With funding cuts hanging over their heads, Allie Anderson explores how pharmacy owners will stay in the black.

The Government is expected to announce its hotly anticipated funding package for community pharmacy in England any day now, with the changes due to take effect from December. 

PSNC called again last week for the Government to propose a revised package, or impose their proposed funding changes and end the state of flux that’s been haunting the sector since the first announcement last December.

The negotiator publically released its letter to the Department of Health where it rejected the offer of a 12% funding cut from December 2016 to March 2017.

This would bring the global sum down to £2.684 billion for 2016/17, only marginally above the £2.63 billion budget proposed by the Government in its original funding announcement.

But calls for clarity continue to be met with silence. In September there was a temporary reprieve, when pharmacy minister David Mowat announced the cuts would be delayed beyond the initial target implementation date of October. But just a few days later the DH revealed the new timescale for negotiations and implementation, once again plunging the sector into disarray. 

The result is what Graham Phillips, director and superintendent pharmacist at Manor Pharmacy Group in Hertfordshire, describes as a “dystopia [in which] there is a complete disconnect between rhetoric and deed”. The rhetoric is that pharmacy can bring immense value to primary care, both in financial and real terms – but is likely to be negated by the reality of massive disinvestment. As the industry prepares to have the final nail hammered into its budgetary coffin and considers the implications of a 12% slash in income, the question remains: how can pharmacy survive?

According to Robbie Turner, CEO of Community Pharmacy West Yorkshire, pharmacists should plan for the worst-case scenario. “If people do scenario planning around the 6% figure – perhaps more – it will help them plan their cash flow over the next six months, which is what all businesses should be doing anyway,” he says.

Like many, Turner suggests that survival strategies should centre on diversifying what the pharmacy can offer, through more advanced health care services. An example is the national flu vaccination programme, but opportunities to plug service gaps and derive additional income also exist on a local level. “We should perhaps look at going into things like skincare, as many CCGs are now starting to restrict treatments for conditions like dry skin,” Turner adds. 

Front-line care

The idea of pharmacy as a front-line provider of services isn’t new: a lot of work has been done not only to demonstrate the value of this care model, but also to show that community pharmacy can deliver benefits that far outweigh the resources it has to work with. The PricewaterhouseCoopers (PwC) study published in September revealed that in 2015, community pharmacy contributed a net value of £3 billion to the NHS, the public sector, patients and society in general, through just 12 services. This offsets the total sum of public funding that community pharmacy received last year, with change left over.

In addition, the Community Pharmacy Forward View, created by the National Pharmacy Association, Pharmacy Voice and the RPS, presented a robust case for how the sector can contribute to the NHS. Many pharmacies are already doing much of this work, and have been for some time. 

But Karen Samuel-Smith, contractor development manager at Essex LPC, says LPCs themselves have a role to play, acting as a “critical friend” to get buy-in from pharmacies that are dragging their feet. “It’s a case of making sure that if there’s a service available, they can provide it. If there are barriers we must work through them with the pharmacy where possible,” she comments. “As well as that, we have to make sure the ones that are signed up to services are actually delivering them because historically, pharmacies have been great at signing up for things and patchy at delivering.” 

Gains can also be made across the retail business. At Savages Pharmacy in Burnham on Crouch, Essex, customers can access an on-site post office and digital photo lab, and buy stationery while they wait for their prescription. “Having a balanced business is key [because] there is too much reliance on NHS contracts,” explains owner Ani Patel. “We’re in a small town in the middle of nowhere, where there is a much larger community spirit and an emphasis on providing a good service all round.”

Patel admits that while this model can be successful in large, rural communities, it could be harder to replicate for big city contractors. “However, thinking outside the box is key to any business, whatever you have to offer.”

When the axe eventually falls, the immediate reaction will be to scale back on the front line. But maximising retail income requires a degree of investment in staff, says Turner.

“Community pharmacies should take time to discuss how to sell to customers and make sure the team can confidently recommend products to patients, because that will increase patient loyalty and encourage them to come back in the future.” He suggests that upskilled staff are more productive staff, and conversely, reducing training and investment is not cost effective in the long term, because the workforce becomes demotivated and less productive.  

