said the loss of three pharmacies may sound like a "minor shift", but the implications are deeply concerning.
"Fewer pharmacies means longer journeys for frail patients, longer queues at the counters that remain open and increased pressure on nearby GP surgeries."
Raja said she and her team had several conversations with the owners and staff of pharmacies across Leicester East.
"They have raised several alarming issues; I hope that, by outlining them today, we can collectively commit to positive and constructive changes to support these independent businesses."
Reimbursement model
She said the current reimbursement model for medicines fails independent providers.
"Pharmacies are expected to buy medicines up front. They can then wait anywhere from two to three months for the NHS to reimburse those costs.
"To make matters more severe, the NHS reimbursement calculation works on the assumption that pharmacies receive massive bulk-buy discounts from suppliers.
"Large national chains may possess the purchasing power to make that assumption work, but such bulk discounts simply do not exist for a small, independent community pharmacy in Leicester East. Small pharmacies routinely pay more to acquire necessary drugs than the NHS repays them," she said.
Raja said that though concessionary pricing mechanisms exist to adjust for market spikes, the delay in the adjustments forces independent contractors to constantly bridge the shortfall.
"That disparity forces wholesalers to look overseas for cheaper stock, creating supply chain bottlenecks and leaving local pharmacists to face the frustration of patients when vital medicines are backordered for weeks."
Rising costs
Raja said the pharmacy owners are also caught between rising operating costs and fixed incomes.
"Over recent years, overheads have increased right across the board. The recent decisions to raise employer national insurance contributions and the minimum wage and to escalate business rate liabilities have significantly increased the financial burden on pharmacies up and down the country.
"Furthermore, unlike other small high street businesses, community pharmacies receive no business rates reliefs on their premises - a major oversight for essential healthcare providers operating right at the heart of our local economies."
She welcomed Prime Minister Andy Burnham's move to provide business rates relief for the leisure and hospitality sector, and wanted him to extend the same to community pharmacies.
"GP and dental premises benefit from the NHS reimbursement of business rates, while community pharmacies, which also provide vital frontline services, do not.
"Introducing a form of relief to end the disparity for local pharmacies would make a substantial difference," she said.
"No small business can survive indefinitely when its costs are rising, its prices are frozen by the Government and it is expected to deliver services for free," Raja said.
She wanted the Minister to address four specific areas - reimbursement reform, ensure contractual and operational certainty, provide business overhead and rates relief, and workforce and capacity support.
"We must review the drug reimbursement formula and concessionary pricing mechanisms, so that payment calculations reflect the actual market acquisition prices paid by the independent pharmacies, rather than relying on assumed bulk discount rates that small independent businesses simply cannot access.
"We need to update the CPCF to ensure that core funding is predictable, transparent and fair, rather than heavily dependent on variable, patchy referral targets managed by NHS bodies over which pharmacy owners have no control.
"I urge the Minister to work with colleagues in the Treasury to address the cumulative tax and cost burden facing small health providers. That includes reviewing business rates liabilities and the impact of the employer national insurance contribution increases on independent high street providers.
She said the NHS workforce planning must balance the expansion of primary care roles with the baseline staffing requirements of high street community pharmacies. "As policies such as independent prescribing expand, Ministers must ensure that independent pharmacies are provided with the direct resource and funding needed to put clinical roles into practice safely."
Funding uplift not enough: Sadik Al-Hassan
In his address, Sadik Al-Hassan, North Somerset MP and All-Party Parliamentary Group on Pharmacy Chair, welcomed the funding uplift for 2026-27 in the pharmacy contract, but added that it was not enough.
"Funding fell by £800 million in real terms between 2015-16 and 2025-26, even as prescription volumes rose by 20%.
"Last year’s funding settlement was a great amount, but that has been eaten up by a great amount of costs, and the Government’s independent analysis found a £2 billion annual funding gap.
"Nationally we have lost nearly 1,500 pharmacies since 2017 — a 15% contraction of the network."
"My message to the Minister is simple: pharmacies are not asking for charity. With some reports suggesting that only 14% of pharmacies are profitable, I am asking for money not to make the job of pharmacy easy, but to make it possible, because it should not be this hard. Pharmacists are asking to be paid properly for work they already do brilliantly.
"I urge the Government to set out a road map for a six-year funding settlement of £600 million in today’s terms, to invest in the workforce, to allow pharmacies to realise their ambition and finally to close the funding gap, before we lose any more of these vital neighbourhood." he said.
Expand Pharmacy First: Sunak
Former prime minister Rishi Sunak lauded the pharmacists for going "above and beyond for their patients".
He said he is proud that his government introduced Pharmacy First, though it got off to a "slower start than we would have liked". He, however, expressed satisfaction at the programme has shaped up subsequently.
He wanted the government to increase awareness about the scheme and include more ailments. "We could also look across the border to Scotland to see what other conditions the service could be expanded to."
Sunak wanted the pharmacies to be adequately funded as it will help "relieve strain elsewhere in the healthcare system. If we look at system costs, pharmacies can help save money."
Rachel Gilmour MP (Tiverton and Minehead) and Lee Dillon MP (Newbury) described the impact of reduced access to pharmacies in their constituencies.
Shockat Adam MP (Leicester South) and Edward Morello MP (West Dorset) warned that pharmacies are being asked to deliver more for less.
Alison Bennett MP (Mid Sussex) called for “an exemption for pharmacies from the national insurance contribution increase”.
Gagan Mohindra MP (South West Hertfordshire) welcomed the Government’s commitment to shifting healthcare into community settings, but said this would not be feasible without matching financial support.
Greg Stafford MP (Farnham and Bordon) called on Ministers to move quickly to expand Pharmacy First and provide clarity on the timetable for introducing independent prescribing.
Government response
Responding for the Government, Minister Dame Diana Johnson acknowledged that “many community pharmacies face financial pressures” and said Ministers are seeking to ease these, pointing out to the funding uplift after the Labour governemnt assumbed office.
She also reiterated the Government’s ambition for community pharmacy to support shifts towards community and preventive healthcare. A third shift to use more digital technology would be rolled out through neighbourhood health services, including plans to provide medicine shortages information “in real time” to support give GP prescribing.
CPE to work with government
Community Pharmacy England chief executive Janet Morrison said: “MPs from across Parliament were clear that community pharmacies are essential to the Government’s ambitions for neighbourhood health and care closer to home. But they reflected our call for that ambition to be matched by sustainable funding and practical support. Pharmacies cannot keep being asked to do more while facing rising costs, medicines supply pressures and uncertainty about the future.”
Community Pharmacy England will continue its work with MPs and Government to make the case for a funding model that gives pharmacy owners the confidence to invest in services, teams and premises, and enables pharmacies to play their full role in supporting patients and the NHS, she added.
Ahead of the debate, Community Pharmacy England briefed MPs on the financial and operational pressures affecting pharmacy owners, with more than 40 MPs receiving a briefing note alongside tailored constituency briefings.
Several MPs referenced findings from the Pharmacy Pressures Survey as evidence of the continued financial and operational strain facing pharmacies.
