English community pharmacy funding deal announced

Arrangements for the Community Pharmacy Contractual Framework (CPCF) in 2021/22 have been agreed between the Pharmaceutical Negotiating Committee (PSNC), NHS England and NHS Improvement (NHSE&I) and the Department of Health and Social Care (DHSC), in line with the five-year CPCF deal.

In a letter to contractors from PSNC, DHSC and NHSE&I the changes for year three of the five-year deal have been communicated.

In negotiations on the Pharmacy Quality Scheme (PQS) announced earlier this month, a ‘key win’ for the PSNC was reducing the scheme’s scope so that the estimated contractor costs of delivering the criteria will be well below those associated with the original NHS proposal for the scheme.

PSNC managed to secure the following:

  • Agreed more realistic targets for contractors across the scheme and in new services.
  • Pushed back on service proposals that were unworkable for the sector.
  • Gained additional incentive funding from outside the £2.592bn for Hypertension Case-Finding.
  • Extended the Transitional Payments by a further year.
  • Won concessions around regulations, both to make changes more manageable for contractors and to gain agreement to explore changes that the sector will benefit from.

PSNC has however said that a ‘key disappointment’ was HM Treasury’s flat rejection of their bid for a funding uplift for the sector; this is something that PSNC will continue to pursue.

Overall the announcement has been received poorly by the sector with many criticising the deal especially in light of recent unprecedented events.

Simon Dukes, PSNC Chief Executive, said: 

“After a year like no other, contractors should feel aggrieved that HM Treasury flatly rejected any possibility of an increase in the contract sum for this year. Throughout the Covid-19 pandemic community pharmacy has performed magnificently – for patients, the NHS and the country. Not to have that reflected in anything other than warm words is frustrating and supremely disappointing.

“HM Government’s insistence that we remain at £2.592bn for a further year will bring financial tensions as we move through the autumn and the Covid-19 Advance repayments start to bite. The failure of our interlocutors to accept the financial, workforce, capacity and wider costs challenges faced by every part of our sector is unfathomable. We continue to press for recognition of the financial pressures that community pharmacy is under and, as the pandemic slowly recedes, underline to Government how much worse things could be right now, were it not for the performance of our sector.

“That said, there are some clear positives and hard-won concessions and wins for the sector in this Year Three deal:

“Protection of the Transitional Payment (which had been due to end in March 2021) is critical – we know contractors need this money now more than ever, and that much of it has been spent simply on keeping going rather than on achieving efficiencies made impossible by slow progress on regulatory changes and by Covid-19.

“A Quality Scheme that contractors can actually deliver is also vital – the first drafts of the scheme would not have been doable for many pharmacies.

“We have taken big steps forward on services – after much to-ing and fro-ing with the NHS on service fees and how services should be funded, we have got to a good place with a range of new services launching this year, including some with monies from outside core funding.

“We have also said no on key things: no to regulatory changes that would put too much pressure on contractors; no to services that would not work for the sector; and of course, no to agreeing Year Three without a resolution on Covid-19 costs.

“I will talk more about some of the challenges we have faced, and the differences between how we view ourselves and what Government and the NHS think of us, in my upcoming blogs (sign up to receive these at: psnc.org.uk/email). Compared with the original DHSC/NHSE&I Mandate we received back in May, this is a good deal. It comes alongside separate funding for Covid-19 costs as well as pandemic testing and vaccination services, and all of this is why, of course, the Committee agreed it by an overwhelming majority.

“There is more to do. Now that contractors have claimed their Covid-19 costs, we will be discussing cashflow and the recovery of the £370m Advance Payments with the DHSC. We are also hard at work now on an Annual Review process examining community pharmacy (and NHSE&I’s) performance during Years One and Two of the five-year CPCF deal. Contractors will remember that the Review process was key to PSNC’s agreement of the five-year deal, giving us a chance to show what pharmacy has achieved and to monitor costs and capacity: our findings will be critical to set the tone for discussions on Year Four, which we hope will take place through the autumn.

“Contractors can be assured that, where we need to, we will say no in those negotiations as well.”

Jas Heer, independent contractor and PSNC Negotiating Team Member said:

“As a newly-elected independent contractor member of PSNC’s Negotiating Team, the Year Three negotiations made for a whirlwind first few months in post. Since receiving the mandate from Government and the NHS, we have covered an extraordinary amount of ground, and this was only possible thanks to the commitment of Negotiating Team Members and all others at PSNC.

“My worry all the way through these negotiations has been the impact on contractors – for many cashflow is already tight, and the repayment of Covid-19 loans throughout the autumn coming alongside the work to be done in setting up new services is going to be a real challenge. We will continue to monitor this and to make our case for further financial support through the upcoming Annual Review process and Year Four negotiations.

“The outright rejection of our bid for a funding uplift presents issues for us all. But while the views of NHSE&I and Treasury about our sector were disheartening – and working to change this is a continued strategic focus for PSNC – it has been encouraging to see how much compromise we have been able to get to on some critical topics. The initial scope for the Pharmacy Quality Scheme would have made hearts sink, but we have got to a good place balancing contractor workload with the need to demonstrate the high quality we offer. The new Advanced Services are now more fairly rewarded and they present an exciting opportunity for the sector, giving contractors the chance to boost their income while better serving patients and supporting the NHS. And the agreement of Government to continue the Transitional Payments – recognising the impact that COVID has had on our ability to find efficiencies – is an important success, protecting much-needed funding for us all.”

Clare Kerr, Head of Healthcare Policy and Strategy at McKesson UK and PSNC Negotiating Team Member, said: 

“When we first received the mandate for negotiating the arrangements for Year Three, this was billed as a year of ‘recovery and renewed progress’. I hope it will be both, but I fear that for most pharmacy businesses, regardless of their size, it will not feel much like recovering. The pressures on our finances and teams continue, not helped by the current levels of Covid-19 in the community, and this needs to be addressed via the Annual Review process that we are now working through. We will also keep lobbying for the funding uplift that pharmacies so urgently need.

“But this will also be a year of exciting progress for pharmacies, at least as far as services go. The long-awaited extension of the New Medicine Service (NMS), with further pilots to follow, brings this valuable service to a whole new cohort of patients. The agreement for us to give catch-up support to those who have missed out on the NMS over the past year should also be taken as a huge vote of confidence. And the new Hypertension Case-Finding and Smoking Cessation Advanced Services finally start to bring to life the vision for pharmacy services that we have been advocating for many years. There is much to be positive about on the service development front, and I’m looking forward to watching the sector prove itself in these new areas.”

Pharmacy contractors have also reacted on social media. For example, Mike Hewitson said the following:

You can read the full details of the deal on the Government website here and you can read more about the PSNC reaction here.

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