Current pharmacy funding contract ‘completely broken and beyond farcical'

Nemesh Patel emphasises the need to prioritise fixing the funding contract to prevent further pharmacy closures   

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.”

For instance, their teams purchased Lorazepam 1mg tablets last month for £10.75, but were paid £3.16, resulting in a loss of £7.59 per 28 tablets they dispensed.

Similarly, the lowest cost of Tadalafil 5mg tablets they can purchase is £8.25, and the September concession price is £1.89, meaning they will likely make a loss of £6.36 per 28 tablets.

“These examples are just two of hundreds, month in and month out our teams have been experiencing for some years now.”

“Quite honestly, this has been going on for years, and these are now worrying times for the pharmacy sector- the whole contract needs urgent attention from the Department of Health,” Nemesh says.

He emphasises the need to prioritise fixing the current contract to prevent further closures.

“If the NHS valued pharmacies, they would fix this broken contract as a matter of priority, not least given the record number of pharmacies closing in England due to years of chronic underfunding.”

Nemesh adds that the current contract model is unsustainable and that it not only impacts pharmacy operations but also vital patient care.

“Contractors' margins are being squeezed, difficult decisions then need to be made about business structure and resources. This has a knock-on effect throughout the business, impacting not only pharmacy operations but also vital patient care. It appears our goodwill is being taken advantage of, and this is just not sustainable.”

“Pharmacy First is not the answer,” Nemesh says, adding that the initiative does not alleviate these losses, and some of their branches could not reach the minimum thresholds.

“The sooner a far better NHS core dispensing deal for the medication we dispense is negotiated, the better!” he adds.

NPA chief executive Paul Rees said that pharmacies are compelled to pay out of their own pockets to ensure patients get the medicines they need.

He urged the government to halt pharmacy closures, fix the broken funding system, and deliver a new deal for pharmacies to end the terrible toll of closures and cuts to services.