NHS underfunds some medicines by 80%, the NPA warns

The NHS only reimburses 20% of the cost of some commonly dispensed drugs including antidepressants, pain relief and blood pressure medication, analysis by the National Pharmacy Association (NPA) has found.

This ‘chronic underfunding’ forces pharmacies to cover the remaining cost from their own pocket and leaves some patients vulnerable to medicine shortages, the NPA said.

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The analysis showed that pharmacies lost an average £5.8 million a month dispensing these six commonly prescribed drugs alone:

• Aspirin 75mg (£1.79 loss made by pharmacy per unit)
• Irbesartan 150mg (£4.41 loss made by pharmacy per unit)
• Tolterodine 2mg (£10.46 loss made by pharmacy per unit)
• Mometasone 0.1% cream (£8.34 loss made by pharmacy per unit)
• Lofepramine 70mg (£9.31 loss made by pharmacy per unit)
• Ivabradine 2.5mg tablets (£9.37 loss made by pharmacy per unit)

Analysis is based on Price Concessions published by Community Pharmacy England compared with prices from medicine wholesaler AAH on 7 January 2026.

Pharmacies in England buy prescription drugs from wholesalers and are paid via a central NHS contract, which is supposed to reimburse them for the cost through a drugs tariff set in Whitehall. Similar arrangements govern the supply of medicines in Wales and Northern Ireland.

However, fluctuating wholesale prices, government funding cuts and varying prescribing by doctors mean that NHS funding often falls short of the prices that pharmacies pay for medicines.

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The NPA has called on the government to reform the ‘fundamentally broken’ pharmacy contract to avoid more pharmacy closures.

Chief executive of the NPA, Henry Gregg, said: ‘It is a scandal that all too often pharmacies are subsidising the cost of the nation’s medicines. It pushes pharmacies to the edge of closure and exacerbates chronic problems with medicine supply.

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‘The government must stop funding pharmacies below the cost price of medicines – no other part of the NHS would tolerate this. Just like GPs and dentists, pharmacies are a vital part of the NHS but are forced to deal with an outdated and broken contract in desperate need of reform.’

He expressed his desire to work with the government on implementing reform and delivering care closer to millions of people, but warned that if the situation continued, there was a risk of more pharmacies being ‘forced out of the NHS’ or having to close altogether.