Interview: CPE chief on closing funding gaps and ‘keeping the lights on’

Ahead of negotiations for the 2026/27 pharmacy contract, Community Pharmacy England (CPE) chief executive Janet Morrison sits down with The Pharmacist’s Megan Ford to discuss her priorities for the sector, as well as the most pressing challenges and why she believes contractors need a plan for community pharmacy that goes beyond a one-year period.

Pharmacy owners continue to be up against what Janet Morrison describes as ‘serious cash flow problems’ – leaving many struggling to invest in new services or the future of their businesses, and in some cases, concerned about keeping the lights on. It’s therefore perhaps unsurprising that the CPE chief executive says her main priority is ‘closing the funding gap’ and ensuring the sector is ‘sustainable’.

At the time of interview at the end of July, Ms Morrison said it was at the hands of the Department of Health and Social Care and NHS England to set a date for negotiations on the next Community Pharmacy Contractual Framework (CPCF) to commence. And while this was meant to begin this month , Ms Morrison says she was hopeful they would begin the ‘right side of Christmas’ and much further in advance of the beginning of the financial year compared to previously.

While we’re still awaiting kick off for the negotiations on the next Community Pharmacy Contractual Framework (CPCF) Ms Morrison hoped the Department of Health and Social Care and NHS England would begin talks on the ‘right side of Christmas’ and much further in advance of the beginning of the financial year than previously.

A key challenge to ministers was that  community pharmacy has a plan that goes beyond a year so that contractors can try and plan for the future. She recognises that the sector got ‘very badly burnt’ by having a five-year deal previously and that there would not be enthusiasm for that among the sector for a return to this.

But she says: ‘I think people feel like they need to be on a firm footing. They need to be sustainable, and they need to know how things are going to develop in the future, to have a bit of a better plan than just going year by year, waiting for the latest announcement.’

Ms Morrison adds: ‘My main priority is that we close the [funding] gap and that we've got a sustainable sector and we've got plans for the next three years or so to say this is how community pharmacy will develop, and that, if there's sufficient resource there, that we have some plans for how we can develop services more in the future and build on what we currently do.’

Pharmacy owners ‘struggling to be optimistic’

After much delay, a new £3bn deal was agreed for the sector and announced in March 2025, for the 2025/26 financial year. The deal included a further £215m available for contractors to earn through Pharmacy First, blood pressure and contraception services, as well as the commissioning of a new national emergency hormonal contraception service. The medicines margin for 2025/26 was also increased to £900m and the single activity fee (SAF) was increased by 19p, effective from April 2025.

But Ms Morrison says she recognises the financial constraints pharmacies continue to face, as well as concerns around whether the deal will be followed through.

From speaking to contractors and meeting with Local Pharmaceutical Committees across the country, Ms Morrison says it is ‘quite clear that there are still significant financial challenges for the sector’. Things are being made especially difficult due to recent National Insurance and National Minimum Wage changes, as well as margin clawbacks.

‘There are still quite serious cash flow problems,’ says Ms Morrison. Linked to this, are capacity issues.

‘There’s a lot of services and things that pharmacies can do, but how do they devote their resources, their staff, to all of the activities they need to be doing – and particularly if they've trimmed a bit on their team to reflect those increased costs.’

The CPE Pharmacy Pressures Survey 2025 recently revealed pharmacy owners’ ongoing struggle to keep their businesses afloat – with 45% of pharmacy owners reporting dipping into their personal savings to support their business and only 6% saying their business is profitable.

Related Article: Pharmacists concerned they will see ‘very little’ of contract funding boost

When asked about the morale among pharmacy currently, Ms Morrison says: ‘people are still struggling in terms of being able to be optimistic about the future.

‘we were in such dire straits before the last settlement that there has been some improvement. But I wouldn't say people feel optimistic.

‘they are concerned about whether the deal that we got will be followed through, that it was a first step, and that there will be further steps to ensure their sustainability.’

