This is bad news for a sector that is already waiting to hear about a funding cut of £170million.
Further to this it would seem that the government's is not listening via its consultations to the profession and are unlikely to take on board any of the suggestions made.
The NPA are proceeding with the public campaign which is getting patients and pharmacy users on board and one can only hope that this will apply the needed pressure to the government.
Please see the statements below from PSNC.
The letter states that funding for the community pharmacy service in 2016/17 will be reduced by £170m from the agreed sum in 2015/16, to £2.63bn, and it sets out a number of other wide-ranging policy ideas.
PSNC has been working, both with the other national pharmacy organisations and in discussions with DH and NHS England, to convince policy makers of the need to make better use of community pharmacy. This work included putting a counter proposal to the NHS, setting out how community pharmacy could be used to make the £170m savings while also improving care for patients.
The full PSNC Committee met in Durham this week to review the outcome of our discussions and agree next steps. Peter Cattee, Chair of PSNC's Funding and Contract Subcommittee and CEO of PCT Healthcare, has made the following statement to contractors:
"In our meetings with the Department of Health and NHS England it has become clear that they have little interest in commissioning additional national community pharmacy services or in our constructive proposals to make better use of community pharmacy to help the NHS to make savings. The Government appear unshaken in their determination to remove a sum of £170m from community pharmacy funding this year, and to do so via reductions in fees and allowances. As a committee of contractors PSNC is extremely concerned about this and we continue to work with the other pharmacy organisations seeking to persuade policy makers of the value of community pharmacy and the dangers in implementing a funding reduction of this nature.
In addition to this we realise there was a major over delivery of margin in 2015/16, and the Drug Tariff changes also announced this week begin a programme by the Department of Health to recover that margin from community pharmacy [see below].
Combined with the determination to remove £170m from community pharmacy in October, this financial year will be very difficult for the sector. We strongly advise all contractors to make whatever provisions they can for the funding reductions. Earnings from the first half of this financial year will be adversely affected by the Category M price reductions, but will still be significantly above those expected for the second half.
PSNC met this week and we are very pessimistic about the outcome of the consultation on community pharmacy's future. We are also very concerned that the NHS and Government have not been clear about their aims, for example on hub and spoke dispensing and the community pharmacy access scheme. We will continue our work seeking the best possible outcome for contractors and will continue working with our colleague organisations to try to find new ways to convince policy makers at both a national and local level of the value of our current services, and the opportunities for the NHS to make better use of community pharmacy."
Category M price reduction
The Department of Health (DH) has announced reductions to Category M prices which will apply to prescriptions between June and September 2016, after which they will be reviewed.
The changes represent a reduction to generic medicine reimbursement prices (Category M) for June to September 2016 worth £12m per month, equivalent to £48m for the four-month period.
The reductions are being made by DH in response to the preliminary findings of the 2015/16 medicines margin survey. Their intention is to reclaim excess margin that they believe was delivered to contractors in 2015/16 above the agreed allowed £800m.
PSNC accepts that margin levels were high during the period, but has not agreed to the reduction.
DH stated in a letter to PSNC that they felt the data was robust enough to support at least a £12m per month reduction. DH said they would reconsider the position for October onwards in consultation with PSNC, once finalised 2015/16 medicine margin survey results are available. DH projections suggest that the October Drug Tariff is unlikely to see a significant recovery.
The Drug Tariff will be amended to reflect the new prices and the June 2016 prices will be available shortly on the NHS Prescription Services website.