As well as investing in training, says Samuel-Smith, it’s important that community pharmacies examine how to derive the most value from every member of the team. “For example, we’ve seen a huge number [of pharmacies] increasing use of their checking technicians – ones who were risk averse and wary of doing it before – who are now beginning to see that it represents good value for them.” 

Pharmacies must also recognise that they can minimise the costs of setting up and running additional services by placing them in the remit of a healthcare assistant rather than a technician. 

At Manor Pharmacy Group, Phillips says he is having to reduce any cost he can. “We’re even having to think about whether we’re going to replace light bulbs or heat the pharmacies.” Morale is at an all-time low and pharmacists’ health is at risk. “Community pharmacy owners are on the verge of a nervous breakdown: the profession is being worked into the ground, and this will result in all sorts of issues including mental health problems. That is the environment the NHS is creating.” 

This bodes ill for the future of local health provision, threatening the significant value community pharmacy can deliver. “We’ve tried to provide a British Airways service but we’ll endup with Ryanair,” Philips warns. 

While some argue there is still work to do to make the public more aware of what community pharmacy can do, others on the ground believe it’s not public attitudes that need to be addressed. “Right at the top of the NHS, there’s an anti-community pharmacy prejudice – and that’s where the problem is,” suggests Phillips. Pharmacy should therefore take every opportunity to engage with policy makers locally to challenge this from the bottom up and communicate the positive messages. “In our area, as part of the work the LPC is doing with MPs to highlight the value of pharmacy, we’ve invited them to visit their local pharmacy and have their annual flu jab,” he continues, “and seven MPs have agreed to do that.” 

Also key is collaborative working with other health service stakeholders, which can yield greater recognition of pharmacy’s integral role in primary care and improve patient outcomes. In Essex, the LPC is taking this approach to gain wins in the flu vaccination service, where historically, there has been pushback from GPs. The group has “proactively approached our local medical committee to look at tackling this constructively together”, says Samuel-Smith.

In addition, Essex LPC is working with NHS 111 and its directory of local services on referral pathways, to boost engagement with pharmacy and demonstrate that “a referral to pharmacy is not a cop-out or an end point”.  “I think that’s where the work needs to be done,” Samuel-Smith adds. “It’s one thing doing lots of public campaigns but I don’t think the system has properly got GP practices to promote the role of pharmacy and it certainly hasn’t got acute and urgent out-of-hours services to promote pharmacy properly.”


As community pharmacy faces a critical turning point, many are hoping PSNC will continue to fight its corner. In its letter to the DH’s head of pharmacy Jeanette Howe, PSNC chief executive Sue Sharpe accuses the Government of making it “impossible” to work collaboratively with them.

“It’s been clear that decisions have already been settled and on the principle issues there was no real consultation”, she writes.

She adds: “The proposals were and remain, founded on ignorance of the value of pharmacies to local communities, to the NHS, and to social care, and will do great damage to all three. We cannot accept them.”    

However, Patel’s advice is to get beyond the sense of frustration and remain positive, whatever the package brings. “We can tackle massive strategic health inequality, and we can help improve the wellness of the communities we serve. And we are prepared to roll our sleeves up and do what needs to be done.”

What is the Government planning for community pharmacy?

The current £2.8 billion funding in the 2015/16 contract to be reduced to £2.84 billion for 2016/17
Funding for 2017/18 to include 7.4% cut on current levels, setting funding at £2.592 billion
Reducing the number of pharmacies that are within a 10-minute walk of each other
More clinical pharmacists working in GP practices and more dealing with care homes and urgent care
More large-scale automated dispensing. Changing regulations so all pharmacies can have the ‘hub and spoke’ model
A Pharmacy Access Scheme, which would provide more NHS funds to certain pharmacies than others, depending on location and the health needs of the local population
Patients to have more choice of how they can access their medicines and advice online, including more ‘click and collect’ services for prescriptions
Encouraging the ‘optimisation of prescription duration’ to reduce medicines waste