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Pharmacies won’t receive any extra money in 2018/19 funding settlement

By Léa Legraien

22 Oct 2018

There will be no more money available for pharmacies for 2018/19, the Pharmaceutical Services Negotiating Committee (PSNC) has announced today (22 October), with the funding settlement remaining the same as last year.

Pharmacy funding will be maintained at £2.692bn, with £800m allocated to the retained margin and £1.3bn to the single activity fee (SAF). The remaining £480m will be split in other fees and allowances including quality payments and advanced services.

Following lengthy negotiations with the Department of Health and Social Care (DHSC), PSNC also announced that the SAF will be set at £1.26 from November, a three pence drop compared to the current £1.29.


‘Most optimistic scenario’


PSNC accepted that pharmacists may be disappointed with the final funding deal but said that ‘pharmacy was not going to get a better offer from the Government’.

PSNC director of funding Mike Dent said: ‘We were expecting a further cut this year of £33m so I think flat funding was the most optimistic scenario the minister had to choose from.

‘It’s quite an awkward settlement. On the one hand, it’s quite good [but on the other hand] it will look quite challenging for contractors. We have to acknowledge that the minister could have cut funding and chose not to.

‘Our ambition is to try and get away from one-year settlements because we want to make it easier for contractors to be able to plan what they are doing in their business, particularly now when things are tough.’


Reduction in category M and SAF prices


According to Mr Dent, contractors will be faced with a ‘dip in their cashflow’ and be overpaid at the end of January, as the BSA will use October’s average values and pay contractors in advance against November scripts.

He also pointed out that category M prices will reduce by £10m a month from the November drug tariff prices until March 2019 to repay the ‘excess margin’ earned by pharmacies over the years. PSNC is still in the process of analysing the results of the 2017/18 margin survey, which were first expected to be published in August but later delayed due to fluctuations in prices over the past six months and the numerous price concessions.

‘As a result of the category M margin survey results for the last few years, we owe them [the Government] a chunk of money,’ Mr Dent said.

He added said that the Government was ‘really conscious of clustering and keen to get rid of fixed payments’. As a result, there will be a £10,000 reduction in the establishment payment – from £25,000 to £15,000 – and no more electronic prescription service (EPS) and repeat dispensing payments’.

PSNC said it has not started negotiation talks with the Government for the next pharmacy funding settlements, but had stressed its desire to start ‘as early as possible’.

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