Pharmacy sector should unite to seek 'urgent' contract reform, IPA says

The pharmacy sector should unite in seeking urgent reform of the community pharmacy contract which is was leaving pharmacies in an 'untenable’ position', a sector leader has said.

The Independent Pharmacies Association (IPA) said it was seeking legal advice on the requirement by the NHS for pharmacies to supply medicines at a loss.

It warned that ongoing market volatility, rising acquisition costs, and delays in reimbursement were putting community pharmacies in an ‘untenable’ position of dispensing drugs at a financial loss.

The association said that pharmacies cannot pass the costs on to patients but if they make the ‘difficult decision’ not to supply a medicine because it would leave them out of pocket they risk being deemed in breach of their NHS contractual obligations.

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The IPA said: ‘This situation is fundamentally unjust and economically unsustainable.

‘No business should be contractually obligated to provide services at a guaranteed loss, particularly when doing so places its financial viability - and ultimately patient access to care - at risk.’

It is calling on the sector to:

• Unite in seeking urgent reform of the NHS pharmacy contract to 'reflect current economic realities'; and
• Advocate for a fair and responsive reimbursement system that ensures pharmacies are not forced to dispense at a loss.

The IPA also said it would be seeking support from other representative bodies to commission legal advice clarifying the rights of pharmacy contractors, and challenge contractual expectations that compel pharmacies to jeopardise their financial stability.

IPA chief executive Dr Leyla Hannbeck said: ‘It is completely unacceptable that pharmacies are being forced to supply medicines at a loss.

‘Pharmacies are already under immense pressure, and we saw over 650 closures across England and Wales last year alone. With rising costs from increased National Insurance contributions, a higher minimum wage, and the impact of business rates, many more are now at real risk of shutting their doors.

‘If this situation continues, it will not just be pharmacies that suffer, it will be patients who lose access to vital medicines and care.

‘The system must be fixed before more damage is done and that's why the IPA is investigating all avenues to stop this ludicrous situation of pharmacies having to dispense at a loss.’

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Her comments come after a survey by the IPA showed that the majority of pharmacies (96.7%) in England felt ‘decisive action’ would be necessary to avert service cuts or closures.

Almost a third (32%) of the 3,500 pharmacies surveyed said they would consider closing their pharmacy altogether, and more than half (56%) said they may have no choice but to consider limiting services, reducing deliveries, decreasing medicines compliance support, and cutting opening hours.

The IPA stressed that these cuts are no longer a ‘theoretical risk’ and that without urgent reform, patients could face reduced access to medicines and services while the pressure mounts on other parts of the NHS.

Dr Hannbeck said: ‘These figures should serve as a wake-up call to the government. The strength of feeling from pharmacy owners in England could not be clearer.

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‘Community pharmacies do not want to reduce services or close their doors. However, they cannot continue to absorb rising costs while operating under a broken funding model.

‘The government must act urgently to resolve the current negotiations, fix the reimbursement system, and provide meaningful support, including business rates relief. Time is running out.’

This month pharmacies also face additional costs from rising business rates, increases in employer National Insurance contributions, and a higher National Minimum Wage, amid ongoing medicine shortages.