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Covid costs cap removed in PSNC deal with Government

By Isabel Shaw and Allie Anderson

28 Jun 2021

Pharmacies will be able to claim 13 months’ worth of uncapped Covid-related costs from next month after the Pharmaceutical Services Negotiating Committee reached a deal with the Government.

The long-awaited agreement, announced this afternoon (28 June), will mean that contractors in England can claim Covid costs for March 2020 to March 2021 in a deal PSNC chief executive Simon Dukes called ‘the best one we could get’.

A previous offer put forward by ministers was rejected. Under the new, improved deal:

  • The Government has removed the £120 million upper limit on the amount of claims it will pay for.
  • Contractors can now claim Covid-related costs incurred from March 2020 to March 2021, rather than the originally proposed period of three months.
  • Claims can include a greater range of costs that had been previously excluded, such as non-staff costs.
  • Costs will not be written off against retail grants.
  • Multiple contractors can now make a single claim per business, where previously the Government wanted to impose a separate claim per branch, which would have limited the amount of some claims.

The Government has not placed a cap on payment claims, but the Treasury may ‘review’ the total amount of claims made if it exceeds the £370m awarded last year in Advance Payments.

‘In practice we do not expect any limit to be put on contractors’ claims provided these all meet the requirements of the Drug Tariff and can be robustly evidenced,’ the PSNC states in a series of FAQs published alongside the deal announcement.

Claims can be made between 5 July and 15 August and will be paid on 1 October.

The DHSC plans to begin recouping the £370m from October, seeking repayments in six equal monthly sums.

Simon Dukes, PSNC chief executive, said: ‘After many months of frustration and uncertainty, I hope it will be a relief to community pharmacy contractors to hear today that we have reached a deal on Covid-19 costs for the sector.

‘We have a constructive way forward, and a chance for contractors of all shapes and sizes to claim for the full range of pandemic-related costs that they incurred last year.

‘The deal is not quite what PSNC had asked for: we wanted contractors’ Covid loans simply to be written off against the costs they have incurred during the pandemic. But this was rejected outright and this deal is the best one we could get, giving every contractor a fair chance at having their costs covered.’

Thorrun Govind, chair of the English Royal Pharmaceutical Society (RPS), welcomed the deal, however, also said it was not ‘ideal’ and called for more sustainable long-term funding 

‘PSNC made a strong case for reimbursement alongside MPs, APPG and national pharmacy organisations, and whilst this is not the ideal arrangement, it’s much improved. Funding not only impacts the mental health of pharmacy teams but also patient safety.

‘It has been a really uncertain time for many and the delay on this decision has caused enormous stress as many contractors feared having to repay the money would put their livelihoods at risk.’

She added: ‘Pharmacy teams have worked extraordinarily hard during the pandemic and, as well as the short term relief the emergency funding provided, we want to see a more sustainable long term funding solution for community pharmacy to enable the sector to continue to provide essential health services for patients.’

Malcolm Harrison, chief executive of the CCA, also welcomed the announcement: ‘Pharmacies can now reclaim far more of their Covid costs than had previously been offered.

‘We also welcome the fact that businesses can now make collective claims, rather than having to make one claim per pharmacy. We are pleased that the data supplied by CCA members, and our support of the PSNC negotiations, has helped to achieve this outcome,’ he said.

Mark Lyonette, the chief executive of the National Pharmacy Association (NPA) said: ‘It’s good that the government has finally listened to our repeated appeals for a decision about how Covid costs will be repaid to pharmacies in England.  We look forward to examining the fine print of these arrangements.

However, he also added: ‘It shouldn’t have taken battle buses, petitions, newspaper campaigns and public protests by NPA members to get us to this point.

‘We have persistently pressed the government in private and held them to account in public on this matter.

‘We’re pleased that the issue of Covid costs is at last being addressed, but attention must also be given to fixing the pharmacy contract in England, which remains seriously underfunded.’

He also said: ‘We also acknowledge the many MPs who have backed us in parliament, including the All-Party Pharmacy Group.

‘This is no more than our members deserve – after all pharmacies bore Covid costs in good faith that they would be repaid, in the service of the nation.

‘It’s now really important that contractors claim all that is due to them within the July 5 – August 15 window.  The NPA will provide support and guidance to our members, most of whom do not have a big back-office to carry out the task of accounting for costs,’ he said.

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