She adds: ‘the mood is not dire, certainly it's not quite as angry and frustrated, but people still very, very concerned that they can keep the lights on and that they can serve patients’ needs and the community needs.’

‘Serious medicines supply issues’

Pharmacies also continue to face ‘some serious supply issues’ when it comes to medicines, says Ms Morrison.

‘It is a regular issue and there’s huge variety of reasons why,’ she says, pointing to concerns around the availability of raw ingredients, as well as changing in prescribing practices and sudden surges in demand.

A survey by CPE revealed over the summer that almost three-quarters (74%) of pharmacy owners in England say their business is spending ‘longer than ever before’ to procure medicines amid worsening supply issues.

‘It continues to be really challenging, and  for patients [aswell], and that means that pharmacies face quite a lot of frustration from patients.’

This is why allowing pharmacists to substitute medications in some circumstances should be explored more, she says. ‘It’s not necessarily overnight, everything, but to start with some small steps towards… “I haven’t got this, but I could swap those in”.’

However, the underlying problem for pharmacies is that ‘we're right at the end of this long supply chain’, says Ms Morrison.

‘We don't have enough money in the margin system to get us through where if demand rises, prices rise, we've got so little headroom that it makes it more likely that pharmacies are dispensing at a loss,’ she adds.

‘In the past, there was always swings and roundabouts. You'd make a bit here, and you'd lose a bit there. It's now got to the point where people feel really squeezed, and so there is a lot of frustration and anger about the margin system.’

The government suggested in a policy paper published in August that community pharmacists will be able to supply an alternative strength or formulation against a prescription in response to medicine shortages under plans due to be put out to consultation. The paper also pledged to consider options to ‘improve better reporting in supply issues’, recognising that not all suppliers report disruption in a timely manner.

This would include a consultation on how the government can ‘ensure the information provided by suppliers on shortages and discontinuations is sufficient to allow us to put timely measures in place to manage supply and mitigate the impact on patients’.

Pharmacy First ‘continues to grow well’

It won’t be long until the Pharmacy First service in England hits its two-year anniversary in January 2026. Ms Morrison says the service has seen ‘exceptionally positive’ feedback from the public and ‘continues to grow very well’ – though recognises that due to the conditions included (especially sore throat) it is largely a ‘seasonal service’.

For example, there were over 12,000 more Pharmacy First sore throat consultations carried out in December 2024 (97,961), compared with May 2025 (85,427), according to data from the NHS Business Services Authority (NHSBSA).

When speaking with contractors, Ms Morrison says there is ‘quite a lot of demand’ to build on Pharmacy First and have more conditions covered within it. She says CPE has had discussions about adding to the conditions, as well as independent prescribing and how this could be incorporated into Pharmacy First – especially given the incoming expansion of this workforce in pharmacy from next year, when new graduates will hold the qualification.

‘But we have been very, very firm with the government that they can't keep adding more and more services in if it's not sustainable,’ she says.

‘So, we will say they can only add if they've got the money to pay for it.’

Another thing to consider is that if clinical services within pharmacy continues to grow, contractors may need to think about the space they have and whether an additional consultation room is required. The cost of doing so would not be covered by the government, but owners themselves.

Pharmacies will also consider whether, in order to stay afloat, they need to bring in more private services. They may think ‘if they've got one consult room, will they prioritise the private service, or will they prioritise Pharmacy First, or other things?’ says Ms Morrison.

‘We can’t just keep adding lots of new slivers of services if we don’t think about capacity to deliver the systems and the support and facilities [needed] to support that and to really think through whether we’re getting the most out of the services we’ve already invested in,’ she adds.

Related Article: Expansion of Pharmacy First a ‘key step’ in delivering preventative care

The CPE chief executive says the negotiator has always had the principle of ‘no new services without new money’ and that this will remain the case. She used an analogy comparing the government’s asks to an overfilled shopping trolley.

