House of Commons Library

Community pharmacy funding

Published Thursday, January 19, 2017

This briefing paper outlines the new funding settlement for NHS contractors providing services under the community pharmacy contractual framework, announced on 20 October 2016. Compared to 2015/16 levels, the funding settlement includes a reduction of 4% in 2016/17 and a further 3.4% in 2017/18.

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NHS England is responsible for commissioning NHS primary care services in England, including community pharmacy services. Clinical commissioning groups (CCGs) are free to commission further services from community pharmacies over and above those commissioned by NHS England, and local authorities are also able to commission public health services from pharmacies. The majority of NHS income for community pharmacies in England comes from payment from NHS England, through the NHS pharmaceutical services contract. The NHS England funding settlement for 2015/16 was £2.8 billion.

On 20 October 2016 the Government announced that funding for NHS contractors providing services under the community pharmacy contractual framework will be:

  • £2.687 billion in 2016/17
  • £2.592 billion in 2017/18

This represents a 4% reduction in funding in 2016/17 and a further 3.4% reduction in 2017/18.

The announcement also confirmed plans for changes to the way funding is distributed: 

  • Establishment payments will be phased out, and a range of dispensing fees will be amalgamated into a single activity fee.
  • A Pharmacy Access Scheme to support services in isolated areas. The Government has published a list of 1,341 pharmacies that will receive access payments.
  • A £75 million Quality Payment Scheme will award pharmacies extra funding based on how well they perform against criteria set out by the Government. The criteria are set out on p.11 of the Community pharmacy in 2016/16 and beyond: Final Package published by the Department for Health.
  • A Pharmacy Integration Fund to support closer working with other parts of the NHS. The fund will provide £42 million in addition to the 2016-2018 funding set out above.

The changes take effect from 1 December 2016. The Government has argued that the cuts are necessary as part of wider efficiency savings being made across the NHS. Health Minister David Mowat has stated that the new funding package will lead to better value for money in pharmaceutical services, while ensuring that everybody retains ready access to a community pharmacy. Industry groups and the Opposition have been critical of the cuts, arguing that the cuts will lead to closures of community pharmacies, and that the Pharmacy Access Scheme will not protect pharmacies in the most deprived communities.

The downloadable data file below includes a list of pharmacies in each English parliamentary constituency, along with a summary of which are expected to be eligible for the pharmacy access scheme.

For MPs and their staff, Library researchers can provide maps of pharmacies by local area like the one featured below. Please get in touch to find out more.

PhAS map

 

Commons Briefing papers CBP-7811

Authors: Antonia Jones; Carl Baker

Topics: Health finance, Health services, Health staff and professions

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