Establishment payments for pharmacies in England will be reduced by 20% from December under the Department of Health’s new funding package.

Pharmacies which currently receive the highest payment of £2,092 a month will see it drop to £1,673.

From next April the payments will fall by a further 40% on current levels when the highest pay will be £1,255 a month.

Pharmacies currently receive £220,000 a year from the NHS including a £25,000 establishment payment which is given to all community pharmacies that dispense more than 2,500 items a month.

Establishment payments currently account for between 80-90% of pharmacy income.

However, following the decrease this funding will be “phased out” completely over “a number of years,” the Government has said.

Instead a performance-based system called the Quality Payment Scheme, worth £75m will replace it.

In their Impact Assessment the DH stated: “There is no reliable way of estimating the number of pharmacies that may close as a result of this policy.”

The cut comes in addition to the new funding package announced by the Government yesterday which will see a reduction from £2.8bn a year to £2.687bn for 2016/17 and £2.592bn for 2017/18.

NHS England also announced that the funding for the pharmacy integration fund will be £42m for 2016-2018.

This will support pharmacy to “develop new clinical pharmacy services, working practices and online support to meet the public’s expectations for a modern NHS,” said chief pharmaceutical officer, Dr Keith Ridge.

By Alice Harrold