‘I kind of introduced an analogy about the government coming up to the checkout at the supermarket with an overloaded trolley, with everything they had last year, but they're bigger packs, and the prices have gone up, and then they've thrown in a couple of new services, and they say “I haven't got any more money”. And so we have really, really instituted that affordability criteria. So that will be really important for future settlements.’

‘Not convinced hub and spoke is the magic wand’

Financial pressures mean many pharmacies struggle to invest in new technologies, including dispensing robotics.

With legislation to allow hub and spoke dispensing between different legal entities expected to come in October, Ms Morrison says that while the model chosen is welcome, it’s unclear how much of a help the move will really be. Legislative changes will allow model 1 (patient – spoke – hub – spoke – patient) hub and spoke dispensing across different legal entities. The legislation move was first promised in the sector’s five-year deal for 2019-2024, and so Ms Morrison says ‘it’s taken an awfully long time to come to fruition’.

‘We are happy with the model picked because that was really important to us and to contractors, that we don't undermine the accountability, clarity of responsibility and the relationship with patients. That model includes that you go back through the spoke [the community pharmacy], not direct from the hub and so that model is important,’ says Ms Morrison.

But she adds: ‘The jury's out as to how many people will go into it, because it very much depends on the financial contract that they have with the hub, and also how margin is shared out or not.’

With a lot of questions around the move, Ms Morrison says she’s ‘not convinced it’s going to be this magic wand that’s going to make a wonderful difference’, especially since other measures like robotics and investment into dispensing efficiencies have already been put in place at some pharmacies.

‘If you're barely being able to pay your wholesaler for your drugs, you haven't got the capacity to really invest for the future,’ says Ms Morrison. Though where it is being used, it is enabling pharmacy teams to ‘switch more energy’ to consultations and services and away from checking boxes, she adds.

Pharmacy and the10-year plan for the NHS

Turning to the government’s recently launched 10-year plan for the NHS, Ms Morrison notes there is ‘good mention of community pharmacy’ but that it lacks solid details or a proper plan for execution.

She welcomes the blueprint’s focus on the use of independent prescribers and the role of pharmacy in supporting complex medicine regimes, obesity, blood pressure and other long-term conditions and vaccinations. But she says: ‘It’s not entirely clear how and when those things might happen.’

She also suggests the plan’s talk of transitioning pharmacy from dispensing to being part of a neighbourhood health service as potentially concerning. ‘We have to hope that doesn't mean that the government thinks there's more efficiencies that can be driven out of dispensing because really, because of the cuts that we faced over the last 10 years, there is no more efficiency to be had, and most people have done as much as they can,’ says Ms Morrison.

There’s also questions around what a neighbourhood health service means for pharmacy, she suggests, especially as the government’s description appears to be ‘very GP centric’.

‘GPs are critical and important, but it's not clear how would we as pharmacies engage with that, because we are absolutely in every neighbourhood and we're part of every community,’ she says.

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When launching the 10-year plan in early July, the Prime Minister, Sir Keir Starmer announced that pharmacists would be among those staffing new neighbourhood health centres alongside nurses, doctors and social care workers. The centres are set to ‘eventually’ be open 12 hours a day, six days a week within local communities. The government said such centres will bring ‘historically hospital-based services into the community’, including diagnostics, post-operative care and rehab, while also providing services such weight management, stop smoking, debt advice and employment support.

While the 10-year plan ‘builds on what’s already been invested in’, Ms Morrison says there’s questions for contractors on what to prioritise.

‘For example, the current contract has got quite a lot of services in it which are not fully maximised because they're limited by how much money there is in the pot. And we're very keen that we don't do tons of activity that doesn't get paid for, so that's quite limited,’ she says.

‘So do you prioritise maxing out those services to make sure you've really got the most of that investment, or do you keep thinking about new things?’

Ahead of upcoming negotiations, Ms Morrison reiterates ‘we will be really, really strict about [whether] there is sufficient money for new services’.

‘The number one priority is to stabilise. So, there’s quite a lot of choices and debate to be had about what you prioritise first and what is there money available for?’