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NPA: Hub and spoke impact assessment proves justification for pharmacy cut was hollow

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The National Pharmacy Association (NPA) has called for an immediate reconsideration on pharmacy funding as the official impact assessment of hub and spoke dispensing reveals that only limited extent of savings may be possible under the model.

The total savings to the pharmacy sector’s operational costs are calculated to be approximately £1 million by 2024, when the current contractual framework comes to an end. This compares to well over a billion pounds withheld from the sector over the contract period (2019-24), due to flat funding below inflation.

The NPA claims that the real-terms funding cuts since 2019, and indeed earlier cuts, were based in part on government promises of cost savings through hub and spoke.

Nick Kaye, NPA vice-chair, said:“The current 5-year funding deal promised clinical service developments, but with a downward ratchet on funding predicated on dispensing efficiencies. The promise was that independents would have the same opportunity as large multiples to secure the benefits of outsourcing elements of dispensing to a hub. Now it is clear that hundreds of independents won’t be in a position to benefit at all and that the savings for others will be miniscule compared to the money taken out of the global sum.

“These official figures confirm that there is an enormous gap between money taken out and any potential savings from hub and spoke.

Kaye called for an “honest conversation about efficiencies – a conversation that reflects the reality for independents struggling to survive.”

“The government should go back to the drawing board on pharmacy funding, now that one of the central arguments for cuts has been exposed as completely hollow,” he added.

According to NPA calculation, had the global sum increased in line with inflation (including future projections) throughout the five years of the deal to 2024, more than £1.2bn in funding would have flowed to community pharmacy by 2024.

The Department of Health and Social Care impact assessment accompanied the launch of a consultation on legislative changes needed to permit hub and spoke between different legal entities. The consultation ends on 8 June.

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