Key Summary
- The unrelenting price increases are creating serious cashflow challenges at a time when the sector is already under strain: James Davies
- The government should fully cover these cost increases for pharmacies as well as mitigate the impact of any potential shortage of medicines for patients: Olivier Picard
- The government’s focus on driving down medicine prices can ultimately increase the cost of medicines for taxpayers and directly lead to shortages: Malcolm Harrison
Community Pharmacy England (CPE) has stated that it has negotiated a record 254 price concessions for June, making this the fourth consecutive month of record highs, and sector leaders point out that it is often forcing pharmacies to dispense at a loss.
The June price concessions is higher than May (219), April (204) and March (201), and some further requests are still being negotiated.
The CPE said that behind the growing number of concessions, they continue to receive thousands of reports from pharmacy owners each month about the medicines they cannot obtain at tariff prices. These reports provide vital evidence and help us build the case for improved prices, it added.
At the ministerial level, the CPE has raised the impact of low drug prices and dispensing at a loss by pharmacy owners, and the need for margin reforms. Its committee members also discussed the issue in detail at their June meeting last week.
The CPE has warned that the medicines supply and pricing situation is worsening and needs urgent attention.
"As work continues with DHSC on the contract reform programme agreed as part of the 2026/27 CPCF settlement, one immediate priority must be a more effective medicines margin framework. In the longer term, there must also be a fundamental review of the current reimbursement model and possible alternatives," the CPE stated.
Sector leaders worried
CPE director of research and insights James Davies said, “Four consecutive months of record price concessions point to a medicines pricing system under sustained pressure. Pharmacy owners tell us month after month that they are having to spend significant time and personal money sourcing medicines above Drug Tariff prices, impacting their ability to provide patient care.
"The unrelenting price increases are creating serious cashflow challenges at a time when the sector is already under strain. Their reports are vital evidence for our negotiations with DHSC, and we will continue to press for improved medicines pricing, better margin arrangements and a reimbursement model that better reflects the realities facing community pharmacies.”
The National Pharmacy Association chair, Olivier Picard, said, "Yet another month of record-breaking price concessions is deeply alarming and shows a system under immense strain. England's medicines market and pharmacy contract are in desperate need of reform.
"Pharmacies in the UK have told us they have seen significantly inflated prices for some common medicines, which far exceed the amount they will be reimbursed by the NHS. This will likely continue as increased costs from the middle east conflict are fed through the supply chain.
"The government must step in to help pharmacies, who are at the sharp end of something that is beyond their control. Pharmacies should not have to subsidise the NHS's medicines bill.
"The government should fully cover these cost increases for pharmacies as well as mitigate the impact of any potential shortage of medicines for patients."
The Company Chemists' Association chief executive, Malcolm Harrison, said, "The fourth consecutive month of record-high price concessions is very concerning and a clear sign of the growing pressure on the medicines supply chain.
"Through competitive procurement community pharmacy has helped make the UK one of the most cost-effective medicines markets in the world. However, when NHS reimbursement prices become unsustainably low, they can undermine the resilience of the medicines supply chain and contribute to shortages.
"As we highlighted in our Saving Pennies, Costing Pounds report, some price concessions are avoidable. The government’s focus on driving down medicine prices to all-time lows can ultimately increase the cost of medicines for taxpayers and directly lead to shortages. Shortages also impact pharmacy teams who have to spend more time sourcing medicines instead of delivering patient care.
"Last year, the CCA established the Medicines Supply Resilience Group, bringing together partners from across the supply chain and Government to identify the underlying causes of fragility in the medicines supply chain and to develop practical solutions that will improve patients’ access to medicines. We remain committed to working with partners to reduce shortages and the growing need for price concessions."
