Pharmacy secures "largest" funding uplift of whole NHS

The DDA will press the Government to increase dispensing fees for dispensing GPs, following a 30 per cent increase in pharmacy contract funding.

The deal for 2024/25 and 2025/26 sees community pharmacy receive the largest uplift in funding across the whole of the NHS. GPs in England recently secured a 7.2 per cent cash growth on the NHS GP contract funding envelope for 2025/26.

However, the DDA counters that the GP deal does not compensate dispensing GPs for the increased NI contributions associated with additional members of dispensary staff.

In the pharmacy deal, negotiator Community Pharmacy England (CPE) secured an increase in the margin allowance for community pharmacy of £100 million to £900m per year. This is usually delivered through Category M of the Drug Tariff, which also applies to dispensing practices.

CPE has also secured a write-off of historic margin overspend of £193m, as well as a commitment from DHSC to review margin distribution. Other features of the deal include a 15 per cent (19p) increase in core activity funding Single Activity Fee (SAF) to £1.46 per item, increased fees for the Pharmacy First and Contraception Services and the addition of new medicines to the New Medicine Service (antidepressants) and of emergency hormonal contraception (EHC) to the Contraception Service from October.

Informing the negotiations is NHS England's independent Economic Analysis of NHS Pharmaceutical Services, which has just been published. Key findings include that:

an increasing number of pharmacies are defaulting on direct debit payments for stock
between January 2021 and November 2024 there was a net reduction in the number of pharmacies in England of 7 per cent, mostly among the large pharmacy chains
the proportion of pharmacies trading as independents/smaller chains has increased
some 37 per cent of pharmacies would be deterred from closing because of the costs incurred in doing so (e.g. redundancy costs, lease commitments, loss of asset intended to support pension).

England Pharmacy Owners' News