No extra funding for pharmacy will lead to more pharmacies closing down, a financial expert in pharmacy has predicted.
Partner at accountancy firm Silver Levene Umesh Modi told The Pharmacist yesterday (23 October) that he expects more pharmacists to shut down their businesses following the 2018/19 pharmacy funding deal.
The Pharmaceutical Services Negotiating Committee (PSNC) announced on Monday (22 October) that pharmacy funding will be maintained at £2.692bn, with £800m allocated to the retained margin and £1.3bn to the single activity fee (SAF).
PSNC also revealed that the SAF will be set at £1.26 from November, a three pence drop compared to the current £1.29.
More pharmacies to close down
Mr Modi said it was expected that the funding would increase but we now ‘expect more pharmacies to close down’.
‘There are many community pharmacies struggling at the moment and their cashflow remains extremely tight. Pharmacists’ income is on the decline and this will only exacerbate the situation.
‘They are laying off staff, which obviously curtails investment in the business, and are stopping free collection and delivery services. This is detrimental to patients.’
In May, the DHSC revealed that the number of brick and mortar pharmacies had been decreasing, with a net closure of 134 pharmacies between November 2016 and April 2018.
A Department of Health and Social Care (DHSC) spokesperson told The Pharmacist: ‘We’re committed to maintaining access to NHS pharmaceutical services – that’s why we introduced the pharmacy access scheme (PAS) to support pharmacies where provision is most sparse.
‘There are 11,600 community pharmacies dispensing NHS prescriptions in England, 1,500 more than 10 years ago.’
Low-volume dispensing pharmacies at risk
Mr Modi argued that pharmacies dispensing less than to 4,000 to 5,000 items per month are ‘very vulnerable’ to closure. He also estimated that those dispensing 10,000 items per month will see their monthly profit ‘drop by £300’.
He said: ‘The SAF three-pence drop per item will be very costly for pharmacies [dispensing] a large number of items. This doesn’t help when all the other costs are going up at the same time.’
PSNC pointed out that it was ‘very reluctant’ to agree the funding offer, which came after ‘rigorous analysis and a difficult debate’ with the Government.
A PSNC spokesperson told The Pharmacist: ‘While being aware of the great difficulties faced by community pharmacy contractors, the committee also recognised the need to begin rebuilding constructive working relationships with the Government after a two-year hiatus.
‘In accepting the offer, PSNC expressed to the Government its deep concerns about the financial pressures facing contractors and the fact that they would increasingly be unable to reinvest, given pressures from rising staff costs and business rates.’
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