The pharmacy contract is broken – what do we do now?

If there was ever a time to argue that the five-year contract offered pre-Covid and pre-economic crisis was now redundant, surely, it’s now, says contractor Ashley Cohen.

The recent ‘Groundhog Day’ announcement by PSNC on the outcomes of recent negotiations with DHSC is yet again another nail in the coffin for the community pharmacy sector.

We’ve had similar messages, from various PSNC CEOs, every year for the past seven to eight years. ‘We negotiated as hard as we could, but there is no new money,’ PSNC said.

There is no comfort in an imposed offer or the fact that if it was not accepted any marginal benefits would have been removed. And we have to go back to 2014 for when we last received any increase in funding.

Accepting a five-year 0% contract (on the back of two years of significant cuts) was always going to be difficult to trade through, but at least ‘at the time it was negotiated’ it gave the sector some longer term stability in a multi-year deal. And with it came the promise of a shift to clinical services and improved efficiencies.

Before the ink was dry on our new five-year 0% contract, we would enter a global pandemic

But before the ink was dry on our new five-year 0% contract, we would enter a global pandemic – and we are still feeling the effects nearly three years on. Covid has not gone away: we are just learning to live with it. That’s learning to live with the staff burn out, the significant staff absences, and the recruitment and retention issues as staff look for a more ‘balanced’ work-life balance.

The message from the Chancellor at the start of the pandemic was clear: but ‘meeting all Covid costs’ and ‘whatever it takes’ seems a far distant cry today.

Now, just as we are getting used to the ‘new normal’, a bigger threat to our livelihoods is looming with respect to the economic catastrophe that is beginning to engulf us all:

• Massive inflationary pressures, affecting both work and home life.
• Pressure from our hard working and loyal staff to receive recognition and pay increases.
• National Living Wage has increased over 45% since our significant sector cut in income in 2015.
• Utility costs are (literally) off the scale.
• and now, significant increases in borrowing costs (interest rates) will hit businesses hard on top of all other pressures.

If there was ever a time to argue that the five-year contract offered pre-Covid and economic crisis was now redundant, surely, it’s now

If there was ever a time to argue that the five-year contract offered pre-Covid and economic crisis was now redundant and not reflective of today’s activities, surely, it’s now. Witnessing all the other sectors receiving some inflationary increases over the past few months gave me hope (false hope) that at last in years 4 and 5 we would receive some new money.

I for one, was astonished that given the above circumstances that not a single additional penny was invested into a sector to help it through these troubled waters. If Government can’t find any extra cash to support us now after the last three years, it never will.

Now £150bn has quickly been made available to support homes and businesses with energy costs within a matter of days, yet it’s taken nearly seven months of ‘hard’ negotiation by PSNC to only provide ‘£100m excess margin write off’ - the practicalities of which we are yet to see, and I am sure that this will be lost again in wholesale price differentials which ensure that no contractor receives the right amount due back.

The move to clinical services hasn’t happened

The move to clinical services hasn’t happened. A shift from volume-based prescription work to clinical service was promised at the start of the five year contract, but it has hardly been a seismic shift.

We have had money top-sliced, only to be re-packaged as new exciting clinical services. However, these services are now being controlled by other organisations and professionals. So, accessing the Discharge Medicines Service and the GP Community Pharmacist Consultation Service is hardly a radical change to our sector. We can’t drive the change within our pharmacies, and instead, it is being drip fed to us.

The contract is broken, and the way we are re-imbursed for medicines is broken, and yet no one in government (Treasury or DHSC) is prepared to fix it.

Concession prices are at an all-time high, and contractors do not see any transparency around the concession prices and how they are agreed (sorry ‘imposed’ by DHSC), and many are dispensing dozens of medicines at significant loses.

What else can be done?

Cost base contraction

We are unable to change our prices, as most of our income comes direct from the government, but we can change our cost base. Most pharmacies are now working with a skeleton staff and are having to do more for less to simply tread water. I am witnessing pharmacies now stopping services, looking at their opening times, and charging for delivery services (well overdue, and I hope that all contractors now look to charge for these non-funded services). But this will all have an impact on healthcare in communities where other local health services are already stretched.

New services

A walk-in CPCS is so badly needed - and has been talked about by ministers going back almost 10 years - though it feels that this is still light-years away from being implemented. In a few years’ time we will have a large volume of pharmacist prescribers being trained now that we must ensure that their skills are full utilised.

New services are welcome, but the scale needs to be significant to help embed change. One or two GP CPCS referrals each month will hardly fund the second pharmacist required to take on board a significant volume of clinical services.

Independent economic review

The latest negotiations mention that a new independent economic review will be undertaken during the remaining 18 months on the current contract. This is welcome, but there have been many of these previously, including the Cost of Service Inquiry from 2010/2011, which was never implemented. Many well-respected analyses include a report published by EY in September 2020, which warned about future pharmacy closures due to chronic underfunding.

There is hardly a lack of information out there about the current financial situation for pharmacies, our current capacity, or our ability to help and improve the current backlogs. Will another review tell us anything we don’t already know?

Pharmacy teams can do so much more, we are part of the solution and not part of the problem

Professional unity

It is high time that we unite as a sector, with all the leading professional organisations coming together to protect our future, and share one loud voice to the communities we serve and the paymasters who hold the purse strings. Enough is enough.

Pharmacy teams can do so much more, we are part of the solution and not part of the problem. Invest in our sector and we will help improve inequalities, improve public health, reduce unnecessary appointments with others in primary care, and reduce unnecessary A&E visits. A lack of investment in community pharmacy will only add to these problems!