The Pharmaceutical Services Negotiating Committee (PSNC) has called on the government to provide urgent financial support to community pharmacies to help with rising utility bills.

The PSNC said that many community pharmacy contractors already find themselves in a ‘desperate financial situation’ and expressed extreme concern that rising energy bills, which would not be covered by the household price cap, would only make this worse.

PSNC chief executive Janet Morrison described the financial outlook for many community pharmacies as ‘dire’, saying that 80% of contractors reported significantly increased operating costs at the start of 2022. ‘Spiralling utility bills and other cost pressures are only exacerbating the situation,’ she said.

‘Inflationary pressures and rising costs are a key part of PSNC’s case to Government about the urgent need for extra funding for community pharmacies. We have been clear that Government must protect these vital healthcare providers from economic pressures that are outside of their control to maintain public access to pharmaceutical care.

‘Rest assured, we will continue to urge Government and the NHS to urgently address the desperate situation that the sector now finds itself in,’ Ms Morrison added.

The PSNC said that it has been presenting the Department of Health and Social Care (DHSC) and NHS England with ‘a compelling of evidence to make our case for a significant funding uplift for the sector’. However, in August it revealed that approval for funding was delayed by the government reshuffle following the resignation of Prime Minister Boris Johnson.

Mimi Lau, managing director at independent pharmacy group Pickfords Pharmacy, said that the flat funding five-year funding deal for pharmacies was not enough to cover rising inflation.

Speaking to The Pharmacist, she said: ‘There’s no extra money coming, as far as I know, from the DH to support the rising cost of running pharmacies and actually, it's not flat funding really, it's actually negative. So, it's going to be really hard.’

Pickfords Pharmacy runs 21 pharmacies across the Leicestershire, Northamptonshire and South Yorkshire area and employs over 300 staff. ‘We're expecting an increase in energy bills […] and then you've got people talking about the minimum wage going up, potentially. There's huge pressures on living costs for people. There's going to be pressure on us as businesses to try and cover these extra costs, without any more funding,’ said Ms Lau.

‘Our business is 95% reliant on NHS income, so it's not like we can pass the cost over to the customer,’ she added. ‘We've got to absorb that, and we can't carry on absorbing these extra costs with no uplift in funding. We’re anticipating a hard time to come.’

For other pharmacies, the cost of utility bills paled in comparison to other pressures. Dimple Bhatia, of Tollesbury Pharmacy, told The Pharmacist that while energy consumption at his pharmacy is low, he worried about other costs and pressures on his pharmacy business.

‘I am more concerned about the rising fuel prices that impinge on our free delivery service, the decision that multiples have made to stop MDS although making “reasonable” adjustments for patients following a consultation with them is contractually obligatory, the unaffordable locum costs and the diminishing margins in pharmacy with reducing reward for pharmacy contractors,’ he said.

‘I think energy costs is the last of my worries at the moment.’

At Pickfords, Ms Lau said that her pharmacies aimed to increase efficiency by using a hub and spoke model within the group, maximising time spent delivering patient services, as well as trying to save energy where possible.

She also said that it was frustrating to see funding for services such as Covid vaccinations being reduced from last year. ‘We feel like that everywhere you turn is you just get this response of “there is no more money, or funding for the contract” – and we’ve got another two years of it.’

In addition, she said that rising costs would stifle innovation and investment. ‘You want to invest in business to grow, but we're curtailing any investment for the time being, not knowing what the full impact will be in terms of these operational cost increases.’

Ms Lau said that the sector was in need of more funding. ‘We are still looking to PSNC and the DH to recognise how difficult it is to make businesses continue to be viable and still deliver that level of patient care,’ she said.

‘I wouldn't be surprised if perhaps more pharmacies might look to consider whether they are viable to carry on. It’s really tough and certainly we are feeling the effect, and I think it's going to get worse in the coming months.’